Written evidence submitted by Catch22
INTRODUCTION
Catch22 welcomes this important inquiry from the
Work and Pensions Select Committee. Catch22 is concerned about
the changes which were made to Housing Benefit in the recent Emergency
Budget and how this will affect young people and their families.
This briefing covers Catch22 concerns about the budget's impact
on young people and their families.
The key changes of concern to Catch22 are:
- From October 2011, Local Housing Allowance rates
will be set at the 30th percentile of local rents (instead of
the 50th percentile).
- Housing Benefit awards will be reduced to 90%
of the initial award after 12 months for claimants receiving Jobseeker's
Allowance. This will be introduced in April 2013.
- From April 2011, Local Housing Allowance Rates
will be capped at £250 per week for a one bedroom property,
£290 per week for a two bedroom property, £340 per week
for a three bedroom property and £400 per week for four bedrooms
or more.
Young people and their families rely on affordable,
safe and secure housing. Recent research by Catch22 shows that
almost two thirds of young people cite providing affordable housing
as among their top three priorities for public spending. Measures
to cap housing benefit, particularly in the case of larger properties,
to reduce the amount of housing benefit which is paid, and to
limit the length of time housing benefit will be paid for those
who are able to work, will therefore have far reaching impacts
for families and for young people struggling with adult life.
KEY POINTS
- Catch22 believes that the Housing Benefit proposals
in the Emergency Budget threaten the strength and resilience of
families, which is a key cornerstone of the Big Society, and as
such jeopardize the success of this vision.
- Given the extremely high levels of youth unemployment,
Catch22 would like to see safeguards in place to ensure that young
people who have been actively looking for work during a 12month
period on Jobseekers Allowance will not be penalised by reductions
in their housing benefit if they have not been successful in their
job search.
- Catch22 would also like to see recognition within
the system of where a young person has taken steps to improve
their employability during this period through positive activities
such as volunteering, education and training.
- Catch22 is very concerned that there is no transition
phase in place for any of these changes, but particularly those
taking effect soonest. We would like to see a transition phase
introduced, to ensure that families and young people are not suddenly
faced with a shortfall in rent.
- Catch22 believes that shortfalls in rent will
leave families and young people falling into debt and rent arrears
— leading to homelessness, poor credit ratings, and potentially
criminal activity or "cash in hand" work in order to
try and meet the shortfall.
INCENTIVES TO
WORK AND
ACCESS TO
LOW PAID
WORK
Catch22 is concerned that the planned reduction in
housing benefit by 10%, from April 2013, for those who have been
claiming Job Seekers Allowance after 12 months will harm those
young people who have been unable to find work.
Although this policy aims to encourage people in
receipt of Job Seekers Allowance to find work, in actual fact
this could hinder job prospects if the young person is burdened
with more worries about how to pay rent or how to find new accommodation,
taking their attention away from finding work.
This is particularly relevant for young people, for
whom the unemployment rate is currently double that for the general
population. In the current economic climate, jobs are hard to
come by and punishing job seekers by reducing housing benefit
seems counter-productive. For some young people, not having a
job may simply be because there are no jobs to be had, rather
than because they have not made the effort to find work.
Young people who are penalised in this way will find
that they either have to make up the shortfall from their already
insufficient benefit levels or will be forced to move out —
possibly interrupting any job-seeking as they might have to start
afresh in a new location. Furthermore, areas of low housing cost
are often areas where there is little work, further stifling young
people's aspiration and ability to move into work.
Catch22 would like to see safeguards in place
to ensure that young people who have been actively looking for
work during this 12 month period will not be penalised if they
have not been successful in their job search.
Catch22 would also like to see recognition within
the system of where a young person has taken steps to improve
their employability during this period through positive activities
such as volunteering, education and training.
Catch22 would like a guarantee of support for
young people to try and find employment as part of their Housing
Benefit award, on top of that already provided by JobCentre Plus
or Connexions.
Finally, we are seeking clarification of whether,
once a young person has found a job, their housing benefit award
will revert to the full 100 per cent award.
SHORTFALLS IN
RENT, LEVELS
OF EVICTIONS
AND THE
IMPACT ON
HOMELESSNESS SERVICES
The measures announced in the budget will mean that
some families and young people will find that their housing benefit
no longer meets the cost of their rent. As such, they will need
to find the money from their other benefits to meet this shortfall,
leaving less money for food and other essential items. There is
a concern that young people trying to meet a shortfall will be
more likely to try and find ways to make money outside of formal
mechanisms, such as taking cash-in-hand work, or turning to crime.
There is also a possibility that they might turn to loan-sharks
to borrow money at unaffordable rates of interest, with the subsequent
risks that can bring such as being asked to do criminal activity
when they can't service the debt.
We are extremely concerned that some young people
will find themselves falling into significant levels of arrears,
possibly leading to eviction, poor credit ratings, and being declared
"intentionally homeless" and therefore ineligible for
housing support from the Local Authority. It is likely that some
young people will find themselves homeless as a result, perhaps
staying with friends - "sofa surfing" — or in
unsuitable housing.
Some young people may find that they will need to
move house as they cannot meet the shortfall. This may force them
to change jobs or education/training course if they need to move,
or might have a wider detrimental impact on young people's wellbeing
if they are forced to move away from their friends and wider familial
support networks.
For families who are trying to meet a shortfall,
they may be forced to ask a young member of the household to leave
education or training in order to start work to help pay the rent.
This could deny young people the opportunity to continue their
education and secure good jobs in the future which would help
break cycle of deprivation and poor education achievement in some
families. This in turn could lead to dependency, if young people
are unable to take opportunities or have very little freedom or
choice.
Catch22 believes that these proposals threaten the
strength and resilience of families, which is a key cornerstone
of the Big Society, and as such jeopardize the success of this
vision.
There are currently no plans to have a transition
phase which would see housing benefits cut gradually. As such,
Catch22 is concerned that families and young people will be suddenly
plunged into uncertainty and difficulty which could generate problems
for young people and exacerbate problems for those already struggling.
Catch22 would like to see a transition phase introduced,
to ensure that families and young people are not suddenly faced
with a shortfall in rent.
Catch22 also recommends that where a young person
has become homeless as a result of shortfalls in rent due to these
changes, the Local Authority should have a duty to support them
and should be unable to consider them to be "Intentionally
Homeless".
CASE STUDY
— SHORTFALL IN
RENT
Rachel and Dan* co-habit and have six children between
them. They live in private rented accommodation in the Ashford
area of Kent. They moved in together as a family in June 2009.
At this point their rent was £995 for a 4 bedroom property.
They were in receipt of full housing benefit which in this case
meant all rent was paid.
In June of this year their housing benefit was reduced
to £897, giving a shortfall of £98. The new cap will
reduce their housing benefit further, to £400, giving a shortfall
of £495 a month.
Dan is on JSA as a family they do receive child tax
credits and child benefit. Dan has attended various training courses
through job seekers and wants to work but has not been able to
secure work. The impact of the decision to reduce housing benefit
by 10% after a year on JSA may impact upon the family.
The current shortfall of rent of £98 per month
already affects the whole family as they need to reduce expenditure
elsewhere to cover housing costs. The family also have undisclosed
levels of debt and are struggling to keep up with repayments.
As a family they do not wish to move away from their
current area as the children are settled into schools and nurseries.
As a family they are settled in their current home and feel any
moves to encourage them to move away from an area, where they
have support systems and feel part of the community, to take up
employment would be wrong.
* names have been changed
COMMUNITY COHESION
Where young people and families are forced to move
home as a result of being unable to continue to afford where they
are living, this may break up established communities and support
networks. Young people may find themselves in new areas where
they have no connections or community ties.
Equally concerning, areas which have low cost housing
may find themselves with an influx of new tenants, possibly leading
to rising tensions within and between communities.
LARGE FAMILIES
AND OVERCROWDING
Catch22 is concerned that the budget changes will
lead to overcrowding as families find that they can't afford a
property which is large enough for their family. Research shows
that overcrowding is been associated with a number of negative
outcomes for families and young people including exacerbating
conflict in the home, risking the mental and physical health of
family members, and negatively affecting educational outcomes
as younger family members have no where quiet to study. This may
have a subsequent knock-on impact on social services, leading
to more families requiring support.
These measures may break up families where there
may be pressure from parents for older siblings — particularly
young people over the age of 16 — to move out of the family
home to reduce the overcrowding. This may also lead to more homeless
16 and 17 year olds. With the G vs Southwark ruling, this will
not only mean that local authorities will have duties to house
these young people if they cannot return to the family home, but
in most cases they would become looked after children. There is
already a shortage of placements for young people in care and
in terms of costs, if young people are looked after this places
a duty on local authorities to support them financially at least
until 18 years old and to continue to provide them with assistance
up until 21. This could have a great impact on already stretched
children's services budgets.
Catch22 is concerned about potential impact of these
changes on breaking families up or keeping them apart. Parents
may decide it is more financially viable for them to live in two
separate properties with a few children each in order to avoid
the shortfall caused by the cap on large properties. The changes
may also prevent new families from coming together, where the
new, larger family requires a larger property which is unaffordable.
This seems to be contrary to the government's desire to enable
families to come together by reducing the "couple penalty"
from the tax credit system.
Catch22 are particularly concerned that the impact
on larger families will disproportionately affect Black and Minority
Ethnic families who traditionally have large families[23].
OTHER CONCERNS
Social Mobility
Some areas of the country with high housing costs
will become entirely inaccessible to those receiving housing benefit,
such as inner London. This has the potential to reduce the social
mobility of some young people, denying them access to prospects
and opportunities. Research has demonstrated that socially disadvantaged
families are unlikely to travel outside of their immediate area
and this will lead to young people having their horizons further
reduced, as there will be some places they will simply never go
— further demarcating the line between the "haves"
and the "have-nots". It is likely that some areas of
low housing cost will become communities where there is significant
multiple deprivations.
Discretionary Housing Payments
The budget announcements included the provision to
increase Discretionary Housing Payments, which can be paid to
help tenants meet shortfalls in their rent. It is likely that
many people will need to draw on this discretionary sum.
Catch22 would like to see this scheme much more widely
advertised as many young people are likely to unaware that this
exists.
Single Room Rent
The emergency budget made no mention of the Single
Room Rent—the rent restriction which applies to under-25s.
We are concerned that young people will find their single room
rent allowance dropped further.
Catch22 would like clarification on how the changes
announced in the emergency budget will affect the Single Room
Rent.
Impact Assessment
Catch22 is significantly concerned about the impact
that these changes will have on young people, and urge the government
to ensure that the Impact Assessment of these changes looks at
the impact on young people as a specific group
2 September 2010
23 Housing Corporation, 2008. Understanding Demographic,
spatial and economic impacts on future affordable housing demand;
Paper Seven - BME Housing needs and aspirations.
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