Local Housing Allowance and Homelessness

Debate between Virendra Sharma and Richard Burden

Wednesday 24th July 2019 Westminster Hall

[Mr Virendra Sharma (Ealing, Southall) (Lab)]

I beg to move,

That this House has considered local housing allowance and homelessness.

It is a pleasure to speak under your chairmanship, Mr Bailey. I am raising this issue because our constituents are in pain. A series of cuts, including the freeze in local housing allowance rates since 2016, has led to an increasing number of people across the country struggling to keep a roof over their heads. In the worst cases that is leading to homelessness and rough sleeping. The last 10 years of Tory rule have given us rising levels of homelessness in England. Rough sleeping alone has more than doubled in that time and in London in the last year it increased by 18%. The number of people in temporary accommodation has also increased. At the end of last year there were 83,700 individuals and families living in temporary accommodation, which is a 74% increase since 2010. It is unacceptable and we cannot allow it to continue. We must reverse it. We must look at the availability and affordability of housing.

Local housing allowance rates relate to housing benefit, which is now part of universal credit. They were introduced just over 10 years ago and are meant to give support to people on low income who are renting privately, including people who are working, so that they can keep up with paying their rent. However, in the last 10 years rates have been cut repeatedly and are now frozen, leaving people who need the support struggling to pay their rent. Research by Crisis and the Chartered Institute of Housing found that in 92% of areas in Great Britain, fewer than one in five homes were affordable within local housing allowance rates last year for single people, couples or small families. The cut has an impact on a huge number of people in most parts of the country, even when they are working.

[Richard Burden (Birmingham, Northfield) (Lab)]

I congratulate my hon. Friend on securing this important debate. Does he agree that Shelter’s figures provide an even starker illustration than the picture he paints? They show that 31% of renters in receipt of housing benefit had to cut back on food for themselves or their partner, and two in five, or 37%, were forced to borrow money just to pay their rent in the last year. That indicates the scale of the problem. Does he agree that it proves that what is needed is not only the unfreezing of local housing allowance rates next year but their restoration to a realistic value?

[Mr Sharma]

I quite agree with my hon. Friend and am sure the Minister will take note. It is not a political argument. All the charitable and voluntary organisations express the same concerns, and we need to do something about it.

Too many people are at risk of homelessness as they struggle, month after month, to make up the shortfall between their rent and the support they get from local housing allowance. There is a huge problem in my constituency; it is staggering. From 2011, local housing allowance rates were meant to cover the most affordable third of local rents, but in my constituency, for single young people, just 1% of shared properties were affordable within the shared accommodation rate last year. For a family with one or two children, just 6% of two-bedroom properties were affordable. To give an idea of how far behind rents the rates now are, that family would have had to find more than £150 extra a month to rent a property in the cheapest third of the private rental market. That is not an amount that can be made up from better budgeting. It is two and a half weeks’ worth of food shopping for the average family in London. No wonder that in too many cases it is almost impossible for people to cover the cost of their rent when they face such shortfalls. The ending of a private tenancy is one of the most common reasons why people become homeless today. What is more, when people lose their tenancy, it is equally impossible for them to find somewhere else to live within local housing allowance rates. They are left facing homelessness.

That is not the experience of a few people. Charities deal with people in that situation far too often. One woman I heard from is long-term sick and unable to work. She has to move out of her home because the landlord is selling the property, but as her local housing allowance rate is only £350 a month she cannot find anywhere else to live and is at risk of becoming homeless. That is having a huge impact on her severe anxiety. I heard from another woman, who has worked almost continuously since she was 16. She is now in her 50s. Four years ago she was made redundant, and she has struggled to get another job since. She is now struggling to find ways to manage a £300 monthly shortfall between her housing benefit and her rent. After years of work, the housing benefit system is failing her when she needs it most. She needs security and to get back on her feet. Another person who faces a huge shortfall between rent and housing benefit after having to stop work last year said, “It just feels like you are being kicked when you are at your lowest.”

Visitors to Ealing soup kitchen have the same stories. Gert was failed by LHA when he was made homeless because he got a tiny increment in wages and his housing benefit help stopped, which effectively made him homeless for over a year while he was still trying to work. LHA also failed a volunteer at Ealing Soup Kitchen, Simone, who has been asked to leave a property and is unable even to bid for band D properties despite having a disabled child and working full time. On her low wage she cannot pay for high-rent properties, and there is a good chance that she will be made homeless by the system in September. She works in a care home and spends her spare time volunteering at homeless shelters—and she may end up having to use them.

Andrew Mcleay, the manager of Ealing Soup Kitchen, says:

“We try to help these people that slip through the cracks—however LHA is making our job almost impossible”.

Ealing Soup Kitchen and other organisations in my constituency do amazing work, and help people move from homeless to hopeful. They save lives. I am confident that the Members attending this debate, and every Member of Parliament, will have groups doing equally important work in their constituencies, but I particularly want to thank St Mungo’s, Hope for Southall Street Homeless and Ealing Soup Kitchen for their amazing work. No-one should be in that desperate situation, and no one should become homeless or be at risk of it simply because the help they need is not there.

For years, social housing has been ignored and sold off, driving rising rents and falling housing stocks. Social rented housing is key for providing people on low incomes with secure, decent and affordable housing. But the Government are woefully behind in building enough homes to address the scale of need. Just 5,000 social rent units were built last year. Research from Crisis and the National Housing Federation has shown that we need to build 90,000 homes a year in England for the next 15 years to significantly reduce the worst forms of homelessness, such as rough sleeping and living in unsuitable temporary accommodation.

It will take time to build the social rent homes that are needed. That is why we must act now to ensure that people on low incomes can afford their rent in the private rented sector. We simply cannot afford to wait for more than a decade and, in the meantime, watch the numbers of people facing homelessness rise and rise. Right now, more and more people on low incomes are having to turn to the private rented sector to find homes, only to struggle to pay their rent because of cuts to local housing allowance rates. In reality, we need to fund both. We need to invest in increasing the supply of genuinely affordable housing, as the most effective long-term solution and the best way to manage the housing benefit budget, but that must not overshadow the urgent need to invest in an immediate and effective solution to help people to keep their existing home and avoid altogether the trauma of becoming homeless.

Unfreezing the rates and ensuring that they cover at least the cheapest third of local rents will significantly help people at risk of homelessness in the private rented sector. That will also help to reduce the number of individuals and families experiencing homelessness now. It will help those stuck in temporary accommodation or hostels, living on the streets, hidden away on people’s sofas or sleeping at the back of buses to find a home and have the immediate means to keep it.

As I mentioned, we have seen a huge rise in the use of very expensive temporary accommodation. That is a result of fewer and fewer affordable housing options for councils to prevent and resolve homelessness, as per their statutory duty. That not only sustains people in insecure situations, but is a huge waste of taxpayers’ money. As a country, we are spending almost £1 billion on temporary accommodation, rather than helping people to move into safe, stable and affordable homes. That money could be better spent on services to prevent homelessness from happening in the first place and save both the economic and the human costs of homelessness.

That is why I, along with many of my constituents, are supporting the Cover the Cost campaign launched by Crisis. That campaign has the support of thousands of people, several leading organisations in the area of housing and homelessness, councils and landlords. Those organisations include the Local Government Association and the Residential Landlords Association. The campaign calls on the Government to restore local housing allowance rates so that they cover at least the cheapest third of rents.

We are due a spending review, and I am sure the new Prime Minister will at least deliver that. It is a prime opportunity to unfreeze local housing allowance and put sufficient investment into the rates so that they cover at least the cheapest third of rents. That will give an immediate and much-needed lifeline to so many people who right now cannot cover the cost of their rent and so are at severe risk of homelessness. The investment will also have an immediate impact on homelessness, helping people back into the housing market rapidly, and will make a significant difference to many of my constituents and many people across the country. If the Government are serious about ending rough sleeping, as their manifesto says, then we need an immediate investment in local housing allowance rates so that the system is adequately resourced to support people as intended.