Welfare Reform Bill

Memorandum submitted by London Councils (WR 57)

Introduction.

On the afternoon of 24 March, Cllr Steve Read gave oral evidence on behalf of London Councils to the Bill Committee. There were a number of questions put by MPs that day where it c ould be useful to provide additional information to what was said on the day itself. The questions can be grouped as follows.

Questions 240-242 on the under-occupation of social housing and the relation of this to housing need.

The detailed information on the comparison of housing need and under-occupancy in the social sector is not readily available, and undertaking research to gather this information is currently prohibitively expensive. However, as Cllr Reed advised, apocryphal evidence indicates that resolving under-occupancy would not make significant inroads into housing need. It is our considered view that it would not be appropriate to cut the level of housing support provided to a low income household while their remains an insufficient supply of alternative affordable appropriately sized accommodation.

Questions 243-245 on disabled adaptation and if this is a significant issue in ability to move and housing stock.

This information is not collected as a matter of course by boroughs or by London Councils. Collecting it could be provided only at disproportionate cost.

Questions 249-255 on what downward pressure there is on rents – if any.

Rent rates in London are very volatile and relate to a number of different economic and social factors. Any changes in rents take place at different rates in different areas of London. In spite of this, we have no evidence that rents are reducing in London, in fact we believe that the reverse is true. We will continue to monitor the situation.

Questions 256-259 on the impact of the benefit cap on housing benefit.

The proposed total benefit caps (£26,000 for a family household and £18,200 for a single person) do not take into account London’s higher accommodation costs. As a consequence it is likely that low income families will be unable afford to rent in large parts of the capital.

Using March 2011 Rent Service data, families with two children and looking for property in the private sector with two bedrooms in central London and inner London, will have to significantly supplement their rent support from the basic amounts they are currently entitled to for personal support (by up to £38 per week).

Even access to social housing will be affected, particularly for larger families (more than 3 children). Based on current rates, a couple with four children will have £127 per week to meet their housing costs, but the rent for a three bedroomed social sector property in areas such a Wandsworth is £148 per week, a difference of £21. This shortfall is exacerbated for larger families.

It should be remembered that this analysis is based on the amount of financial support available to spend on rent once only the basic living expenses have been accounted for. If all the balance is diverted to meet the rent charge, there is no money left over for other costs not yet budgeted for, such as travel costs or childcare. This in turn is likely to significantly hamper the opportunities for moving back into work.

A full breakdown of the affect across London is attached at appendix A below

The adverse impact on London families becomes even more widespread if the Affordable Rent model, under which registered social landlords can charge up to 80% of the market rent, is factored in. Again, extrapolating from Rent Service data (Jan 2011) families with more than three children are unable to rent appropriately sized property either in the private sector or in an "affordable rent" housing association home anywhere in London, without diverting some of the financial support for food clothing etc towards the rent.

Even smaller families are affected. Couples and single parents with a single child are faced with the prospect of being unable to afford to rent a two bedroomed property in central/inner London.

A breakdown showing the effect of the cap against "affordable rents" across London is attached at appendix B below

Appendix A

Private Rent Sector affordability within the Universal Credit Cap in London

Proposed Universal Credit cap

amount of benefit paid for personal support*

Balance left for rent payments

(up to cap)

Balance left for rent payments

(up to cap)

Per annum

Per annum

Per annum

Per week

single person

£18,200

£3,510

£14,690

£282

Single parent 1 child

£26,000

£7,656

£18,344

£352

couple with 1 child

£26,000

£9,655

£16,345

£314

single parent 2 children

£26,000

£10,897

£15,102

£290

Couple with 2 children

£26,000

£12,896

£13,103

£252

single parent 3 children

£26,000

£14,138

£11,862

£228

couple with 3 children

£26,000

£16,137

£9,863

£190

single parent with 4 children

£26,000

£17,379

£8,621

£166

couple with 4 children

£26,000

£19,378

£6,622

£127

Single parent with 5 children

£26,000 

£20,620 

£5,380 

£103 

Couple with 5 children

£26,000

£22,619

£3,381

£51

* Using Income Support rates April 2011

Comparison of expected LHA limits based on March 2011, 30th percentile figures and affordability: shaded areas will not be affordable to the given family types despite the properties being at or below their allowed bedroom size

BRMA

shared

1 bed

2 bed

3 bed

4 bed

Central London

£137.50

£250.00

£290.00

£340.00

£400.00

Inner East London

£91.15

£225.00

£280.00

£330.00

£400.00

Inner North London

£99.23

£250.00

£290.00

£340.00

£400.00

Inner South East London

£85.00

£176.54

£225.00

£276.92

£357.69

Inner South West London

£99.58

£219.23

£288.00

£340.00

£400.00

Inner West London

£98.50

£219.23

£281.77

£340.00

£400.00

North West London

£80.08

£173.08

£207.69

£276.92

£323.08

Outer East London

£71.62

£161.54

£196.15

£242.31

£290.00

Outer North East London

£68.27

£150.00

£184.62

£219.23

£300.00

Outer North London

£78.50

£173.08

£225.00

£277.00

£346.15

Outer South East London

£73.15

£150.00

£180.00

£213.46

£276.92

Outer South London

£75.50

£150.00

£184.62

£230.77

£300.00

Outer South West London

£80.00

£183.46

£230.77

£276.92

£357.69

Outer West London

£75.19

£161.54

£198.46

£242.31

£288.46

Appendix B

Access to accommodation at 80% of January 2011 LHA rates on rent support left after the personal allowance has been deducted from the cap for various household types.

single person

single parent

1 child

Couple

1 child

single parent

1 child

couple 1 child

single parent

2 children

Couple

2 children

single parent

3 children

Couple

3 children

single parent

4 children

Couple

4 children

BRMA

1 bed

2 bed

3 bed

Barking & Dag

Outer NE

£124.62

£124.62

£124.62

£156.92

£156.92

£156.92

£156.92

£193.85

£193.85

£193.85

£193.85

Barnet

NW

£138.46

£138.46

£138.46

£175.38

£175.38

£175.38

£175.38

£230.77

£230.77

£230.77

£230.77

Outer N

£143.08

£143.08

£143.08

£184.80

£184.80

£184.80

£184.80

£240.00

£240.00

£240.00

£240.00

Inner N

£208.00

£208.00

£208.00

£272.00

£272.00

£272.00

£272.00

£360.00

£360.00

£360.00

£360.00

Bexley

Outer SE

£124.62

£124.62

£124.62

£152.30

£152.30

£152.30

£152.30

£183.70

£183.70

£183.70

£183.70

Brent

NW

£138.46

£138.46

£138.46

£175.38

£175.38

£175.38

£175.38

£230.77

£230.77

£230.77

£230.77

Inner W

£192.00

£192.00

£192.00

£252.00

£252.00

£252.00

£252.00

£316.00

£316.00

£316.00

£316.00

Inner N

£208.00

£208.00

£208.00

£272.00

£272.00

£272.00

£272.00

£360.00

£360.00

£360.00

£360.00

Bromley

inner SE

£152.30

£152.30

£152.30

£203.08

£203.08

£203.08

£203.08

£240.00

£240.00

£240.00

£240.00

Outer SE

£124.62

£124.62

£124.62

£152.30

£152.30

£152.30

£152.30

£183.70

£183.70

£183.70

£183.70

Camden

Central

£296.00

£296.00

£296.00

£438.48

£438.48

£438.48

£438.48

£620.00

£620.00

£620.00

£620.00

Inner N

£208.00

£208.00

£208.00

£272.00

£272.00

£272.00

£272.00

£360.00

£360.00

£360.00

£360.00

City of London

Central

£296.00

£296.00

£296.00

£438.48

£438.48

£438.48

£438.48

£620.00

£620.00

£620.00

£620.00

Croydon

inner SE

£152.30

£152.30

£152.30

£203.08

£203.08

£203.08

£203.08

£240.00

£240.00

£240.00

£240.00

Outer S

£124.62

£124.62

£124.62

£156.92

£156.92

£156.92

£156.92

£193.85

£193.85

£193.85

£193.85

Ealing

NW

£138.46

£138.46

£138.46

£175.38

£175.38

£175.38

£175.38

£230.77

£230.77

£230.77

£230.77

Inner W

£192.00

£192.00

£192.00

£252.00

£252.00

£252.00

£252.00

£316.00

£316.00

£316.00

£316.00

Inner N

£208.00

£208.00

£208.00

£272.00

£272.00

£272.00

£272.00

£360.00

£360.00

£360.00

£360.00

Outer W

£138.46

£138.46

£138.46

£166.15

£166.15

£166.15

£166.15

£203.08

£203.08

£203.08

£203.08

Enfield

Outer N

£143.08

£143.08

£143.08

£184.80

£184.80

£184.80

£184.80

£240.00

£240.00

£240.00

£240.00

Greenwich

inner SE

£152.30

£152.30

£152.30

£203.08

£203.08

£203.08

£203.08

£240.00

£240.00

£240.00

£240.00

Outer SE

£124.62

£124.62

£124.62

£152.30

£152.30

£152.30

£152.30

£183.70

£183.70

£183.70

£183.70

Hackney

Central

£296.00

£296.00

£296.00

£438.48

£438.48

£438.48

£438.48

£620.00

£620.00

£620.00

£620.00

Inner N

£208.00

£208.00

£208.00

£272.00

£272.00

£272.00

£272.00

£360.00

£360.00

£360.00

£360.00

Inner East

£192.00

£192.00

£192.00

£240.00

£240.00

£240.00

£240.00

£280.00

£280.00

£280.00

£280.00

Hamm & Fulham

Central

£296.00

£296.00

£296.00

£438.48

£438.48

£438.48

£438.48

£620.00

£620.00

£620.00

£620.00

Inner W

£192.00

£192.00

£192.00

£252.00

£252.00

£252.00

£252.00

£316.00

£316.00

£316.00

£316.00

Inner N

£208.00

£208.00

£208.00

£272.00

£272.00

£272.00

£272.00

£360.00

£360.00

£360.00

£360.00

Haringey

Outer N

£143.08

£143.08

£143.08

£184.80

£184.80

£184.80

£184.80

£240.00

£240.00

£240.00

£240.00

Inner N

£208.00

£208.00

£208.00

£272.00

£272.00

£272.00

£272.00

£360.00

£360.00

£360.00

£360.00

Harrow

NW

£138.46

£138.46

£138.46

£175.38

£175.38

£175.38

£175.38

£230.77

£230.77

£230.77

£230.77

Havering

Outer NE

£124.62

£124.62

£124.62

£156.92

£156.92

£156.92

£156.92

£193.85

£193.85

£193.85

£193.85

Essex

£101.54

£101.54

£101.54

£129.23

£129.23

£129.23

£129.23

£156.92

£156.92

£156.92

£156.92

Hillingdon

NW

£138.46

£138.46

£138.46

£175.38

£175.38

£175.38

£175.38

£230.77

£230.77

£230.77

£230.77

Outer W

£138.46

£138.46

£138.46

£166.15

£166.15

£166.15

£166.15

£203.08

£203.08

£203.08

£203.08

SW Herts

£120.00

£120.00

£120.00

£156.92

£156.92

£156.92

£156.92

£193.85

£193.85

£193.85

£193.85

Hounslow

Outer W

£138.46

£138.46

£138.46

£166.15

£166.15

£166.15

£166.15

£203.08

£203.08

£203.08

£203.08

Inner W

£192.00

£192.00

£192.00

£252.00

£252.00

£252.00

£252.00

£316.00

£316.00

£316.00

£316.00

Outer SW

£156.92

£156.92

£156.92

£203.08

£203.08

£203.08

£203.08

£240.00

£240.00

£240.00

£240.00

Islington

Central

£296.00

£296.00

£296.00

£438.48

£438.48

£438.48

£438.48

£620.00

£620.00

£620.00

£620.00

Inner N

£208.00

£208.00

£208.00

£272.00

£272.00

£272.00

£272.00

£360.00

£360.00

£360.00

£360.00

Outer N

£143.08

£143.08

£143.08

£184.80

£184.80

£184.80

£184.80

£240.00

£240.00

£240.00

£240.00

Inner East

£192.00

£192.00

£192.00

£240.00

£240.00

£240.00

£240.00

£280.00

£280.00

£280.00

£280.00

Ken & Chelsea

Central

£296.00

£296.00

£296.00

£438.48

£438.48

£438.48

£438.48

£620.00

£620.00

£620.00

£620.00

Inner N

£208.00

£208.00

£208.00

£272.00

£272.00

£272.00

£272.00

£360.00

£360.00

£360.00

£360.00

Kingston

Outer SW

£156.92

£156.92

£156.92

£203.08

£203.08

£203.08

£203.08

£240.00

£240.00

£240.00

£240.00

Outer S

£124.62

£124.62

£124.62

£156.92

£156.92

£156.92

£156.92

£193.85

£193.85

£193.85

£193.85

Lambeth

inner SE

£152.30

£152.30

£152.30

£203.08

£203.08

£203.08

£203.08

£240.00

£240.00

£240.00

£240.00

inner SW

£200.00

£200.00

£200.00

£249.23

£249.23

£249.23

£249.23

£308.00

£308.00

£308.00

£308.00

Lewisham

inner SE

£152.30

£152.30

£152.30

£203.08

£203.08

£203.08

£203.08

£240.00

£240.00

£240.00

£240.00

Outer SE

£124.62

£124.62

£124.62

£152.30

£152.30

£152.30

£152.30

£183.70

£183.70

£183.70

£183.70

Merton

Outer S

£124.62

£124.62

£124.62

£156.92

£156.92

£156.92

£156.92

£193.85

£193.85

£193.85

£193.85

inner SW

£200.00

£200.00

£200.00

£249.23

£249.23

£249.23

£249.23

£308.00

£308.00

£308.00

£308.00

Outer SW

£156.92

£156.92

£156.92

£203.08

£203.08

£203.08

£203.08

£240.00

£240.00

£240.00

£240.00

Newham

Outer E

£133.85

£133.85

£133.85

£166.15

£166.15

£166.15

£166.15

£204.00

£204.00

£204.00

£204.00

Redbridge

Outer E

£133.85

£133.85

£133.85

£166.15

£166.15

£166.15

£166.15

£204.00

£204.00

£204.00

£204.00

Outer NE

£124.62

£124.62

£124.62

£156.92

£156.92

£156.92

£156.92

£193.85

£193.85

£193.85

£193.85

Southwark

inner SW

£200.00

£200.00

£200.00

£249.23

£249.23

£249.23

£249.23

£308.00

£308.00

£308.00

£308.00

Sutton

Outer SW

£156.92

£156.92

£156.92

£203.08

£203.08

£203.08

£203.08

£240.00

£240.00

£240.00

£240.00

Outer s

£138.46

£138.46

£138.46

£166.15

£166.15

£166.15

£166.15

£203.08

£203.08

£203.08

£203.08

Tower Hamlets

Inner East

£192.00

£192.00

£192.00

£240.00

£240.00

£240.00

£240.00

£280.00

£280.00

£280.00

£280.00

Central

£296.00

£296.00

£296.00

£438.48

£438.48

£438.48

£438.48

£620.00

£620.00

£620.00

£620.00

Waltham Forest

Outer East

£192.00

£192.00

£192.00

£240.00

£240.00

£240.00

£240.00

£280.00

£280.00

£280.00

£280.00

Outer NE

£124.62

£124.62

£124.62

£156.92

£156.92

£156.92

£156.92

£193.85

£193.85

£193.85

£193.85

Wandsworth

inner SW

£200.00

£200.00

£200.00

£249.23

£249.23

£249.23

£249.23

£308.00

£308.00

£308.00

£308.00

Outer SW

£156.92

£156.92

£156.92

£203.08

£203.08

£203.08

£203.08

£240.00

£240.00

£240.00

£240.00

Westminster

Central

£296.00

£296.00

£296.00

£438.48

£438.48

£438.48

£438.48

£620.00

£620.00

£620.00

£620.00

Inner N

£208.00

£208.00

£208.00

£272.00

£272.00

£272.00

£272.00

£360.00

£360.00

£360.00

£360.00

Highlighted areas are not accessible to these household types

April 2011