Supplementary evidence from the Rev Paul
Nicolson, Zacchaeus 2000 Trust (Z2K)
THREE CURRENT CASES BEING HANDLED BY Z2K
IN WHICH RENT IS
TOO HIGH AND INCOMES TOO LOW
CASE I
Mr X visited the office on the 17 August. His housing
benefit is £200 a month and his rent is £1,000 for a
two bedroom flat in Hendon, in private accommodation, where he
lives with his son, and his salary can't cover the remainder of
his rent.
CASE II
New case on the 17 August where the client is earning
£848 a month and has to pay £400 rent and council tax,
which leaves him about £15 a day. He hasn't been paying his
rent and had an eviction hearing on the 18 August our volunteer
went with him and asked the judge to give us time to help sort
out his problems, and the judge adjourned the case for 30 days.
CASE III
Summary
The Y family was homeless, in the sense of having
no settled accommodation for 2.5 years. They applied to Westminster
for help with their homelessness in May 2009 and eventually were
able to move into appropriate accommodation in April 2010 because
of the help in arranging a deposit provided by Hackney SS. Westminster
provided no help whatsoever despite there being four relevant
children to whom Westminster owed a duty under the Children Act.
The family members have suffered appalling stress through living
in overcrowded accommodation and then, when in temporary accommodation
being under continuous threat of imminent eviction. Mr Y suffers
from psoriasis, a condition aggravated by stress and Mrs Y has
problems with her heart, these medical conditions were made known
to Westminster who took no notice. Without the intervention of
Z2K this family would have been literally on the streets. There
situation remain precarious because they cannot really afford
the only accommodation they could find. The rent is £1,800
pm and the Local Housing Allowance for four bedrooms in that area
is £1,495, leaving them having to pay £305 pm above
their housing benefit and they are very worried about getting
into arrears again as Mr Y is on a very low income.
DETAILED CHRONOLOGY
Background
- The Y family consists of Mr and Mrs Y, two adult
children (one aged 18 in full time education) and younger children
(currently aged 16, 12 and 10).
They resided in, Westminster, London under a secure
tenancy from November 1996 to November 2007 when they were evicted
due to rent arrears of £12,274.53.
Mr Y lost his job in 2002 but then started working
part time. His Housing Benefit was stopped in January 2002 for
reasons which he did not understand. It resumed in April 03 but
again stopped in May 04 when it was said that he had not been
in receipt of Income Support or Jobseekers Allowance and had failed
to notify this change in circumstance and had been overpaid £4,961.56
in Housing Benefit. He appealed against this decision but the
appeal rejected on 16 March 2005.
NOTE: the two accounts of Mr Y and Westminster differ
considerably about what happened between January 2002 to May 2004.
From October 2007, the Y family were evicted from
their property and were poorly advised by CAB that their children
may be taken into care. As a result they did not ask for any help
and divided themselves and lived separately with two family members
(including an 80 year old grandmother) in very overcrowded conditions.
In May 2009 the family visited Housing Options (HO)
and explained heir circumstances and appear to have been treated
as making a homelessness application as they had an interview
and were then told to take all the children out of school for
a second interview which they did only to be told when they arrived
at the HO office that no one could see them that day. Someone
also visited the accommodation which the wife and eldest child
were living but not the very overcrowded flat in which all the
other family members were living with the grandmother. They were
told , without any investigation of the circumstances that as
they had been evicted for arrears that they would be found intentionally
homeless but no formal decision was ever made, no help was offered
and there was no reference to Social Services.; Z2K's Involvement:
28 July 2009, Mr and Mrs
Y had their first meeting with Z2K having been referred by their
MP Karen Buck. Z2K spoke to HO and were told that no decision
had been made because no formal homelessness application had been
made and that such application was bound to fail. Z2K advised
Mr Y to make a homelessness application on the basis that the
failure to pay the earlier arrears was not his fault;
27 August 2009, this application
was rejected and Mr Y and his family were found to be intentionally
homeless. Z2K put in an appeal on the family's behalf on 3 September;
26 October 2009 —
Mr Y's Homelessness Appeal under Regulation 8(2) of the Allocation
of Housing and Homelessness (Review Procedures) Regulations 1999
was refused.
The basis of this decision was that Mr Y's arrears
were a "direct consequence of his own actions"; in particular,
failing to notify Westminster of changes of circumstance and receipt
of benefits in addition to failing to submit a new claim form
when required also, it was held that Mr Y made insufficient attempts
to pay the rent and reduce the arrears. No help with housing the
family was offered and there was again no reference to Social
Services.;
24 September 2009 —
Mrs Y then went to make a homelessness application in her own
name as she had not been responsible for the failure to pay the
arrears. However Westminster treated this as an application to
be put on the housing register and is told that she is placed
on the General Housing Register and that no houses are available
as she is not considered homeless.
Z2K faxed a letter to Westminster on 28/09/09 repeating
Mrs Y's request for a homelessness review. When neither they nor
Mrs Y heard anything Z2K wrote and rang Westminster repeatedly
and were told different things by numerous different people but
still no progress was made with the homelessness application.
Eventually Z2K was told that Mrs Y must come into Housing Options
to make her application again in person on 13 November. She did
so and no one would see her. After further telephone calls Mrs
Y was eventually interviewed on 16 November;
30 December 2009 —
Mrs Y's application for housing under Part VII of the Housing
Act is refused on the basis Mrs Y was intentionally homeless further
to section 191 Housing Act 1996 on the basis that Mrs Y was said
to be sufficiently aware of the circumstances of her homelessness
and was responsible as a joint tenant.
This decision was made notwithstanding the concern
expressed by Z2K regarding the propriety of the same caseworker
making the decision in both Mr Y and Mrs Y's cases especially
when she had twice expressed a view about the outcome of the investigation
before it had been carried out.
Whilst the investigation into Mrs Y application was
proceeding, Mr and Mrs Y asked for temporary housing because their
living conditions have become utterly intolerable. In Dec 09 they
are temporarily re-housed in Lea Bridge Road Hotel in Hackney.
This means the family had to spend over £20 per day to get
Mr Y to work and the children to their schools as the journeys
require three buses:
7 January 2010 The Y family
was given notice (a letter dated 30/12/09 was not received) that
their temporary accommodation runs out on 18/01/10. Yet again
no referral by Westminster is made to Social Services despite
the imminent homelessness of four children. When the issue was
raised by Z2K, they were told they can self refer but not of course
to Westminster because the have now been housed outside the borough
of Westminster. In view of the imminent eviction Z2K contacted
Hackney Social Services on 8 January 2010.They were extremely
reluctant to become involved but eventually agreed to do so and
carried out an investigation. They reported total lack of help
of any kind from Westminster;
13 January 2010 —
In response to an appeal Westminster upheld the merits of the
homelessness application by stating that Mrs Y had "acted
in bad faith" by not taking responsibility for financial
matters for which she was responsible. The Council also refused
to provide accommodation during a section 202 review;
16 February 2010 —
Stage One Complaint; upheld two counts of a complaint regarding
obligations under section 213A of the Housing Act 1996 and Homelessness
Act 2002 for failure to inform Social Services when a family with
children had been made intentionally homeless;
24 February 2010 —
Review of homelessness decision under section 202 Housing Act
1996; Mrs Y's appeal rejected. Shortly after this point, Hackney
Social Services (Hackney SS) came to the conclusion that the Y
family must find private rented accommodation but accept that
they cannot find a deposit and introduced them to a charity Davish
Enterprise Development Centre who will help. Beyond this Hackney
SS refused to help further. Meanwhile Westminster reluctantly
extended the temporary accommodation in small increments of time
whilst Hackney was carrying out the review and whilst the Y family
were looking for private accommodation;
8 March 2010 — The
Y family obtained confirmation from Davish that they will guarantee
a deposit. However they had enormous difficulty in finding somewhere
reasonably convenient for Mr Y's job in Camden and the children's
schools in Kensington and Chelsea which will take tenants on housing
benefit and which falls within the Local Housing Allowance (LHA).
They have to pay a non recoverable fee of £300 to estate
agents to be shown properties at all. Davish was also extremely
difficult to deal with.
The Y family ended up moving into a property in Brent,
the rent of which is £1,800 pm and the LHA for four bedrooms
in that area is £1495, leaving them having to pay £305
pm above their housing benefit and they are very worried about
getting into arrears again as Mr Y is on a very low income.
ADDENDUM
In our first submissions to the SSAC and the Work
and Pensions Committee we sought to understand how the huge call
on the HB budget (£21 billion per year) arose. We said it
was because of the failures in financial management over the period
1980-2005; that the financial deregulations of the early 1980s
allowed house purchase lending to spiral out of control thus driving
house prices to unprecedented levels and with them rents, which
by various mechanisms reflect house price movements and consequentially
housing benefit.
It has now been drawn to our attention that, simultaneously,
the Housing Act 1988 allowed landlords to charge a market rent,
thus leading rents to spiral after 15 January 1989. This removed
rent controls from the Rent Act 1977 scheme, yet again inevitably
increasing housing benefit and the cost to the Tax Payer.
None of the disastrous spiralling rise in the price
of houses or rents is the responsibility of housing benefit claimants,
but they are being punished for the errors of successive governments
by the requirement to pay the balance of rents above arbitrary
caps out of poverty level wages or unemployment benefits; or be
threatened with eviction and consequent misery. Local Housing
Allowance began this policy of ignoring the means test; the cap
continues it.
These are a deeply unjust consequences of bad housing
policies introduced by the 1979 government and allowed to continue
by the 1997 government.
FURTHER SUBMISSION
Z2K is proposing a Royal Commission on Housing, which
touches the heart of the UK economy and the well being of our
citizens. It provides an opportunity to address the intrinsic
inequality in the distribution of wealth and incomes governing
the ownership of land and the provision of housing, which produces
poor, sometimes even disastrous, social and economic outcomes,
any comments would be welcome.
PROPOSAL FOR
A ROYAL
COMMISSION ON
HOUSING
It is apparent that the UK has a financial crisis
of its own making. The deficit, currently expected to be £165
billion in 2011, and the housing benefit cost of £21 billion
are the consequences of governmental action and inaction since
1979. It is necessary to understand how we got to where we are.
The financial deregulations of the early 1980s allowed
house purchase lending to spiral out of control thus driving house
prices to unprecedented levels in a market in short supply, and
with them rents, which by various mechanisms reflect house price
movements and consequentially the annual cost of housing benefit.
Simultaneously, the Housing Act 1988 allowed landlords to charge
a market rent, thus allowing rents to spiral after 15 January
1989. This removed rent controls from the Rent Act 1977 scheme,
yet again inevitably increasing housing benefit and the cost to
the tax payer.
One cause of the problem was the huge house-purchase
lending "spike" from 1997 to 2007 with gross mortgage
lending rising to £363 billion leaving the total housing
debt outstanding at around 18 times the 1980 level. Upswings of
this nature are not new - they have happened several times in
recent history so one should not be surprised. This one was additionally
fuelled by new financial products reaching deep into a "market"
of sub-prime borrowers in a "get on the housing ladder at
all cost" atmosphere promoted by government. One distressing
consequence of this has been increased repossessions.
None of the rise in the price of houses or rents
is the responsibility of housing benefit claimants, but they are
being punished for the errors of successive governments by the
requirement to pay the balance of rents above arbitrary caps on
housing benefit out of means tested wages or unemployment benefits,
or be threatened with eviction and consequent misery. The Local
Housing Allowance, introduced by the last government, began this
policy of ignoring the means test when paying housing benefit;
the cap continues it. These are the deeply unjust and regressive
consequences of bad housing policies introduced by the 1979 government,
allowed to continue by the 1997 government and then blamed on
the most vulnerable members of society.
This is a result of a regressive effect in housing
finance, support and fiscal regimes. For at least three decades
buying a house has been much more heavily supported than renting
a council house or RSL. The 70% who were better off to start with,
and capable of buying and building up an asset base for their
children, have received more help from public finances that the
30% who cannot possibly enter into purchase. This trans-generational
effect is self-evidently regressive and may help to explain the
persistence and worsening of our incidence of inequality and poverty.
It is likely that anti-poverty measures designed to reduce inequalities
are being more than outweighed by the regressive effects of housing
finance and fiscal regimes.
The financial hardships and insecurity generated
by the HB cap, and currently by the Local Housing Allowance, will
adversely affect health, children's capacity to progress at school,
family stability, labour mobility and produce other adverse outcomes
from indebtedness that will produce huge cost increases on the
NHS mental health services , policing and educational budgets.
The pain will be non-existent among those who profited from the
boom and extreme for those who did not—with inevitable effects
on public finances.
There has to be something wrong with 30 years of
housing policy which produces a huge bailout of the banks, a consequently
severe public finance deficit, a very large housing benefit bill,
five million people in overcrowded housing and five million on
local authority waiting lists, the lowest output of housing in
all sectors for 70 years—and then asks the poorest citizens
to pay rents they cannot afford.
Therefore the time has come for a careful examination
of the entire workings of the housing system by a Royal Commission
which can propose a coherent housing policy which will prevent
another financial crisis similar to the present one and protect
the poorest citizens from carrying the cost.
The examination must be on the linked grounds of
social equity and economic cost-effectiveness in the use of public
funds.
The Commission should examine the following issues
and make appropriate recommendations.
- 1. The balance of need for both home ownership
and rented accommodation.
- 2. Changes over the last three decades in
the supply/demand balance of total housing support and consideration
of what would be an optimally cost-effective balance.
- 3. Rent-setting regimes in the LA and RSL
sectors that could achieve rent rises below the rate of inflation.
- 4. The regulation of lending institutions
to ensure responsible lending and the avoidance of serious financial
crises.
- 5. The continual decline over two decades
or more in the funding of LA and RSL construction which inhibit
a rapid increase the supply of affordable rented housing including
the promotion of community land trusts. .
- 6. The amount of unused land and empty housing
and the use of land value tax in other countries to encourage
the productive use of unused properties. .
- 7. The reasons why the UK house building
industry is out-performed by that of, for example, Japan.
- 8. The combined redistributional effect of
local and national taxation regimes and housing benefit and allowance
arrangements on the various tenure groups and on households at
different points on the income scale, and their regressive or
progressive consequences.
- 9. The relationship between poor, overcrowded
and insecure housing on the educational achievement of children.
- 10. The relationship between household debt
(much of it related to housing costs) and mental illness and the
consequent cost to the health service.
- 11. The failure over a very long period to
enunciate a set of aims for housing policy and consequently the
lack of any coherent and holistic set of policies.
- 12. The effect on labour mobility, recruitment
and retention — and thus on the efficiency of the economy
— of the drastic shortage of genuinely affordable rented
housing.
Until the commission has reported and the government
decided on a policy the Local Housing Allowance and the Housing
Benefit caps should be suspended and the means test rules applied
in full.
18 August 2010
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