New government housing policy: make people homeless


5:05 pm - June 23rd 2010

by Don Paskini    


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In yesterday’s Budget, the Tory/Lib Dem government set out their key housing policies over the next four years:

1. Increase homelessness.
2. Reduce the number of homes available for rent by people who are unemployed or in low paid work.
3. Ensure that people on low incomes are evicted from more affluent areas and herded into ghettos.
4. Increase overcrowding, and therefore increase ill health and reduce educational attainment.
5. Increase personal debt amongst people in housing need.
6. Take £15 per week away from people who have managed to find low cost housing.

Now I have scrutinised the manifestos of the Tory and Lib Dem parties, and I can find no evidence that they told people before the elections that they were planning to make more people homeless.

And the amount of money that they saved by doing this is less than the amount that they chose to cut taxes by, so these were not policies forced on them, but ones that they deliberately chose.

Here’s how they plan to do it:

In the 2010 emergency budget, the government announced a package of reforms aimed at saving £1.8bn in housing and council tax benefit costs.

1) Local Housing Allowance measures. These affect private sector tenants:

From April 2011:

• Local Housing Allowance levels will be restricted to the 4 bedroom rate;
• A new upper limit will be introduced for each property size, with upper limits set at:
  o £250 a week for a 1 bedroom property
  o £290 a week for a 2 bedroom property
  o £340 a week for a 3 bedroom property
  o £400 a week for a 4 bedroom property or larger.

• As previously announced, the £15 weekly excess provision currently payable within the Local Housing Allowance rules will be removed.

• The size criteria will be adjusted to provide for an additional bedroom for a non-resident carer where a disabled customer has an established need for overnight care.

From October 2011:

The Local Housing Allowance will be set at the 30th percentile of rents in each Broad Rental Market Area, rather than the median. The measure announced by the previous Government for the removal of the top 1% of rents in the market evidence for each bedroom size in the calculation of Local Housing Allowance rates will not now go ahead.

2) Non-Dependant Deductions – affects both Housing and Council Tax Benefit

• There will be staged increases in the rates of non-dependant deductions in the income-related benefits from April 2011. By April 2014, these increases will bring the rates to the level they would have been had they been fully uprated since 2001 to reflect growth in rents and council tax.

3) Longer term reform

The Government also the following measures affecting Housing Benefit , which will require primary legislation, so are scheduled for introduction from April 2013:

Local Housing Allowance:

• From 2013/14 onwards, Local Housing Allowance rates will be uprated on the basis of the Consumer Prices Index, rather than on the basis of local rents.

Social rented sector:

• From April 2013, Housing Benefit for working age social rented sector customers will be restricted for those who are occupying a larger property than their household size and structure would warrant.
Time limiting:

• Housing Benefit customers who are claiming Jobseeker’s Allowance will only receive their full Housing Benefit award for a period of 12 months. After that period, their benefit will be reduced by 10%, and they will continue to be ineligible for the full out of work Housing Benefit rate until they have left the benefit system and been in work for a period.

The politicians who introduced these policies know exactly what they are doing, and are cynically hoping that imaginary stories about people getting £100,000+ housing benefit, and lack of knowledge on the part of journalists about the consequences of changes to the benefits system, will mean that they get away with these stealth cuts.

Whatever you may think about the Budget overall, or which party you support, I hope you’d agree that those of us on the liberal-left should do all we can to get the government to reconsider and abandon their pro-homelessness policies.

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About the author
Don Paskini is deputy-editor of LC. He also blogs at donpaskini. He is on twitter as @donpaskini
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Story Filed Under: Blog ,Conservative Party ,Economy ,Equality ,Libdems

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Reader comments


what I’d really like to see is figures on how many households claim housing benefit above the claimed thresholds. I’m assuming it must be > 0, since otherwise how would it save any money? Is the claim simply rejected, or capped at the maximum rate instead?

I am sorry but this is so silly. NO govt. wants to make people homeless.

Let me tell you how things work in real life – landlords who charge higher rents will have to adjust them downwards because of this. They have been milking the system for all it is worth and the only thing Labour achieved was to make rents more expensive.

It’s one of the worst parts of the budget, worse than the VAT increase, for sure. The stupid thing is that as part of a wider range of policies this housing benefit change wouldn’t be so bad. If it was linked to investment into local council owned housing stock, given to those with housing needs at an affordable rent that is ultimately below market value for the area, then it would be fine.

I’m generally not against the idea of lowering the housing benefit limits, I don’t think that it should be a given that you get to live in expensive housing simply because that’s where you happen to be. But until you control the market in a way that you don’t force ghettoisation of the poor and out of work, it is the wrong half of a policy.

Of course so far any hint of real housing policy has yet to materialise…bad times.

Agreed with Lee @3. If these proposals were tied into a properly decent programme for social housing and rent control etc then it wouldn’t be half as bad, as it stands it looks plain malicious.

Vishal,

Your prediction that “landlords who charge higher rents will have to adjust them downwards because of this” is not one which is shared by the Local Government Association or landlords.

The Tory government in the 1980s made tens of thousands of people homeless, and viewed it as a “price worth paying”. So you tell me, why is the government planning to cut housing benefit for nearly one million long term unemployed people?

Lee – agree with that. There are any number of ways of reforming the housing benefit system to improve it, but this really isn’t one of them.

“landlords who charge higher rents will have to adjust them downwards because of this. They have been milking the system for all it is worth and the only thing Labour achieved was to make rents more expensive.”

Oh god…

If you think that landlords are charging £1000 p/m rents for 4 bed properties in London because they are “milking the system” then you are greatly misled.

I agree, an increase in homeless people and families is inevitable. There was also a change to the rates of mortgage interest that can be claimed which obviously will lower the amount available or what would be the point of the change? Those on higher rates of mortgage are people like my brother who is self-employed or my friends who weren’t able to save for a substantial deposit. This is also going to have a significant effect when unemployment rises, as it will.

That should read £2000 p/m, sorry

A quick search on Primelocation returned over 1000 4-bed properties to rent at £400 per week or less with almost 10,000 2-beds at £300 or less

@cjcjc did Primelocation say how many of those properties could be rented by someone who is on housing benefit?

Here’s a clue: the answer will be “not many”.

And compare and contrast, that’s “almost 10,000 2 bed properties” for the 772,000 and rising people out of work for more than 12 months.

Further to my comment at 8, my brother and friends are all managing to hold onto work for the moment – but it could happen to any of us at any time. Sickness, redundancy etc.

What this shows is the idiocy of selling off council houses at a third of their value 30 years ago. Assets on the cheep. That policy has now come back to cost the country huge amounts of housing benefit as people are housed in private rental or bed and Breakfast. Another Thatcher short term policy that has been a disaster for the country.

sally – the selling off of council housing stock wasn’t necessarily a bad thing per se (except for those who couldn’t keep up the mortgage and lost their home absolutely), the bad thing is there was no programme to replace social housing.

And we mustn’t forget that these changes are alongside the removal of the requirement for low-cost/affordable housing in residential building planning applications.

17. Charlieman

@15 earwicga: “the selling off of council housing stock wasn’t necessarily a bad thing per se…”

I think that you need to qualify that statement a bit.

1. Sale of council homes was a dogmatic choice, part 1. The Conservative government wished to reduce the number of council tenants. Discount sales to existing tenants reduced the number of council tenants, and thus made the world more perfect.

2. Sale of council homes was a dogmatic choice, part 2. Existing tenants were given a discounted price to reflect their investment from a long term rent. They were not able to transfer that equity until they purchased the home in which they lived and sold it to somebody else. A non-dogmatic scheme would have offered tenants £x,000 in a home purchase trust to buy a home of their choice.

3. Sale of council homes was a dogmatic choice, part 3. Councils were not permitted to reinvest income from sales in new building. I recall that reinvestment was capped at 5% a one stage.

4. Sale of council homes was a political choice to break class based voting patterns. I don’t desire class voting, nor do I support clumsy social engineering that seeks to break it.

5. Sale of council homes demonstrated the disparity between attractive ones and “ghettos”. As the number of homes in attractive areas decreased, the optimism of those at the bottom fell. It is one thing to live in a grotty home hoping that you’ll be living somewhere better in five years, and another knowing that it will never happen.

6. The fact that we are so conscious of the council home sales policy 30 years ago demonstrates its vicious effects and the ineffectiveness of subsequent government policy.

As a liberal, I was encouraged by the past requirement for new developments to comprise mixed private/affordable/for-rent housing. The coalition government’s credibility will be tested on what they can supply that works in the same way.

Don, I normally really like your stuff, but I am not sure what your point on the housing benefits threshold is. £200 per week for a one bedroom property is a large amount of money (equating to roughly £10,400 tax free), and even in London, most people would be happy to settle for such a property. Housing benefits are excessive, and it is the one area of the benefits system I would really trim (JSA, ESA, IB/IS and DLA aren’t excessive for the most part). Ideally I would like to see all claimants housed in student-type accommodation, with shared kitchens and bathrooms.

19. Shatterface

‘Ideally I would like to see all claimants housed in student-type accommodation, with shared kitchens and bathrooms.’

I’d like to see MP’s housed in student-type accommodation, with shared kitchens and bathrooms, instead of flipping them and making a fortune.

Most JSA claimants are ‘between jobs’ even if it can take months to find the next one. You want to shift them into shared housing so they have to get back on the bottom of the housing list when they start work again?

Shatterface:

I’d like to see MP’s housed in student-type accommodation, with shared kitchens and bathrooms, instead of flipping them and making a fortune.

Agreed.

Most JSA claimants are ‘between jobs’ even if it can take months to find the next one. You want to shift them into shared housing so they have to get back on the bottom of the housing list when they start work again?

Good point. Make it just for long term ones then (anyone claiming housing benefit for over a year). Alternatively, people on it for more than a year could chose between the student accommodation and a flat rate fee of £120 per week. I exclude families from these proposals, as they are more difficult to house.

@20

Why not just put the long-term unemployed in camps? You could call them, ooh, I dunno, “labour camps” or something. Maybe have a snappy slogan like “Work sets you free” at the entrance to show the great unwashed a bit of inspiration.

Oh, and define “family”.

Mr S Pill:

Is it good for society that people don’t go into work (and I have met plenty), because they get massive amounts in housing and council tax benefits? Is it good for the individuals themselves? Is it good for the people who pay for them? Generations are now trapped in this welfare system, and when people (not me, but the government) try and do something about it they are attacked as heartless. I really do find these sort of attitudes seriously misguided, because they are usually espoused by people who aren’t in that situation.

That is all I am going to say on the matter. Good night.

23. sevillista

We have a massive problem in this country – welfare scroungers who have used this so-called “global recession” (a myth created by Gordon Clown to justify the inevitable results of his “investment” in wasteful public spending) as an opportunity to pretend there is no work.

The solution must be to abolish all benefits, and move the welfare state back onto its original philanthropic ‘big society’ footing rather than
the mistaken ‘big state’ Beveridge bounced the country into while it was shell-shocked in the aftermath of the 2nd World War.

Local communities would decide who was worthy (not many – maybe those unfortunate banking folk who have to deal with deferred bonuses and a 50% tax
rate due to Gordo’s public spending follies) and unworthy (the scroungers who are pretending to be disabled, old or unable to find work) of support. The unworthy should be forced into houses of work to ensure they put something back into society (cheap labour for business) as punishment for their immoral ways.

This will make Britain great again – we were the wealthiest country in the world last time these policies were enacted. And hopefully the parasites will die out once we deny them food and healthcare.

Why does society owe scroungers a roof over their head, food, health care or free education for their feral offspring?

@22

Oh YAWN. You don’t get “massive amounts in housing and council tax benefits” if you’re out of work. It’s defined by the council where you live. It’s not like a huge cash lump sum, you know. I’ve been in the past and am at present on the dole so take your holier than thou attitude and shove it. Of my unemployed friends I can only think of one who is “cheating” the system, by doing a bit of cash in hand work on the side fixing computers. Everyone else wants work, a decent job preferably but frankly any would do. Generations will continue to be trapped if there are no jobs and no training, and this current Gov has already scrapped some plans to increase both, so they’re not off to a glowing start.

@23

You made me lol with your satire. It was satire, wasn’t it..?

25. sevillista

@S Pill

Rumbled. I’m trying to learn to speak Tory to help me avoid the Passover that our new Gods are going to inflict on public servants.

@25

Heh, well you’re doing well. Throw in a couple of “ZaNu Liebour”s and “it’s political correctness gone health and safety” and you’re cushty.

27. Vicarious Phil

• The size criteria will be adjusted to provide for an additional bedroom for a non-resident carer where a disabled customer has an established need for overnight care

How is this measure going to make people homeless? It sounds to me like a good idea, it will popular with those who benefit. I work in Housing benefits and have often been asked whether we take into account the need to accommodate a carer, which we currently don’t. “established need for overnight care” the devil may be in the detail, but it’s promising.

As for the restriction to £400 per week, that’s a London measure, because only in London is that not above the current LHA.

Limiting to 4 rooms is an issue, but in many areas I suspect rents will follow the LHA. If you’re a landlord willing to let to “DSS” tenants as they’re still called round my way, then if you charge more you won’t get the tenants, or you’ll end up in court pursuing arrears.

The juries out on these reforms. What happens next is important when the next planned reforms take shape.

£1600 pcm? So I give up my job and become a benefit scrounger and I can upgrade to this – http://www.rightmove.co.uk/property-to-rent/property-30046409.html

Housing benefit should be a safety net, not a leg up so you can live in a better house than the poor sods footing the bill.

“£1600 pcm? So I give up my job and become a benefit scrounger and I can upgrade to this – http://www.rightmove.co.uk/property-to-rent/property-30046409.html

No. You don’t get to “upgrade” if you lose your job. As should have been obvious if you had thought about it for nearly 1 second before you starting typing.

@27 – the carers’ change is a good one.

I don’t share your optimism that landlords will just accept less money for LHA, I think the net outcome will be fewer properties available for rent.

One other change is cutting LHA to be the 30th percentile of rents in each Broad Rental Market Area, rather than the median. This will definitely reduce the supply and quality of housing.

@29

1. Since when has Nottingham been in London?
2. I think you’ll find that property comes with a big “NO DSS” attached.

Hang about.

Channel 4 news ran a piece last night about a woman in Islington. She lives in a four bedroomed townhouse and is currently in receipt of slightly more than £30,000 pa to pay her rent (despite this, she is still ‘behind with her rent’ – this did not stop her having the [cliched, but true] literally enormous flat widescreen TV, and using pre-sliced emmental to make sandwiches. Pre-sliced emmental is not a necessity – paying your rent is).

In order to have £30,000 pa to send on rent, I would need a salary of £50,000 pa. This is just to pay the rent: it would leave me nothing for food, clothing or bills, never mind TVs.

Even if her payments are capped at £400 a week, she will still receive £20,800 pas (after tax, effectively). To have this much to spend on rent, I’d need to earn around £30,000 pa (and still have nothing left for food etc).

Let’s say you need, at minimum, £1,000 a month to keep body and soul together. This means she is living a £70,000 a year lifestyle on the backs of taxpayers.

Is this what the founders of the Welfare State wanted?

The woman has five children; what is the father doing to support them? Nothing.

Meanwhile, my brother lives in a two bed flat in Briston which he shares with two other people, working his backside off, constantly in debt and dreaming of living in a four bed townhouse in Islington.

Please excuse me if my heart doesn’t bleed for people who might have to move to a slightly cheaper area.

Shatterface,

Better yet would be to house MPs in social rented homes. Obviously, with the introduction of CBL, one couldn’t simply allocate them a home on a sink estate to see how they coped but, keep their level of priority modest and see what they’d be prepared to accept – either in London or in their constituency.

This might sound outrageous – there is, after all a shortage of social housing in the country – why should it be allocated to MPs? But consider this. The old accommodation allowance was in the order of £20,000pa. Over the five year life of a parliament, that amounts to £100,000. In most parts of the country, that far exceeds the grant rate for the provision of a new social rented home. Even in London, the grant rate is about £125,000 per property. So, if the MPs allowance was abolished and diverted to new affordable housing, social housing breaks even after one parliament and thereafter, the money delivers an additional 600 affordable homes/parliament.

Plus, I think we can agree that if all MPs spent at least part of their time living in social rented homes, we’d see housing rise up the agenda pretty swiftly.

Whereas, if you made them live together in student accommodation they’d spend even more of their time talking to each other and forming their opinions in the Westminster echo chamber. Plus, imagine how much they’d spend on security for a building where lots of MPs all live together.

34. Luis Enrique

it’s certainly true that when people talk about the “marginal tax” of having your benefits withdrawn when you get a job, that housing benefit in London can be extraordinarily valuable – to the point where getting a job would be crazy. As Dan @32 says, a lot of people work very hard in London to earn enough to spend £10,000 or whatever per year on rent for a small flat, and I don’t think there’s much wrong with being uncomfortable with some people being paid a lot more than that by taxpayers to live in better accommodation than that, without working (it’s not that rare – an unemployed friend of mine has a lovely place in Notting Hill, on benefits). At the same time, as the OP says, just crudely cutting HB in a fashion that will impact not just those being paid to live in generous accommodation, but badly off people living in poor accommodation, is savage.

The woman has five children; what is the father doing to support them? Nothing.

I’ll bet you a pound to a penny there’s more than one dad involved.
Or, rather, not involved.

Returning to the point at issue. HB is a mess for two reasons – it is massively expensive and it is, in some cases, deeply unfair. The two problems are intertwined.

The previous government did very little to reform HB’s unfairness because it would be painful. Now there is little choice but to reform it because of the cost. If we don’t we have to give up other things in order to continue funding it. But, given that the expense and unfairness are linked, isn’t it easier to say how much money you want to cut and then figure out how to soften the blow for those worst affected?

Bear in mind also that housing benefit payments sustain the rental market at a level above where it would be without that money going it. If changes to the HB regime reduce rents across the board then the effect of reform is massively positive – it reduces housing costs as well as welfare costs.

@36 – the Chartered Institute of Housing have some good and detailed ideas for housing benefit reform:

http://www.cih.org/policy/HousingBenefit-Resp-Feb10.pdf

Here’s their response to the Budget:

http://www.24dash.com/news/housing/2010-06-23-CIH-Housing-benefit-reforms-create-risks-for-most-vulerable

Can I ask if anyone pontificating on this thread is in receipt of Housing Benefit?

You will be unamazed that I have a problem with the principle of the whole thing as it seems to me to send all the wrong messages. Housing Benefit is predicated on the assumption that it is the responsibility of the state to ensure that all its citizens have an adequate roof over their heads. Would it not be a much more progressive message to transmit that it is the responsibility of each individual to provide adequate housing for themselves and their children?

I also have a problem with the implemetation of the policy in that it leads to a hugely expensive beaurocracy following arcane and arbitrary rules to means test applicants and encourages snoopers to identify abusers. It is demeaning to all concerned. Furthermore the overall effect is to fatally distort the private rented housing sector giving landlords excess profits and to fuel resentment in the allocation policies in the rationed Local Authority sector.

It would provide much greater value for money if we were simply to provide all of our citizens with the entitlement to a basic income sufficient to ensure their basic needs including housing. Along with the money, we would be returning to them the dignity of being responsible for the choices they make in providing for themselves.

39. Luis Enrique

pagar,

there is no way a citizen’s basic income is ever going to cover housing costs, especially in London. also, nice use of the world progressive – illustrating Paul S’s point.

“It would provide much greater value for money if we were simply to provide all of our citizens with the entitlement to a basic income sufficient to ensure their basic needs including housing.”

It would also be mind-bogglingly expensive, but tell me more about your plans to create value for money by tripling the welfare budget.

41. Sevillista

@pagar

A ‘minimum income’ is all well and good (and I agree the incentives will mean a more efficient use of housing), but there are problems from left and right.

For the left, mixed communities are an important goal. Cutting HB into a national minimum income will result in no-go areas for the poor (some LAs eg Camden, Kensington and Chelsea etc have no affordable private rented housing). But maybe we should make it impossible for the poor to live in these areas, and force them up North into areas of concentrated unemployment? I appreciate this is probably part of the gerrymandering point of cutting HB, but it’s not clearly desirable. It may also be inflationary as labour supply will be constrained for less skilled retail and administrative roles currently subsidised by allowing people to live in high-cost locations beyond their means.

For the right, what if the feckless poor use money society gives for housing on other things like fags and booze? Surely a social conservative would see theneed to guide the choices of the immoral and feral poor?

“For the right, what if the feckless poor use money society gives for housing on other things like fags and booze? Surely a social conservative would see theneed to guide the choices of the immoral and feral poor?”

Well, a social conservative might, but most people on the right tend to see them as akin to social democrats in that they believe in meddling and nagging…

Mind you, if the feckless poor are using housing benefit to buy other things, we should be asking how? Last time I checked, it was paid direct to landlords wasn’t it?

43. Sevillista

@watchman

Pagar’s idea was a nationally-set cash minimum-income benefit to replace HB which – I guess – would not go to landlords.

I don’t deny driving the poor out of Inner London and other high-cost areas while cutting the generosity of welfare benefits significantly is a desirable Conservative goal, for anti-welfare and gerrymandering reasons and will outweigh the concerns of social conservatives.

I can’t see how driving the unemployed anywhere is gerrymandering, unless you actually believe the unemployed vote Labour, and Labour represents them best?

Hardly the idea behind Labour (wasn’t it the party of the working man, with the clue being in the name), and hardly an electorally-viable position outside of one or two areas.

45. Praguetory

Is this a Labour politician lamenting the housing crisis? Perhaps he should take a look at the number of new dwellings that were built under Labour compared to the increase in population or consider the what happened to price earnings ratios between 1997 and 2010. His hypothesis that removing unnecessary redtape will hold back the housing sector is lamentable.

46. Sevillista

@watchman

Housing Benefit is an in-work benefit too, and is also claimed by many elderly, disabled and vulnerable people.

Why is driving the working poor (or the unemployed) away from employment opportunities beneficial to their work status? You’ll have to explain it to me – I really cannot see it.

Poor people tend to support Labour – as Tories want to engage in class warfare against them through vindicative policies that – say – pin the blame for the recession on the working poor and disabled. To drive them out of a particular area is clearly gerrymandering.

Maybe gerrymandering and the enhanced social segregation this piece of Tory social engineering will create is no bad thing in your book?

Dan – when you watched that report on C4 last night, did you ask yourself why they had chosen to highlight a lone parent with five children? Hardly representative is it? R4’s PM chose another unrepresentative lone parent to report on as well. MSM helping to foster the climate of hate towards lone parents, how unsurprising!

One thing that I’ve not heard anyone mention yet is the impact this will have on supported housing projects. I work for one in the north east: we house young homeless women, and offer support to help them sort their lives out and hopefully get into jobs or education. We’re staffed 24 hours a day, and most of our funding is through housing benefit. But if housing benefit is capped, I imagine that that means most of our funding will disappear. I’m not sure of the technicalities, but am I right in thinking that that’s the case, and that this move will threaten almost all of the supported housing projects currently in existence?

@Sevillista

Speaking as the descendent of working-class east enders who always voted Conservative, I’m always less certain of the assumption that the working class votes Labour (how did they lose in say 1950 if that was the case? The middle and upper classes were not that big and seats were pretty fairly distributed). So my problem with your gerrymandering argument is that it makes assumptions about people automatically voting because of their status – it assumes people vote in certain ways not because of their beliefs or thoughts, but because of their ability to fit in a particular mental box we create.

And I never claimed driving the unemployed away from work was beneficial; but I am not sure where that comes from anyway?

Incidentally – don’t you think it is wrong that the goverment should pay for a bunch of often slightly dodgy people to own large amount of what should be cheap to purchase property, rent it out at a high rate and therefore drive up both property and rental costs?

All that sounds fine – if only it were coupled building more affordable housing. It seems sensible to cap the amount the taxpayer is willing to pay in rent – and the levels don’t seem particularly stingy to me. The one bedroom house cap is more than I currently pay for a flat in London zone 2, and I have a pretty well paid job.

As a Lib Dem supporter, the compromises on housing are probably the aspect of the coalition I am least happy with. But cutting housing benefit isn’t the real problem. The solution to a shortage of affordable houses ought to be to build more affordable houses, and it’s a real shame that both Labour and the Tories policies have been geared towards keeping house prices high rather than dealing with the housing shortage.

51. Sevillista

@watchman

You are correct that the working-class often do not vote for their class interests (in 2005, for example, 25% of those in the two lowest socio-economic groups voted Tory).

But the trend is clearly there (as is entirely rational) – 48% of this group voted Labour in 2005. So getting rid of those in socio-economic groups D and E and replacing them with middle-class people will boost the vote of the Tories and lead Labour’s vote to dwindle. Useful for, say, forcing Labour’s Karen Buck from her seat in 2015. Maybe I am misunderstanding the term “gerrymander”?

Re employment – proximity to employment opportunities clearly has a positive impact on rents. Hence Westminster’s high rents and Kingston-Upon-Hull’s low rents. Therefore, forcing people away from high housing cost areas reduces access to jobs – and is likely to increase worklessness as a result

Hi Marika,

Exact details not certain, but, yes, these reforms are likely to cut the funding available for supported housing – whether they are paid through rent money or supporting people funding (which is also being cut).

For me the big issue is the sudden introduction of these decreases – in particular in Inner London (out to about Zone 4, I think) where the amount of money available to benefit claimants to pay their rent will decrease very suddenly and by a very large amount (since they will, uniquely, be affected by the cap).

Will landlords decrease their rents in response, overnight? I don’t see why they should, certainly in places like London where there will be plenty of other takers at a higher price than the new benefit.

I think the more likely scenario is an unprecedented wave of evictions, causing the low end rental market to be temporarily massively overloaded. While there may be some properties available within Zone 1-4 at the new benefit level, the fact is it’s going to be a small minority of the market, and at this point benefit claimants may even be a majority of those looking for housing.

This will cause a huge level of temporary homelessness. The result will be people moving into very overcrowded accommodation, and also very rapid migration of benefit claimants into the outer suburbs – the impact on places like Croydon, Luton, Slough, Barking could be explosive.

More worryingly in the long term, the coalition seem to have no coherent strategy for either providing more housing (of any sort, let alone social housing) or stemming the increase in population. Inevitably that means crowding more people into the existing stock; and that certainly won’t be done by reducing the number of second homes.

Dan (32):

I see your point, and don’t deny that the system needs reforming to some extent: but if you hit people with a big decrease and a cap all at once, affecting everyone on housing benefit in several London Boroughs, you are going to render tens of thouands of households – many of them with children – simultaneously unable to pay their existing rent. That is a very unwise thing to do. You can’t just reorder a major city overnight so everyone unemployed lives in a few ghettos on the outskirts, even if you think that’s sensible to do in the long run. We are talking about a very large number of people.

It’s also grossly unfair (on the part of Channel 4) to cariacature everyone in this situation as a single mother with five kids who’s never worked and doesn’t care, who’s living in a lovely photogenic “townhouse”. I know from my job that most on HB don’t get anything nearly so nice. I suppose it’s an image people like to carry in their heads to imagine it’s only undeserving “chavs” living it up off their taxes being hit by this.

But everyone knows a lot of hard-working people have lost their jobs lately, and that for many people with skills that have taken a lifetime to obtain, no jobs at all are being advertised.

there is no way a citizen’s basic income is ever going to cover housing costs

That depends on the level you set it at.

At the moment, we pay 7.4 million people an average of £84 per week each in housing benefit plus a huge bill for the DWP to administer the system. Their latest IT system is forecast to cost more than £1.3 billion. I estimate that we could afford to set CBI (to replace all current benefits) at a figure of around £175 per week, maybe £200 in London.

Any takers?

Remember the cost is not CBI x 60 million citizens because you recover the CBI from those with sufficient income not to need it by progressive rates of taxation of income. (I got the word in again Luis).

Remember also that rents will reduce considerably when there is a true rental market.

Cutting HB into a national minimum income will result in no-go areas for the poor (some LAs eg Camden, Kensington and Chelsea etc have no affordable private rented housing).

There will always be a divergence between what people want and what they can afford. That is what generates aspiration, something Housing Benefit tends to stifle.

what if the feckless poor use money society gives for housing on other things like fags and booze?

Are we really saying that we can insulate everyone from the consequences of their actions, however stupid? Or that it is correct to dictate to others how they should live their lives?

If someone chooses to live in a cave and spend their £175 on Stella Artois they would be entitled to do so without having to listen to the moralisers. And they could visit their lover as often as they chose to.

Great eh?

56. Sevillista

@pagar

Re minimum benefit level – possible but rather unlikely – are you proposing a minimum benefit level set at a locally-varying level lo allowing people to live in every local authority area, or a national level that forces either moves to low-cost regions, chronic overcrowding or homelessness?

Re desirabilty of forcing poor out of high-cost locations – good to confirm that enhanced segregation of rich and poor, and ghettoising the poor away from labour market opportunities is an explicit objective in the name of ‘improving aspiration’. Why did the Tories not state this goal in their manifesto?

I agree on the latter point – many may not (but could be a useful first step on generating support for reducing the generosity of this benefit)

Jungle,

Most people whose rent is paid by HB do not, it is true live in a big house in Islington. However, most people on HB are get far less than the new caps. Since the point of this reform is to stop the relatively small number of very large claims, it seems fairly reasonable that both C4 and PM should focus on someone whose claim was one of the big ones that was going to get cut.

It would have been pretty stupid for those programmes to have gone round to a typical HB recipient’s home because their claim would be below the new cap because the answer to the question, how will this family be affected would be “not much”.

Now, they might, of course, have found a family in low paid work living in a home only just above the cap and asked them how it would affect them. The answer there would be “horribly, if the landlord won’t accept a lower rent, we’ll have to move further from our work to find somewhere cheaper or find a way to make it up from our wages – and all over a relatively trivial sum of money” but this family is, of course, no more representative of the typical HB claimant than the families they actually visited. To focus on the hardest possible case would be tantamount to campaigning against the policy and that is not allowed for either C4 or the Beeb.

Will A @50 As to why we don’t simply build more affordable homes – the simple answer is because although social rents have risen over time, they have fallen dramatically relative to both incomes and construction costs. In the days when we built lots of council houses, the rent would cover the cost of construction. Now, the rent covers about two thirds of the cost of construction. That means they have to be built on land which is worth less than nothing. In practice, no such land exists and so each new social rented home has to be subsidised by between £50,000-£125,000 of public money. You can get a subsidy off the developers of market housing of course but, even then, social rented housing is very very expensive to deliver in the quantities we need.

@ 47 earwigca

Actually, C4 were being sympathetic to the single mum, not ‘helping to foster the climate of hate towards lone parents’. At one point, the reporter described the (literally huge, I mean it must have been six feet across) TV as ‘a luxury that might now look a bit much’ (or words to that effect); at no point did she (the reporter) suggest that, actually, the outstanding rent might have been paid before a TV like that be bought in the first place.

Speaking personally, I have no ‘climate of hate’ towards single mothers bubbling in my veins; I do have a climate of irritation towards the father(s) that assist in their production and then piss off, leaving the rest of us to fit the bill, and I think more ought to be done (somehow) to make them pay. Transferrable benefits would be my preferred option.

In economic terms, it’s trivial to say but if you provide someone with £30,000 (or even £20,000) of free money for housing, it will push up the local price of housing and remove any incentive whatsoever to work. On the national; scale, this is literally unsustainable; it’s not whether we would like to do this, but whether we can, and we can’t.

@ 54 jungle

As I say, C4 were not ‘caricaturing’ anyone – they were sympathetic to the woman.

I have to say, expecting taxpayers who cannot afford to live in Islington to worry too much about the fact that the payments given to non-working people – to fund houses in Islington that the taxpayers themselves could never afford – may now be reduced, and that the non-working benefit receipients may now have to move to live in the kinds of areas the taxpayers already live in, is a stretch too far.

We are NOT talking about people being made homeless; there are houses all over this country. People will have to move. Historically this is what they have done (the C4 woman was Jamaican – I say this only to point out that she has already moved a fair distance.)

59. Matt Munro

@ “10 A quick search on Primelocation returned over 1000 4-bed properties to rent at £400 per week or less with almost 10,000 2-beds at £300 or less”

Exactly – and yet there is apparently a housing shortage and we must cover every square foot of green belt with concrete to “solve” it.

The main point of this measure was to force welfare climants living in expensive areas to move to cheaper ones, which is exactly the same choice that 99% of the population has to make routinely, I can’t afford to live in Belgravia, so I don’t. Why should someone on housing benefits be able to choose where they live ?

60. Matt Munro

@ 58 “I do have a climate of irritation towards the father(s) that assist in their production and then piss off, leaving the rest of us to fit the bill, and I think more ought to be done (somehow) to make them pay. Transferrable benefits would be my preferred option”.

But how many of them actively chose to be fathers ? You can hardly blame them for “running away” from a responsibility they didn’t want in the first place.

@58

The big-TV thing is something of a canard played up by the right-wing redtops in my opinion, from my own experience most people with that type of luxury goods buy them via high-interest weekly-payment places like Brighthouse or the catalogue shops. So you can get a TV “6 ft” across for maybe £3 a week (for 250 weeks, of course…). Whether or not it’s good household budgeting is a different story, but then I’m more into musical equipment and haven’t owned a TV set for about 5 years 😉

@60

There is one very simple, cheap, and effective method of not creating a baby if you have sex. Piss and moan about dads being somehow not responsible because they didn’t want the child if you like, but if they don’t wear a condom they’ve no right to complain about the consquences.

Dan: “We are NOT talking about people being made homeless; there are houses all over this country. People will have to move.”

We certainly are talking about people being made homeless, in the short term. The cap will come in all at once, suddenly, certainly in Inner London reducing rents by more than landlords are willing to negotiate: a very large proportion of those paying more than the cap will be forced to move, all at once. It might not even be that simple: if they can’t stay in the Borough, they will probably have to reapply for LHA wherever they move to, which will take time they don’t have.

There might be sufficient low cost properties in the long run in outer London; but all in the same month? I shouldn’t think so.

As for raising Belgravia: I’m fairly sure there’s no-one on HB in Belgravia. Most HB renting funded by Westminster will be in the north, Maida Hill / Carlton Vale, some of the most overcrowded areas in London.

63. Cheesy Monkey

If you are reliant on council housing you don’t get a choice on where you live or what type of property you (may) receive – that is up to the council dependant upon your particular circumstances. I live in a council bedsit with my girlfriend. She was on the local housing list for 11 years before being allocated the property – there is not much in the way of council-provided homes here in Harlow and as such they are provided to those the most in need. Although our bedsit is in reality too small for us to live in, we make do because we know that we will never be upgraded because we’re both able-bodied and childless. If that situation were to change, we’d be more likely to be rehoused quicker.

With limited council housing stock, this is how it should be.

The woman in the town house with five kids would have been placed there by the council with Housing Benefit paying the rent because the council had no suitable properties of their own to house an adult with five children. The house probably came furnished — complete with large telly — because such rented accomodation usually does. Or the woman in question pays a few pounds a week via hire purchase. There isn’t really a problem with this, unless you happen to think that the poor are undeserving of any form of ‘luxury’ in their lives.

The Emergency Budget was a failure, and a mean-spirited one at that. The country desperately needs a job-creation scheme that produces decently waged employment. Instead, public sector jobs are likely to be slashed to distract from the private sector’s inability to create anything other than shit-paid temporary work. Get people into decently paid work, then they will be more likely to afford a home without Housing Benefit.

@ 60 Matt Munro

“But how many of them actively chose to be fathers ? You can hardly blame them for “running away” from a responsibility they didn’t want in the first place.”

You are taking the piss, right?

@ 62 Jungle

“We certainly are talking about people being made homeless, in the short term. The cap will come in all at once, suddenly, certainly in Inner London reducing rents by more than landlords are willing to negotiate: a very large proportion of those paying more than the cap will be forced to move, all at once. It might not even be that simple: if they can’t stay in the Borough, they will probably have to reapply for LHA wherever they move to, which will take time they don’t have.”

From my own memories of living in a rented flat, it’s not like you don’t pay the rent one day and are evicted the next; you get time. Eviction is a legal process, after all. It will not happen overnight.

And if the landlords know that the rents are being capped, they will (themselves) have two choices: drop their rents or get no rent at all. Personally, I’m not happy about my hard-earned tax going to pay for people who don’t work to live in houses I can’t afford to live in myself, OR for it to find itself into the pockets on rentier profiteers who live in houses I can’t even afford to dream of living in.

Once you look at the figures – under this system, people will still be able to receive £20,800 a year of free money – it is impossible for any normal person to get would up about this. All it is is a move towards some sort of sanity.

@ 61 Mr S Pill

“The big-TV thing is something of a canard played up by the right-wing redtops in my opinion”

Yep, I sort of agree with this (which is why in my original post I said it was a cliche). But then again, I work, and I cannot afford a telly like that – seriously. It’s about priorities. I have two kids to keep fed and clothed, a mortgage and bills to pay, and as a result I have a 30in TV from the steam age.

“There is one very simple, cheap, and effective method of not creating a baby if you have sex. Piss and moan about dads being somehow not responsible because they didn’t want the child if you like, but if they don’t wear a condom they’ve no right to complain about the consquences.”

Absolutely spot on.

I also saw the C4 programme and was absolutely flabbergasted, as i am with a general lack of common sense amongst these comments.

Professionally i am very aware that many local housing allowance claimants are not in such nice circumstances but the fact remains, no-one should be able to claim that much in lha. How can there be any complaints about her moving out of the area, out of London even – particularly since she has no job to keep her there…

If people lose their jobs they often have to downsize, move to a cheaper area – i have done it myself – and yet she is up in arms about being made “homeless”*

A few facts to chew on:

I live in London. Her rent is more than my salary.
I am paying, in tax, for her to live in a nicer house than my flat.
There are only two of us in our tiny little flat in a grimy-ish area, myself and my partner.
We don’t have kids. We don’t have kids because we can’t afford kids because we can’t afford to provide for them. Luckily, contraception is free (funded by the tax-payer but relatively inexpensively).

The father(s) of her kids may have done a runner. That is a shame and the CSA probably won’t be able to actually make him pay any support because they’re useless with no real muscle. Unfortunately that doesn’t preclude the lady in question from moving to a cheaper area.

* She won’t be homeless – she can move to one of the empty homes (there are a few) in areas outside London or the we can pay half as much for a similar house in a different city/town.

Of course, it would be easier if security of tenure, that untouchable left wing mantra was slightly less secure so that she could move into a 4 bed house. Some stats for those who maintain that the State owes a certain section of society utterly secure housing no matter what the personal circumstance (any idea why Rt Hon Frank Dobson MP, making over 60k p.a. still gets to live in a council house):

246,000 single person households in social homes with 3 or more rooms

400,000 two-person households in social homes with 3 or more rooms

8,000 families of 4 or more in 1 bedroom homes

It’s simple(s)

Of course, nothing in the above should take away a couple of political failures.

1) The most recent Labour Government allowing credit to spiral out of control pushing up house prices to unsustainable levels to keep the rich onside at the ballot box (that didn’t go so well)

2) They failed to build homes (of all types) – though some blame here could certainly be laid at developers’ doors. Tory nimbyism causes a lot of the pain in this regard.

Those who bang on about the Right-To-Buy are being needlessly silly. All of those house are now occupied. More than 50% are still occupied by the people who bought them (and that does not mean the rest are buy to let landlords).

Right-To-Buy receipts help build more social housing. The Labour Government put the discount down so that there are now no receipts and no churn in the social housing stock, no mixed communities.

Instead, the Government paid out loads of tax-payers’ money to build homes (over 100k a unit in London) and billions more in housing benefit and local housing allowance. It’s run out.

The money i have been paying for her to live in her lovely house in Islington while i traipse back to my dingy flat in the East End is now having to be used to pay for the debts caused because there were not enough people [prepared to] traipsing back to dingy flats in the East End to pay for the rest and our universal services and benefits. It’s run out.

And another (very quick thing).

Points 1 and 2. If we see thousands of people rough sleeping in the next few years i’ll bow to this.

3. Ensure that people on low incomes are evicted from more affluent areas and herded into ghettos

what makes a ghetto?

4. Increase overcrowding, and therefore increase ill health and reduce educational attainment.

see my point re under-occupnacy and security of tenure

5. Increase personal debt amongst people in housing need.
It doesn’t seem to bother them at the moment

6. Take £15 per week away from people who have managed to find low cost housing.

They haven;t found it. They haven’t paid for it. Tax-payers pay for it (in the main). Tax-payers pay people to find it for them. Tax-payers pay for them to live there (again, in the main).

The lights are on….there is no-one home

The cap was the red herring. THe key is in the centile at which rents are calculated. I live in an area with a great deal of property suitable for me and my daughter, for about 500pcm. I get full rent allowance, and I work, and I get tax credits. Full rent allowance does not currently cover anywhere near £500 a month- I pay the difference.
Housing benefit is calculated so that I am never more than £50 a month better off than income support rates-which is fair enough. When I earn more, the amount of housing allowance goes down.
Except it has just gone down by another £20 per week.
My tenancy ends in 5 weeks, and I had just been able to stay in the area I live in. I cannot afford to live in the town I am part of- I have quite literally just been priced out of the housing market.
My daughter starts school in September- I now have to move to the next town, I lose the school place, and I will be cut off from my friends, my daughters friends, and cannot get to them without getting a bus.
No matter how hard I work, I cannot get out of this income level. Until I earn the amount it costs to pay rent and bills on a house, and childcare-and the day I earn that, apparently my tax credits will be stopped-because I am a high earner.
I can’t earn enough to take me out of the housing benefit level. THis didn’t attack the unemployed- it attacked people who ARE working.

The problem is house prices, and childcare costs- and the thing that they are describing as the ‘benefit trap’ is the thing that keeps most us in the workplace.

70. gwenhwyfaer

A minor point, addressed to Dan (#32). Pre-sliced emmental may not be a necessity, but in the Netto round the corner from me it’s on sale at £1 a packet – so it’s not exactly expensive (in fact, it’s cheaper than their pre-sliced cheddar – and weight for weight all Netto cheese works out at a very cheap £5 a kilo, give or take).

It’s a minor point, but it reflects a major problem – those people who don’t have to worry about money *genuinely have no idea* how much things cost, and what’s expensive or cheap. You’ve lived above the plebs for so long that you haven’t realised that the bottom of the food market has compressed up; we poor people buy emmental not because we can’t prioritise money, but because sometimes we find it’s the cheapest.

71. MissGuided

I just wish the government would put a stragegy in place for more council housing and not let people struggling battle off a million other claimants to find a decent property.
There is no security for those trapped in the system. You’re faced with landlords putting the rent up every year to rates you can’t afford and unsympathetic council workers who think it’s just so easy to find a place to live.
Perhaps every council and government potential employee should be made to go through the ‘system’ itself for something like, oh say, 5 years? So that they can begin to appreciate what they put the little people through.

I xhanced upon this site while trying to find out more information about the housing benefit cuts.
I am a single man living with MS, claiming Housing Benefit and Disability Living allowance.
I was born and bred in Kensington and thus give you my humble thoughts from the front line.
My illness has robbed me of my career, my fiancee, my home and friends. I need to stay in this area because my hospital is down the road and since the disease is yet to claim my legs I walk when I can.
First, what is the profile of the average housing benefit recipient? Do you know? What mental image is conjured when the press and politicians insinuate hordes of bovine, work-shy trogs lounging around town house shangri-las, counting wads of ready cash with a cackle and a sly eye?
Just that. This is the oldest play in the book. By all means put your case but do so after employing a modicum of intellectual probity first.
The April cap is cleaverly weighted to slice the top off many rented dwellings with the hope people will stay put and stump up the cash out of their other benefits.
I was rehoused here under the local government scheme when my home was lost in local flooding three years ago.I scrimpt and saved £5 here £2 there to buy paint.
My sofa is from freecycle.
Serious xhronic illness is an expensive impediement. Would you like to trade places with me?
Has anyone had one word of comfort to say to the really vulnerable people in society? No.
We see the effect typical of emotive point scoring adopted by an odburate goverment who are involved in cut and past economics. They are yet to obligue the nation with their grand strategy.
Observe the Income by Income Household statistics for 2009. You will see that only the top two quintiles do not rely on the benefits.
The majority of middle class families rely on beneifts for 20% of their annual income.
Why are they not targetting them?
Because the government wish to whip them up into a triffle of self righteous indignation. The old ‘ housing benefit paying for £1m townhouse’ is a very unsophisticated ploy. See how easy many have been led by the nose?
This is predmeditated mob rule,
Very simple why it has worked. Just as Hitler channelled middle class German’s anger, bitter frustration caused by the depression, do does this govenment.
Cunningly they ringfence ( one their terms ) a designated area where the populus may tear apart the less fortunate.
See how the once mute voice of the tory extreme right is now so bold. Baroness Hanham went missing when the terrific floods hit Lower Addision Rd / Holland Rd, and surrounding areas. I know I lost my flat in there.
With a portion of the middle classes primed by igdignance, The ConDems will o doubt claim this to be a mandate of the nation. A vindication of their bold social vision of England.
Vince Cable? Potentially, the knock on effect from thousands loosing there home is a disaster. The government will be compelled to house people in bed and brekfastr accomodation and the landlords who run these places will obliguingly take the money; much more than the benefit pad.
Say these landlords lower their rnt? Thousands of people will be stuck in horrendeous conditions that at least used to be a stepping stone with light at the end of a tunnel; social housing. Not now.
God knows what the game plan is!
I will rest now. Lastly let me reveal I am a Cambridge graduate with a 1:1 in Economics.
My fiancee left me three weeks after my diagnosis and my so called friends slowly vanished.
May I ask one thing of you nay sayers? Compassion is not a right. All life should b respected. You will always have those who rip off the system; just like the greedy people who put us here in the first place and the blame lies on many more shoulders than those few dozen bankers.


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  39. Who is the real loser in the Housing Benefit cap? :: Let’s talk about me :: maxbrockbank.com

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