DWP admits cuts risk increasing homelessness


5:01 pm - November 30th 2010

by Don Paskini    


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The Department of Work and Pensions have just published their impact assessment of the housing benefit cuts. It is an assessment by civil servants of the possible consequences of introducing these policies. Here’s their summary:

“The impact assessment recognises that there are a number or risks as follows:

• increases in the number of households with rent arrears, eviction and households presenting themselves as homeless;
• disruption to children’s education and reduced attainment;
• disruption to support services for people with disabilities and other households with care and support needs;
• an increase in the number of households living in overcrowded conditions; and
• a decrease in the number of and quality of private rented sector properties available to Housing Benefit tenants.”

In addition,

“The Department’s assessment is that overall if housing choices or rent levels are unaffected the changes could mean that:
• households would lose on average £12 per week including any loss of excess;
• 17,400 households in London could be affected by the caps, the majority currently living in central or inner London boroughs;
• Around 3,600 families nationally could be affected by the restriction to the four bedroom rate (including 200 in Wales and 110 in Scotland)
• 770,000 households nationally could be affected by the reduction to the 30th percentile (including around 40,000 in Wales and a similar number in Scotland).”

In mitigation, the report notes that the aim of these reforms is to change people’s behaviour, and that this will minimise the impact of these cuts. It also notes that “This information cannot be readily translated into conclusions on whether households would move or where they would move to” and that “it is not possible to assess behavioural effects”. So much for evidence-based policy.

The government spin was that their cuts were all about capping benefits for a small number of families in inner London. But even their own reports spell out the truth – these cuts will hit hundreds of thousands, will increase homelessness and overcrowding, disrupt the education and attainment of poor children, disrupt services for disabled people and force people on low incomes into even poorer quality housing.

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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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Reader comments


1. scandalousbill

Good Article Don.

The most foreboding aspect you allude to is the following:
“In mitigation, the report notes that the aim of these reforms is to change people’s behaviour, and that this will minimise the impact of these cuts. It also notes that “This information cannot be readily translated into conclusions on whether households would move or where they would move to” and that “it is not possible to assess behavioural effects”. So much for evidence-based policy.”

First of all, the DWP announced policy of evicting people from social housing when they start earning money is hardly a policy that would “minimise THE IMPACTS OF THESE CUTS”, (my emphasis), is a complete absurdity. It becomes more bizarre when considered within the context of VAT increases, raising social housing rents to 80% of market, a pitiful coalition strategy for new low cost housing, shifting incapacity claimants and single mothers to the JSA under a policy which has swamped the appeals process, and the list does go on and on, in an economy where the job applicants already outstrip the available job placements. Additionally, the future job prospects for many, by most accounts is set to severely deteriorate and create a deeper and more convulsive downward cycle of despair.

The coalition and their business friends continually point to an envisaged business boom where the private sector growth more than makes up for government job cuts. Unfortunately, even the OBR has downsized its future predictions for growth. Where indeed will the jobs come from? The bad situation you depict IMHO will become considerable worse.

Don,
the key words are “presenting themselves”
You are usually sensible and thoughtful so may I point out that the only way more families in total will be homeless is if either (i) the number of families increases as a result of these measures (possible but unlikely to be more than you can count on your fingers) or (ii) the number of homes decreases (ditto) or (iii) some landlords choose to leave their properties empty rather than receive a lower rent because no-one who is not receiving housing benefit is willing to rent the property.
A landlord might just possibly do that if the future cost in terms of pushing up the rents on his/her/its other properties outweighed the loss of keeping some empty but the only landlords in London with a large enough housing stock to affect prices are, apart from local authority/social housing, the Peabody Trust and the Grosvenor Estates – Peabody rents are far, far below the DWP threshold and there will be few people who will support a policy of financing the rents of the unemployed in the nicer areas of Mayfair in preference to Lord Freud’s suggestion that housing benefit should cover, where appropriate, a room for a non-family carer for the disabled.
So your title is inaccurate – probably it was only imprecise when you wrote it but it comes across as inaccurate when I read it.
“households would lose on average £12 per week including any loss of excess;” – taken out of context. If you maintain your normal level of honesty you should exclude the loss of excess, imposed by Alastair Darling, and look at the IDS/Freud proposals under which it is £7 a week [and this is massively distorted by the handful of households who are receiving more in benefits (housing, JSA or working tax credit, child benefit, child tax credits, council tax etc etc) than my pension and full-time earnings combined and who will, after these cuts, still receive more in housing benefit than I earn]. 1% of households receiving housing benefits get an average of £422 per week (equivalent to £621 per week before deduction of income tax and NI). Only Polly Toynbee regards those spending £22k on rented housing as poor (even millionaire Ed Miliband includes them in his squeezed middle), but normal people like me would prefer that our taxes were used to help those poorer than ourselves – there are plenty enough of those who genuinely need help.

3. scandalousbill

John77,

You seem a sincere man, but I have a number of issues with your original assumptions.

“the only way more families in total will be homeless is if either (i) the number of families increases as a result of these measures (possible but unlikely to be more than you can count on your fingers) or (ii) the number of homes decreases (ditto) or (iii) some landlords choose to leave their properties empty rather than receive a lower rent because no-one who is not receiving housing benefit is willing to rent the property.”

I believe that the he increase of the number of families affected by these measures is not exclusively dependent upon the impact of the policy. I believe the significant increase in unemployment that many have forecasted will add a significant amount to this category.
Secondly, the number of homes available does not have to decrease as there already is a shortage. In addition, the coalition promise of 150, 00 new units, even if achieved, has been seen by many to fall well short of resolving the current problem.
With regard to your point regarding excess, it seems to me that a more appropriate context for consideration is to view these monies within the context of rapidly rising cost of utilities, inflationary pressures on basic food and living costs and the VAT increase. To me the problem is much more than a simple CPI/RPI type comparison or the implenting of arbitrary monetary policy limits set by the coalition. A fair policy should take consideration of the circumstances of the effected individuals as its starting point.

don,
didn’t you know, it’s all done in the name of “increasing social mobility”.
(The Gospels of Apostle Nick Clegg, Revised Standard Version, First Epistle 11:25)

The whole policy is laughable. This idea that once people have a job you evict them and they have to find private housing. Is this supposed to encourage people to find work? In my view its more likely to discourage them. Still, I suppose we have the Lib Dems to thank for that.

@scandalousbill
My assumption is that the laws of arithmetic continue to apply. What is yours?
I am not disputing that there is a housing shortage which is the principal reason for the ridiculous price of houses in the south-east BUT the question is whether the coalition’s housing benefit cuts will *increase* the number of homeless families and the answer is that, of themselves, they will not. They may, very possibly, make different people homeless.
I have re-read all 20 pages and can find nothing about a DWP policy of evicting from social housing tenants who start earning money.
The government has stated that it will not and indeed cannot change the rules for existing tenants. What it has proposed is that *future* tenants should be periodically be subject to review and those with significantly higher incomes should not automatically get a 50% subsidy from council tax payers – the two jags in a council house syndrome which generates widespread resentment among private tenants with a Ford Escort or a Metro. If he/she starts earning money as a shop assistant the tenancy will be unaffected but if he/she starts earning money as a trader for Goldman Sachs then at the end of two or three years the Council will say – someone is in much greater need of subsidised accommodation than you are. This actually makes sense as it will be allocating subsidies where they are needed instead of the poor subsidising the highly-paid but it is not part of the question as set. If you really believe that every tenant of a council house is entitled to a 50% rent subsidy for life irrespective of his/her income, then I suggest that you should write to Mr Cameron and put your case but it is irrelevant to the original topic of this thread.

7. scandalousbill

John 77

“What it has proposed is that *future* tenants should be periodically be subject to review and those with significantly higher incomes should not automatically get a 50% subsidy from council tax payers – the two jags in a council house syndrome which generates widespread resentment among private tenants with a Ford Escort or a Metro. If he/she starts earning money as a shop assistant the tenancy will be unaffected but if he/she starts earning money as a trader for Goldman Sachs then at the end of two or three years the Council will say – someone is in much greater need of subsidised accommodation than you are.”
You omitted should they marry into the Royal Family or dance in the X-factor or should Bill Gates be granted Unlimited Leave to remain in the UK…
While every right wing news rag, reactionary blogger, IDS and the Tory Cabinet plus you, seems to thrive on such bile, I, for one, am not impressed. Unless you can use the laws of arithmetic you possess to provide a number or percentage of the effected population to which your description can be attached, could I suggest we proceed in discussion without the melodramatics.

With regard to your position, i.e.:“…the question is whether the coalition’s housing benefit cuts will *increase* the number of homeless families and the answer is that, of themselves, they will not.”

From what I gather, you seem to feel that if we have a certain number of homeless people before the policies are introduced, and these people remain homeless afterwards, the policy cannot be held into account. My position differs in that it is at fault primarily because it has facilitated this status quo situation. If I have misunderstood you or your logic, please elaborate.

@ scandalousbill I do not know how much you have misunderstood me and how far you have chosen to misrepresent me.
I have never laid claim to ownership of the laws of arithmetic nor, before you ask to the law of gravity or the Sun, Moon and stars.
“From what I gather, you seem to feel that if we have a certain number of homeless people before the policies are introduced, and these people remain homeless afterwards, the policy cannot be held into account. My position differs in that it is at fault primarily because it has facilitated this status quo situation.”
Firstly – the question was whether the change in Housing benefit rules would increase the number of homeless – and the answer to that is “No” unless some landlords choose to impoverish themselves rather than accept unsubsidised tenants at the new market-clearing rent. That is not the same as saying the policy cannot be held to account. Secondly the proposed change in housing benefits rules that have not yet taken effect cannot be held responsible for the current housing situation.
The waiting list for council houses/social housing is appalling not because of IDS, who has never been housing minister but because under New Labour more council houses were sold than were built, but that is off-topic.
I should like social housing to be allocated to those in need of it rather than to the extremely grandchildren of former tenants or MPs or England cricketers with a second home in the South of France. Why is it that “bile”? What has it got to do with Don Paskini’s post? Why can you never admit that you are wrong?
Following you off-topic, the two jags in a council house syndrome has three bad effects – (i) it deprives a household with more need of subsidised decent accommodation (ii) it transfers wealth from poorer private sector tenants to wealthier council tenants (iii) – probably biggest – it generates resentment about the subsidy so that councils and government are pressured to cut back on resources for social housing with the result that several families are deprived of accommodation in houses that do not get built.

9. scandalousbill

John 77

“I should like social housing to be allocated to those in need of it rather than to the extremely grandchildren of former tenants or MPs or England cricketers with a second home in the South of France. Why is it that “bile”?”

You are so right. I must apologize, it’s not bile, it is drivel.

BTW the “laws of arithmetic” is taken from your response @6 as is the two jags syndrome.

You may want to look at this article, http://www.ageuk.org.uk/latest-news/fears-over-housing-benefit-reforms/

They seem to be quite concerned, but then again, I suppose they could always sell one of their jags or rent out the summer home in the south of France, right?

@ 9 scandalousbill
“My assumption is that the laws of arithmetic continue to apply.” is *not* the same as “the laws of arithmetic you possess”
Why do you think it is drivel to want social housing to be used for those who need it?
Age UK is raising a matter for genuine concern – which is not the subject of Don Paskini’s blog. Your unjustified sneer detracts from your attempt to make a valid but irrelevant point. They have over-egged their pudding by misreading or misquoting £12 per week instead of £7and suggesting that pensioners on housing benefit are living in a 3-bedroom privately rented house: in fact Michelle Mitchell is just plain wrong in saying that all the elderly on housing benefit will lose out – 32% of all those on housing benefit will not lose out, and the %age of pensioners will be greater; and an analysis of the effect on pensioners would almost certainly show that the average loss will be less than £7 per week as pensioners on housing benefit do not rent five-bedroom houses from private landlords.

11. scandalousbill

John 77

“My assumption is that the laws of arithmetic continue to apply.” is *not* the same as “the laws of arithmetic you possess”

Whatever!

“Why do you think it is drivel to want social housing to be used for those who need it?”

I don’t. It is your mindless blather I consider drivel.

“in fact Michelle Mitchell is just plain wrong in saying that all the elderly on housing benefit will lose out – 32% of all those on housing benefit will not lose out…”

What about the other 68%? So much for your zero impact assessment.

Regardless of what type of shine you wish to put on the situation, I feel that you are simply attempting to polish a terd. I believe that you are sufficiently narrow minded and short sighted than no argument contrary to yours will be accepted. The fact remains that the the policies outlined in Duncan’s article will hit the most vulnerable the hardest. I wish you well in your self contained little dreamland and hope that you do not fall victim to the policies you so lovingly praise. Remember, Dave Cameron is proud of you!

There is no point in trying to carry out a civilised debate with someone whose main focus is indulging him/herself in foul-mouthed insults while ignoring the facts and constantly lying about what I said.


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