Written evidence submitted by London Borough
of Camden
1. KEY POINTS
AND RECOMMENDATIONS
1.1 The London Borough of Camden recognises the
need to control Housing Benefit expenditure but does not support
the proposals announced in the June Budget. It is our view that
this proposal unfairly impacts on low income households and this
would mean that the most vulnerable members of our borough, who
need the support and assistance of their network in this difficult
financial climate, would be required to move to a new area. In
our opinion this expectation is unreasonable and would mean that
this income group would disproportionately shoulder the burden.
They would have to move away from their jobs, their children would
be taken out of school, from their friends, relatives and their
professional network. We do not believe that local residents should
be priced out of Camden communities.
1.2 Camden is a forward thinking Local Authority,
and we want to work with government to ensure that changes to
the Housing Benefit system aimed at reducing costs are fair to
local people; practicable and achievable; and help to support
and strengthen local communities.
1.3 As an alternative to the current reform proposals
we would suggest the introduction of Local Housing Allowance rates
for central London which reflect the traditionally higher rents
in the market without allowing for excessive profit. These could
be set at the 30th or 40th percentile of rents charged.
1.4 Local Housing Allowance caps should not affect
only those living in "expensive properties" in London.
Caps should limit access to homes with high rents relative to
local markets across the UK.
1.5 The Council would also support the reintroduction
of Benefit Officer discretion to restrict benefit payments on
rents that are considered unreasonable. This would allow local
authorities greater flexibility to work with local landlords to
negotiate rents downwards and end any remaining perverse cases.
1.6 We welcome the proposed increase in the Discretionary
Housing Payments budget and support proposals that a significant
share be directed to London to prevent families going through
the upheaval and distress of eviction and the resultant social
problems caused to the local communities, in order to assist families
to make the transition to new homes. However, Discretionary Housing
Payments can only provide a temporary solution and the proposed
fund will be insufficient to help the great number of low income
families with children and vulnerable adults who will see their
Housing Benefit reduced as a result of these changes.
1.7 It is essential that the lack of affordable
housing in the London is addressed and we would ask the government
to consider re-introducing rent regulation.
1.8 We ask the Committee to consider introducing
transitional protection for existing claimants to help bridge
the cap between the current Local Housing allowance rates and
any new ones.
1.9 One of the most effective ways of reducing
the Housing Benefit bill is to reduce the number of households
reliant on benefits and we support measures to incentivise and
support people into work and into higher paid work.
2. INTRODUCTION
2.1 The London Borough of Camden welcomes the
opportunity to respond to the Committee's request for evidence
to its inquiry into the impact of the changes to Housing Benefit
announced in the June 2010 Budget. This response is based on modelling
the impact of the changes on existing claimants in the borough
and on comments from members of the voluntary and community sector
who were invited to a meeting in Camden Town Hall on Thursday
19 August 2010 to discuss the impact of capping Housing Benefit.
2.2 Camden is a borough with a large private
rented sector. We value the sector, regarding it as capable of
providing a high quality, flexible and sustainable housing supply
for a diverse range of low to high income households.
2.3 Access to private rented homes is critical
to the Council if we are to prevent homelessness, make best use
of supported housing for vulnerable adults, and provide temporary
accommodation to homeless people. The Council has achieved considerable
success in reducing statutory homelessness in recent years largely
because of its success in helping low income households access
and retain settled private sector housing.
2.4 High rents in London are not a new phenomenon
and are driven by the housing shortage: when the Local Housing
Allowance was introduced in 2006-07 the average rent charged for
three bedroom properties in central London was circa £700
per week, twice the level of the proposed benefit cap.
2.5 The introduction of Local Housing Allowance
has seen a significant increase in benefit expenditure on housing
in London The lack of affordable alternatives in London has meant
that claimants have not been able to "shop-around",
a key principle behind the introduction of Local Housing Allowance.
2.6 Claimants have been encouraged to check their
Local Housing Allowance rate when searching for accommodation
to ensure that it will be covered by Housing Benefit and have
signed tenancy agreements on that basis.
3. EVIDENCE
3.1 There are two broad market rental areas covering
Camden, the Central BRMA (south Camden) and the inner North BRMA
(north Camden).
3.2 There are currently 3,135 Local Housing Allowance
recipients in Camden and the proposed changes will affect 2,241
claimants currently living in private rented homes:
- 814 of the affected claimants have children.
- 163 of the affected claimants are over 60.
- 121 of the affected claimants have a recognised
disability of some form.
- 354 of the affected claimants are working.
3.3 Workers in the voluntary and community sector
have stressed how important stable accommodation and local support
networks are to vulnerable people. They have expressed concern
about the damage to their clients' health and general well being
well if they are forced to move from their homes.
3.4 We are concerned about the impact on families
with children and the need to ensure they can continue their education
without disruption. If families are forced to move, children may
not be able to commute to their current school in Camden and find
that they have to wait for a place in the new Borough, this will
mean that the parents will need to make arrangements for their
care during this period, which will further impact on the families'
budget.
3.5 Equally, older people and those with disabilities
rely heavily on formal and informal links in their local communities,
not least with their GPs, health care practitioners, carers and
support groups.
3.6 Many of the working claimants are carrying
out vital but traditionally low paid jobs in the borough, such
as in schools and local small businesses. They play a vital role
in the economic recovery of the borough but may not be able to
afford to commute if forced to move.
3.7 The reduction in weekly Housing Benefit range
from pennies to £1,115 per week. The average loss after the
application of the caps and the move to the 30th percentile is
£48.21per week (the median loss is £35.00 per week)
3.8 Whilst it is possible that rents will adjust
downwards at the lower end of the market neither working nor non
working claimants will be able secure or retain private rented
homes in the south Camden.
3.9 The proposed changes will mean that Camden
will effectively become an "exclusion zone" for people
on low income seeking to rent. Many claimants, already living
in the borough, especially in the south of the borough and in
larger properties, will need to seek cheaper accommodation outside
of Camden.
3.10 We estimate that Housing Benefit expenditure
will reduce by nearly £6million per annum in Camden but costs
borne by Camden and other boroughs will increase. In addition
to increased calls on the Discretionary Housing payment fund to
help maintain vulnerable households in their current homes, the
move to exclude low income households from renting privately in
Camden will increase already significant pressure on homelessness
prevention resources, the number of households presenting as homeless
and needing temporary accommodation, the demand for local social
housing and the costs of health and social care provision.
3.11 The proposed changes will disproportionately
impact on larger households (many of whom are from Black or Minority
Ethnic households) and children living in poverty. 59% of children
living in privately rented accommodation in London are living
in poverty. Children who move schools frequently are more likely
to be socially and economically deprived and experience the specific
circumstances associated with under-achievement.
3 September 2010
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