Written evidence submitted by Citizens
Advice Bureau
SUMMARY
- Citizens Advice is extremely concerned at the
impact of the cuts to housing benefit (HB) on people's ability
to pay their rents and avoid rent arrears and homelessness. We
consider it highly regrettable that the housing implications of
these cuts do not appear to have been given any consideration
in advance of decisions being made.
- Bureaux are already reporting that their local
authorities are very concerned at the implications for their homelessness
functions, at a time when their budgets will be facing sharp cuts.
It will be crucial that local authorities' homelessness prevention
funds are expanded by redirecting savings made from the HB cuts.
- Cutting entitlement to HB to this extent is not
an effective way of improving work incentives. For claimants in
work, a forced move may add to their travel to work and child
care costs. Unemployed claimants forced to move from high rent
areas such as central London to areas where rents are lower, may
find it more difficult to find work because of higher unemployment
rates.
- Citizens Advice is particularly concerned at
the proposal to cut entitlement to HB by 10% after a claimant
has been in receipt of JSA for over a year, especially in circumstances
where the claimant has fully complied with requirements to actively
seek work. This cut will fall hardest on vulnerable claimants
who already face disadvantage in the labour market, for example
people with mental health problems or who have a disability.
- CAB evidence demonstrates the hardship which
claimants already face as a result of shortfalls between their
LHA and their rent. This will be exacerbated in future when basic
benefit levels are reduced as a result of uprating in line with
CPI rather than RPI. We anticipate that the increased shortfalls
will result in higher levels of poverty, indebtedness, rent arrears
and homelessness.
- Shortfalls are particularly problematic for single
claimants aged under 25 who are subject to the shared room rate
(SRR) restriction, and we believe there is a strong case
for continuing to set the SRR at the median rather than the 30th
percentile.
- Use of the CPI will depress LHA rates over time,
as rent inflation is traditionally higher than the CPI. As a result,
LHA rates may fall below the 30th percentile unless regulations
provide for regular corrections to be made.
- We regret that no assessment has been made of
the likely impact of cuts on rent levels and landlords' willingness
to let to claimants. CAB evidence does not suggest that landlords
will reduce their rents when LHA rates fall.
- We are particularly concerned at the impact of
the maximum cap on housing and homelessness in London, where housing
pressures are already extreme. We believe there is a strong case
for easing the transition to the proposed cap, such as by applying
it only to new claims from April 2011.
INTRODUCTION
1. Citizens Advice welcomes the opportunity to respond
to this timely enquiry into the impact of the changes to HB announced
in the Budget. We are extremely concerned at the potential impact
of the cuts to HB on people's ability to pay their rents and avoid
rent arrears and homelessness.
2. Housing and housing benefit related problems are
some of the most common enquiries brought to Citizens Advice Bureaux.
During 2009-10 bureaux dealt with over 222,000 enquiries relating
to HB and it clear from this advice work that HB plays a crucial
role in enabling people on low income to sustain their housing.
3. In our view, the proposed cuts demonstrate the
fundamental and longstanding fault line between housing benefit
and housing policy. As a result, the DWP's case for the cuts is
made in relation to the need to reduce benefit expenditure and
welfare dependency and to promote work incentives, which are key
DWP priorities. The proposals do not seem however to recognise
the fact that CLG's housing and homelessness policy is increasingly
dependant on the private rented sector with its unregulated rents
to provide for low income households in housing need. This has
inevitably fuelled the housing benefit budget, as the average
weekly LHA payment of £112.89 to a private tenant is £40.44
per week (£2,310 per year) higher than the £72.45 average
HB payment to a social housing tenant. The failure of successive
Governments to fund adequate levels of social housing has led
to the current situation where housing benefit accounts for around
80% of all government spending on housing.[24]Yet
policy responsibility for that spending rests with DWP rather
than CLG.
4. As a result, the housing implications of these
cuts do not appear to have been given any consideration in advance
of decisions being made. For example, no assessment has been undertaken
of the possible impact on rent levels, on landlords' willingness
to let to claimants, or on the standard of property that will
be available within LHA rates. We therefore very much hope
that the remit of this enquiry will enable the CLG committee to
be involved, in order that the housing impact of the proposals
can be fully examined.
INCENTIVES TO
WORK AND
ACCESS TO
LOW PAID
WORK
5. We welcome the recognition by DWP Ministers that
a key disincentive to work is the rate at which HB is withdrawn
as income rises. As the White Paper 21st Century Welfare
outlines, tackling levels of marginal deduction rates is central
to improving work incentives.
6. In addition, we believe that the proposals under
consideration by the previous Government to introduce fixed period
awards for people in work, would be a very positive step in reducing
the hassle factor for people in low paid work trying to manage
their HB claim if their income is continually fluctuating. Bureaux
regularly report clients in low paid work falling into rent arrears
or facing recovery of overpayments because their HB has not kept
pace with changes in their income. We therefore very much hope
that these proposed changes will be progressed.
7. In contrast, we do not accept that cutting entitlement
to HB is an effective way of improving work incentives. It is
true that the lower the rent, the easier it is to escape
the poverty trap created by high marginal deduction rates, through
increasing income from work. However these changes are essentially
about reducing entitlement to benefit rather than reducing
rents themselves.
8. In reality, many tenants are likely to have to
move to areas with lower rents as a result of the proposed cuts.
For many, the actual process of such a forced move will be highly
disruptive and stressful as well as putting additional stranin
on very limited budgets. In the transitional period therefore,
there can be little doubt that the proposed changes will act as
a work disincentive.
9. The question then arises as to what impact a move
will have on people's ability to find and sustain work. Firstly
it is important to recognise that many private tenants claiming
HB claimants are in work. Figures from the 2007-8 Survey of English
Housing show that as many as 24% of private tenants were working.[25]
Any move which takes them further away from their place of employment
will add to their travel and child care costs. This is likely
to be a significant disincentive to work and some claimants may
even find they are no longer better off in work when the increased
costs are taken into account.
10. In contrast to the number of private tenants
who are claiming HB and in work, only 13% in the 2007-8 Survey
of English Housing were categorised as unemployed (that is actively
seeking work). For this group, a key question is whether employment
prospects are better or worse in the areas to which they have
to move. ONS Labour Market Statistics for the London area suggest
that there is a relationship between rent levels and rates of
unemployment. In the three local authorities which will be most
affected by the cap, unemployment rates are much lower ( Westminster
2.77%, Camden 3.3%, Kensington and Chelsea (3%)) than in some
of the few London boroughs which will be unaffected by the cap
and to which claimants may therefore have to move (Barking and
Dagenham 5.78%, Newham 6.44% Redbridge 4.15%). A move to an area
with affordable rents could therefore perversely increase the
risk of a claimant being hit by the 10% HB penalty for still being
unemployed after 12 months in receipt of JSA.
11. Citizens Advice is particularly concerned at
this proposal to cut entitlement to HB by 10% after a claimant
has been in receipt of JSA for over a year. Evidence is —
at best — mixed as to whether sanctions are effective in
encouraging people into work, and we can see no logic to making
such a cut from a household's HB, especially in circumstances
where the claimant has fully complied with requirements to actively
seek work. The reasons why some claimants stay on JSA for over
a year are often to do with factors beyond their control such
as the state of the local labour market or their perceived attractiveness
to employers. The recently published Labour Market Statistics
which show rates of unemployment for over a year were highest
amongst people aged 50 and over, illustrates this point.[26]
This cut seems destined to fall hardest on those who already face
disadvantage in the labour market, for example people with mental
health problems or who have a disability. We note in particular
the concern of supported housing providers such as St Mungo's
who estimate that over 90% of their residents who are in receipt
of JSA have been so for over a year. There must be a risk that
this cut would discourage providers from housing vulnerable client
groups.
12. Citizens Advice has already expressed significant
concerns about the numbers of claimants in poor health who are
failing the work capability assessment for ESA and therefore being
found fit for work.[27]
As well as being in poor health, some will have been out of the
labour market for many years because of their health condition.
They are therefore likely to face particular difficulties in finding
a job, and may well fall foul of this new one year rule. We
very much hope that the government will reconsider
and withdraw this proposed measure.
LEVELS OF
RENT
Will rents fall?
13. Ministers have suggested that a consequence of
the cuts to LHA rates could be that levels of private rents will
fall. If so, this would be very welcome. However we are concerned
that no research or assessment has been carried out on which to
base such an assumption. If rents do not fall, the full burden
of the cuts will be experienced by claimants.
14. Indeed the available evidence would suggest that
LHA rates do not drive the rental market. DWP statistics show
that there is very little bunching of rents at the LHA rates,
which would be expected to happen if this was the case. The DWP's
Impact Assessment reveals that 47% of claimants are currently
getting an excess payment because their rent is below the LHA
level, whilst on the other hand 48% of LHA claimants face shortfalls
between their LHA payment and their rent, averaging £23 per
week. This suggests that just 5% of LHA claimants have rents which
match the amount of their LHA.
15. Further evidence that rents do not follow LHA
rates is available from the way landlords have responded to recent
falls in LHA rates in some parts of the country, which have left
their tenants with unexpected shortfalls between their rent and
LHA. Bureaux have reported the problems that this has caused for
clients, as their landlords have not reduced their rents in line
with falling LHA rates, even though it is frequently argued that
landlords are keen to keep existing tenants rather than having
to re-advertise the property and risk having a void period.
A CAB in West London reported the case of a couple
with four children who have experienced a drop of £86.26
a week in their LHA since they took on the tenancy of their three
bedroom house. The landlord has not reduced the rent and the family
are unable to meet this additional cost. They have had to move
three times in three years trying to find affordable accommodation,
which has been extremely disruptive for the whole family.
A CAB in Surrey reported a 62-year-old woman whose
only income is a very small state pension and pension credit,
plus HB. She has been claiming HB for two years, but this year
it was reduced by £20 per month due to a decrease in the
LHA. She was very worried about how she would manage to make up
the shortfall as she already had to budget very carefully to meet
all her living costs. Her rent of £390 per month has not
decreased and is unlikely to; indeed it could increase when the
lease comes up for renewal at the end of the month.
16. It is likely that for most landlords, decisions
about rent levels are primarily driven by the need to cover their
mortgage costs and other outgoings, and the need to reflect the
going rate across the rental market. In many parts of the country,
demand for rented accommodation exceeds supply at the bottom end
of the market, so landlords will be able to let to other tenant
groups — such as students — if housing benefit claimants
are no longer able to afford their rent.
Local variation in rent levels
17. The significant variation in rent levels across
the country has always been a feature of the UK housing market
and indeed this has been behind the recognition of the need to
separate out housing costs from other benefit support for living
costs. Even under the existing rules, a common problem reported
by bureaux following the reduction in the number of Broad Rental
Market Areas (BRMAs) which came into effect along with the move
to the LHA, has been that it has led to much rougher justice for
claimants, because of the wide variation in rent levels in different
communities within a BRMA.
Rother CAB has raised concerns about the way the
boundaries of the Sussex East BRMA have been drawn, to include
Hastings with its relatively low rents, along with Rother District
where rents are significantly higher. The LHA rates which result
from combining these two contrasting areas mean that claimants
in Rother District face major difficulties in finding any accommodation
to rent within LHA rates.
18. This highlights a longstanding concern of Citizens
Advice and others - that the regulations do not allow Rent Officers
to have any regard to variations in rent levels when setting the
boundaries of BRMAs. As a result, communities with very different
levels of rent can find themselves in the same BRMA, thus creating
virtual "no go" areas for housing benefit claimants.
The previous Government was considering amending the regulations
to address this issue, and we believe that it is important
that such reform is progressed before the reduction to the 30th
percentile is implemented.
19. The wide variation in rent levels means that
the impact of the various cuts will not be spread evenly. Of particular
concern is the 10% cut for those on JSA over a year. Private tenants
paying market rents will suffer a much larger hit than those in
social housing where HB payments are on average over £40
lower. And within the private sector, the range of LHA rates (from
under £100 to the £290 maximum cap two bedroom property)
means that the amount that claimants would have to make up from
their JSA (for which rates are the same across the country) will
vary considerably.
20. The impact of the move to the 30th percentile
will also vary across the country. The Impact Assessment shows
that for a two bed property outside London, average losses from
this measure will vary from £1 per week in Pendle and Burnley
to £16 per week in Cambridge and Brighton. Losses in parts
of London will be much greater, with the effect compounded by
the impact of the maximum cap.
The impact of uprating LHA rates by CPI
21. We are concerned at the proposal to uprate LHA
rates in line with the Consumer Price Index (CPI), rather than
by using local Rent Officer data to ensure that the LHA continues
to reflect the movement of local rents. Over time this will break
the link between local rent levels and housing benefit, causing
problems for claimants in areas which for local reasons experience
an above average increase in rent levels.
22. More significantly, use of the CPI seems likely
to depress LHA rates over time, as rent inflation is traditionally
higher that the CPI. During the period 1991-2009 ONS data shows
that CPI averaged 2.86% pa whilst "rent only" inflation
was 5.43%. [28]
This will therefore lead to a steady shrinking in the sector of
the market which is affordable within LHA rates, and moreover
appears to be in contradiction to the proposal to set LHA rates
at the 30th percentile. In practice it would seem that uprating
by CPI will mean that LHA rates will steadily reduce below
the 30th percentile. We very much hope that the Government will
reconsider this proposal. At the very least it will be crucial
that the regulations provide for regular corrections to be made
so that LHA rates continue to reflect the reality of local rents.
SHORTFALLS
23. Shortfalls are not a new feature of the HB system
and indeed are a very common source of problems which bring people
to bureaux. As outlined above, DWP figures indicate that around
half of all LHA tenants already face shortfalls between their
benefit and their rent, averaging £23 per week.
24. Yet the DWP's Impact Assessment of just three
of the planned cuts indicates that:
- setting LHA rates at the 30th percentile will
affect 83% of LHA claimants with an average loss of an additional
£9 per week.
- the restriction to the four bedroom rate and
the application of the maximum cap will create average shortfalls
of an additional £74 per week for the 21,060 cases affected,
83% of whom live in London.
Taken together with the removal of the £15 excess,
DWP estimates that every LHA claimant will lose benefit, averaging
£12 per week.
25. CAB evidence repeatedly demonstrates the hardship
which claimants face when they have to try and make up shortfalls
between their LHA and their rent — often from other benefit
income. This will become even harder in future when basic benefit
levels are reduced as a result of uprating in line with CPI rather
than RPI — a measure which is projected to save £5.8
billion by 2014-15. We know from CAB evidence that tenants place
a high premium on paying their rent, and it is likely that the
initial effect will be cuts in other parts of their budgets such
as food and fuel, along with an increased level of indebtedness
as other bills don't get paid. The discretionary housing payment
budget — although tripled in size — cannot possibly
fill the gap, and rent arrears and homelessness will inevitably
follow. Moving home — particularly to smaller accommodation
in a less desirable area- is often seen as very much a last resort,
because of the cost of moving and the disruption to family life,
especially where children are settled in local schools. For larger
families, an option may be overcrowding in smaller accommodation,
with its inevitable impact on health and family relationships.
26. Bureaux report that shortfalls are particularly
problematic for single claimants aged under 25 who are subject
to the shared (formerly single) room rate (SRR) restriction. Shortfalls
have always been particularly common for this group — DWP
commissioned research published in 2005 found that 87% of all
SRR claimants faced a shortfall, averaging £35.14 per week.[29]
Although the definition of the single room rate was slightly broadened
with the introduction of the LHA, CAB evidence does not suggest
that this has had much impact in easing the extent of these shortfalls.
We understand that the adequacy of the SRR is an issue which DWP
is examining as part of their review of LHA, but regrettably information
on this is not yet available.
27. Under 25s also face greater challenges than older
claimants in making up shortfalls because of the lower rate of
their JSA (£51.85 cf £65.45 for those aged 25 and over).
In many parts of the country, property matching the SRR definition
simply does not exist, but one bedroom properties are completely
unaffordable, leaving young people at high risk of homelessness.
A CAB in Rutland reported a 22 year old woman who
moved to the area as she secured employment. She lodged with a
friend for four months but the friend has now asked her to leave.
She found a flat but was unable to afford it because her LHA would
be restricted to the SRR. However there is very little shared
accommodation in county.
A CAB in the North East reported a 23 year old client
and father of two children who was homeless as a result of relationship
breakdown. He was in receipt of JSA so only entitled to the SRR
of £49.86. He had been unable to find any accommodation available
at that rent and so had been "sofa surfing" at various
friends/relatives. His relationship with his children was suffering
as he did not have a home for them to stay over with him.
28. We are pleased to see that the shared room rate
has been exempted from the maximum cap. Given the acknowledged
shortage of shared room accommodation and the higher levels of
shortfall faced by under 25s who are limited to this rate, we
believe there is a strong case for continuing to set the SRR at
the median rather than the 30th percentile.
EVICTIONS/HOMELESSNESS
29. No assessment has yet been made by DWP of the
impact of plans to raise the level of non dependant deductions,
to uprate LHA by CPI, to restrict HB where social tenants are
under occupying and to reduce HB by 10% where claimants have been
on JSA for over a year. However just from the size of the shortfalls
resulting from the implementation of a maximum cap and the 30th
percentile detailed in the Impact Assessment, it is clear that
many claimants will be unable to make up the difference, and will
have to move. If they are unable to find alternative accommodation
at rents within LHA rates, they will be at risk of homelessness.
30. Even at current LHA rates, CAB clients frequently
report that it is virtually impossible to find a landlord prepared
to rent to them if they are in receipt of HB. This is backed up
by a CAB survey of 424 letting agents carried out in 2009 which
found that only 12% would let to claimants without imposing additional
requirements such as a guarantor or six months rent in advance.[30]
31. It seems inevitable therefore that there will
be increased pressure on local authority homelessness departments
as a direct result of these cuts. Over recent years, because of
the failure of successive governments to fund adequate levels
of affordable social housing, local authorities have been increasingly
relying on the private rented sector to prevent homelessness.
Indeed CLG homelessness prevention statistics for England show
that in 2009-10, 50% of the cases assisted to obtain alternative
accommodation were through the private rented sector. [31]
However, falls in LHA rates will reduce the opportunities to do
this in future, whilst at the same time these cuts will increase
demand on homelessness departments. Bureaux are already reporting
that their local authorities are extremely concerned at the financial
implications for their homelessness functions, at a time when
their budgets will be facing sharp cuts. It will be crucial
that local authorities' homelessness prevention funds are not
only protected in the forthcoming comprehensive spending review,
but indeed expanded by redirecting savings made from the HB cuts.
32. We are particularly concerned at the impact of
the maximum cap on housing and homelessness in London, where housing
pressures are already extreme. The Impact Assessment indicates
that 17,410 households in London will be affected by the cap and
the restriction to the 4 bed rate, with average shortfalls of
£81 per week. Thousands of low income families living in
London will therefore have to move home over the year from April
2011, yet no assessment has been made as to whether there is empty
and affordable accommodation on the necessary scale for them to
move to, nor of the logistics which will be required in order
to manage such a significant shift in population over a limited
time period.
33. To make matters worse, the speed with which the
cap is being implemented (from April 2011) means that there will
be less than six months between the regulations being laid and
the first claimants being affected. It will not therefore be possible
to get the message out in time to avoid some prospective tenants
signing up for a new tenancy with an initial six month (or longer)
fixed term, at a rent which is currently within LHA rates but
which will become completely unaffordable when their LHA is reviewed
after next April.
34. We believe there is a strong case for easing
the transition to the proposed cap, such as applying it only to
new claims from April 2011. This would ensure that existing
tenants - who may have entered into fixed term agreements with
their landlords in the belief that the rent was affordable within
LHA rates — can be given longer notice of the introduction
of the cap. This would provide them with greater scope to avoid
homelessness by managing their moves to lower cost accommodation.
It will also be important that regulations provide for the caps
to be uprated annually in line with rental inflation to ensure
that households are not further restricted in their choice and
access to accommodation as rents increase.
35. Evictions and homelessness may also result from
the decision to rapidly increase levels of non dependant deductions
(NDDs) to bring them up to the level they would have been had
they been fully uprated since 2001. CAB evidence shows that even
at the current level where the maximum rate is £47.75 per
week, NDDs are a common source of rent arrears, as well as causing
family tension when rent arrears arise as a result of the non
dependant failing to make the assumed contribution towards the
rent. The result is often than the non dependant leaves or is
evicted from the household. In some cases this will result in
homelessness, in others the non dependant will rent their own
place and make a separate claim for HB, thus adding to the overall
HB budget spend.
36. The DWP has not provided figures on the levels
of NDDs that will result from this measure, but there must be
a concern that, particularly in areas where rents are lower, the
size of the NDD will appear out of all proportion to the level
of the rent. This is likely to be perceived as very unfair and
will therefore exacerbate non payment by the non dependant. If
NDDs are to be increased we consider that it is important that
a mechanism is built into the formula to ensure that they are
proportionate to the actual rent. In addition, clear information
needs to be provided for non dependants, about the contribution
which the HB scheme assumes they will make towards the rent.
LANDLORD CONFIDENCE
37. As outlined above, bureaux already report widespread
reluctance by landlords to let to claimants, especially in areas
where there are other prospective tenants such as students or
those in low paid work. The shift under LHA to make the default
payment of benefit to the tenant rather than direct to the landlord
has undermined landlord confidence still further. We fear that
these cuts will act as a further disincentive to landlords to
let to HB claimants.
38. Even if the rent is within LHA levels at the
time the letting is made, the landlord will have reason to fear
that in future the tenant may be unable to afford the rent, either
because they are subjected to the 10% JSA related penalty, or
because the consequence of linking LHA rates to CPI will mean
that over time LHA rates will fail to keep pace with the local
rental market.
39. One measure which could help improve landlord
confidence would be if local authorities were to engage in larger
scale private sector leasing arrangements to help meet the needs
of low income households seeking affordable accommodation. Local
authorities would be better placed than individual claimants to
negotiate lower rent levels, within LHA rates, and landlords might
be persuaded to accept lower rent levels in return for greater
certainty over their rental income stream and void levels.
40. We are aware that a similar scheme has been developed
in the Republic of Ireland with some success. As a result of concern
over the rising levels of benefit expenditure, the Irish Government
has introduced the Rental Accommodation Scheme. Under this scheme,
local authorities assume responsibility for procuring accommodation
for most housing benefit claimants of over 18 months duration.
Such claimants are either rehoused in social housing or, where
this is not possible, in private sector accommodation which is
leased long term by local authorities, which are able to use their
greater market power to attempt to secure lower rents. [32]
COMMUNITY COHESION
41. We are very concerned at the impact that these
measures will have on local communities if large numbers of households
are forced to move from more expensive areas to those where rents
are lower. The effect is likely to be particularly acute in London
as a result of the application of the maximum weekly caps which
will be applied from April 2011. According to the Impact Assessment,
the cap will affect 17,410 claimant households in London on the
anniversary of their claim, with average losses of £81 per
week. In central London, only 7% of accommodation will fall within
the LHA rate once the cap is applied, and it is therefore clear
that many households will have to move away from their existing
communities to those parts of outer London which are relatively
unaffected by the cap. This will result in significant disruption
to family life as people lose their informal support networks
of family and friends, children have to change schools and new
arrangements for access to health care and social services support
have to be made. We note that DWP plans to "explore other
impacts on schooling, health and social services."[33]
It must be of concern that decisions have been made to cut
HB in advance of such impact assessments being made.
42. A minority of London boroughs will be unaffected
by the cap and it therefore seems likely that population shifts
from central London towards these boroughs will be particularly
significant. This will threaten community cohesion in these receiving
areas as local services such as schools, hospitals and GPs come
under increased pressure. Such a population shift would also undermine
efforts to promote mixed communities, and instead run the risk
of increasing the concentration of low income households in poorer
areas.
DISABLED PEOPLE,
CARERS AND
SPECIALIST HOUSING
43. We welcome the announcement that, from April
2011, an additional bedroom will be included within the size criteria
where overnight care is provided by a non resident carer. However
we are disappointed that changes were not made to tackle the discrimination
which arises from the fact that the regulations make no provision
for circumstances where a disabled household member needs a separate
bedroom. Bureaux regularly report the distress and hardship caused
where older couples need separate bedrooms because one of them
has severe health problems. Similarly, bureaux report cases where
the financial hardship faced by a family with a disabled child
is increased because they have to make up the shortfall from renting
a property with an extra bedroom.
A North Wales bureau reported a client with three
children who was renting accommodation with four bedrooms although
LHA was only payable at the three bed rate. Her son aged nine
has special needs and she has been advised by her GP and social
worker that he cannot be left in the same bedroom as the daughteras
there has been an incident in the past. She is therefore having
to cope with the additional expense of meeting the shortfall in
benefit.
44. We are concerned that no provision has been made
to protect disabled people from any of the proposed cuts, despite
the fact that they will be likely to find it particularly difficult
to find suitable alternative accommodation and to cope with the
disruption which a move will entail, including the need to make
new arrangements for health, social services and other support
services. It will be essential that adequate financial provision
is made for local authorities to provide a personalised support
service to help disabled people cope with the stress and disruption
which a move to cheaper accommodation will entail.
OLDER PEOPLE,
LARGE FAMILIES
AND OVERCROWDING
45. We accept that older people will not be so widely
affected by the HB cuts as other groups because a lower percentage
are in receipt of LHA, and some of the measures will not affect
older people. However in a recent debate, the Minister Steve Webb
stated that some 80,000 older people were in receipt of LHA and
therefore would be affected by the cap, the move to the 30th percentile,
and the loss of the £15 excess. [34]
Older people will also be affected by the increased rate of NDDs,
which we understand will apply to council tax benefit as well
as housing benefit.
46. For those older people affected, the benefit
cuts are likely to create significant anxiety and distress. They
may be reluctant to face the upheaval of moving home and may resort
to making economies in their budget and spending down any savings
in order to meet shortfalls in their rent. If they are forced
to move, they are likely to need personalised support to help
them find decent alternative accommodation near friends, relatives
and support networks.
47. We are concerned at the decision to restrict
LHA rates to four bedrooms, when the impact of the previous decision
to limit LHA to the five bedroom rate has not yet been assessed.
Moreover the DWP's Equality Impact Assessment acknowledges that
this measure is likely to have a disproportionate impact on some
ethnic minority groups, although it is unable to establish the
scale of the impact because of limitations of the data. This
is highly unsatisfactory and we consider it is essential that
DWP prioritises the collection of additional data in order to
assess the impact before these measures come into effect.
48. The impact of the cap and the move to the 30th
percentile may encourage some families to move into smaller, overcrowded
accommodation in order to stay in the area they live in. In addition,
the restriction of LHA rates to four bedrooms means that overcrowding
is structured into the benefit rules. This will cut across policy
objectives to support family life and tackle disadvantage, by
putting additional strain on larger families, affecting children's
health, well being and future prospects, as well as putting pressure
on parents' relationships. Where a relationship breaks down, this
may result in an additional HB claim being made, thus wiping out
any benefit saving.
2 September 2010
24 See for example Wilcox S, UK housing review 2008-9,
Table 122, 2009. Back
25
CLG, Survey of English Housing 2007-8, Table S420. Back
26
ONS Labour Market Statistics, Aug 2010. Back
27
Citizens Advice, Not working: CAB evidence on the ESA work capability
assessment, March 2010. Back
28
Moreover this may be an underestimate of private sector rent inflation
as it includes all rents (i.e. RSL and LA). Back
29
Harvey J and Houston D, Research into the single room rent restrictions,
DWP 2005. Back
30
Citizens Advice, Let Down: CAB evidence on letting agents and
their charges, 2009. Back
31
CLG: Homelessness prevention and relief : England 2009-10. Back
32
Norris M and Coates D, Private sector provision of social housing:
an assessment of recent Irish experiments, Public Money and Management,
Jan 2010. Back
33
DWP, Explanatory Memorandum for SSAC, July 2010. Back
34
Hansard, HoC adjournment debate, 13 July 2010 col 225. Back
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