Changes to Housing Benefit announced in the June 2010 Budget - Work and Pensions Committee Contents


Written evidence submitted by Westminster Community Network

1. EXECUTIVE SUMMARY

1.1  This is a response on behalf of the members of Westminster Community Network, which addresses the lack of considered impact assessment and adequate consultation time in regards to the Housing Benefit Amendment Regulations (2010).

1.2  In London, the impact of people potentially moving in large numbers out from Inner London is likely to have a strong impact in neighbouring and outer London boroughs, further concentrating existing areas of deprivation.

1.3  Many people, including those with support needs and other vulnerabilities, have been advised by their local authority to accept private sector tenancies, as an alternative to social housing and several such schemes have existed precisely for this purpose, including in Westminster. We would argue that support, both financial and emotional be available for this group, where tenancies are now found to exceed caps.

1.4  The estimate that 30% of properties will still be available for housing benefit customers needs to be reassessed in relation to inner London. For properties that are two bedrooms or more, this is clearly not a reality.

1.5  The removal of the £15 excess will be a sudden and unexpected reduction in income for a large number of families. We would urge that this is considered as part of the overall revision to welfare benefits (which we understand to be outside of the scope of this consultation).

1.6  The removal of the five-bedroom rate and the capping at the four-bedroom rate of £400 for all families is likely to increase overcrowding and inadequate standards of living, particularly for children included within the household. It appears that children will be disproportionately affected by these changes and this contradicts the government's commitment to ensuring a decent standard of living for all children.

1.7  A full equality impact assessment (EIA) has not been undertaken, and attention has not been paid to the effects of these proposals on community cohesion. If a longer time period had been allowed for this consultation, it is predicted that the adverse effect on BME communities would rise in prominence. Additionally these housing benefit changes do not appear to be Compact compliant, particularly when referring to the good practice guidance around "Consultation and Policy Appraisal".

1.8  We feel that insufficient attention is given to the subsequent impact of families being forced to move to concentrated areas of lower cost housing on health, education or social care services.

1.9  We support the introduction of funding for an additional bedroom where the customer or their partner has an established need for overnight care.

1.10  We question whether Discretionary Housing Payments will be sufficient to cover the gap created by the proposals. We would like to see a review of these values (£10 million for the first year and £40 million thereafter) once an indicative level of need has been established.

2. FACTUAL INFORMATION

2.1  The time period allowed for contributions to this consultation is not adequate for a fully considered response. The six week period from 27 July to 6 September 2010 is only half of the recommended consultation period, and it does not allow time for data gathering or full consultation with the community.

2.2  It is felt that the immediate effect of the proposals, particularly the caps for properties with two bedrooms or more, will have a severe impact on families living in Westminster and neighbouring areas. Additionally, the broader implications on community cohesion, education, health and homelessness of these proposals has not been effectively researched, with the effects undoubtedly being felt in outer London boroughs as people will be compelled to move into areas with lower cost housing, thereby increasing levels of deprivation in boroughs such as Brent, Hounslow and Newham.

2.3  We acknowledge that in Central London some rents are excessively high and that this has contributed to the escalation of expenditure under Local Housing Allowance (LHA) Rates in Central London areas including Westminster. However, we would argue that this is not the fault of tenants but the LHA system which was introduced nationwide in April 2008. In Westminster, as in all London boroughs, people have increasingly been encouraged to accept private sector tenancies as an alternative to waiting for Social Housing, of which there is not enough to meet demand. With rents largely met through Housing Benefit LHA, this solution has been viewed as a 'panacea' to the housing crisis. However under the new proposed caps, tenants, including vulnerable people with mental health problems and homeless families, who have been advised that this is their best option, may find themselves in rent arrears and facing eviction within a matter of months.

As an example, in Westminster City Council's Housing Needs Delivery Plan 2010-11 one of the functions/activities is to reduce numbers in temporary accommodation. One performance measure is "500 cases of homelessness to be prevented or relieved". The planned action is "active casework—350 private sector solutions (firstlets, qualifying offers, homefinders grants)". Taking the lead on this is the housing options service and key partners are Orchard and Shipman and Capita (housing benefit). One of the identified risks is "changes to DWP and LHA puts use of private sector at risk".

No alternatives have been suggested for relieving the pressure on homelessness services, and therefore we must assume that numbers in temporary accommodation (which have been reduced largely because of the increased use of private sector tenancies to meet the Government target of reducing temporary accommodation by 50% by the end of 2010) and those in need of re-housing, whether accepted as having a statutory responsibility or not, will increase significantly over the next few years, putting pressure on already strained services.

We would argue that additional support should be provided to people who find themselves in this situation, whether through pressure on landlords to reduce rents or through increased housing-related support interventions plus a longer lead-in time to the introduction of the caps for these people.

2.4  Under the following proposals for capping, Local Housing Allowance levels will be restricted to the four bedroom rate, and a new upper limit will be introduced for each property size, with upper limits set at:

  1. £250 a week for a one bedroom property (£1,083 pcm).
  2. £290 a week for a two bedroom property (£1,257 pcm).
  3. £340 a week for a three bedroom property (£1,473 pcm).
  4. £400 a week for a four bedroom property or larger (£1,733 pcm).

The introduction of the caps from April 2011 will have an immediate effect from the anniversary of each new claim. However, the assumption that "reducing all rates to the 30th percentile rather than the median will bear down generally on the rental values" does not appear likely to take an immediate effect, particularly where there are other competitive forces in the rental market.

For example, currently on www.rightmove.co.uk (August 2010) there are in Westminster:

  1. two properties available for £290 or less per week for two bedrooms (one in Queens Park and one in Harrow Road);
  2. only one property available for £340 or less per week for three bedrooms; and
  3. no properties available for £400 or less per week for four or more bedrooms.

Therefore, people are likely to be compelled to move, unless a phasing-in of the process is incorporated into the plans or adequate cover is provided by the Discretionary Housing Payment.

2.5  It is understood that the proposal to remove the £15 weekly excess is predicted to generate a large amount of savings for the department. However, we would urge the committee to consider these reductions as part of the overall revisions to welfare benefits, as for a large number of families this will result in a significant and sudden drop in income, if introduced as planned from April 2011.

2.6  The removal of the five-bedroom rate and the capping at the four-bedroom rate of £400 for all families is likely to increase overcrowding and inadequate standards of living, particularly for children included within the household. There are only a limited number of properties available for rent at this price within greater London, and it is almost impossible to find any property for this rental value within the Central London area. The knock-on effect for families in terms of the Every Child Matters outcomes (be healthy; stay safe; enjoy and achieve; make a positive contribution; and achieve economic well-being) are likely to be significant if people are forced to move, as established support networks will be broken, schools and health services will need to be changed and travel times will be significantly increased for school and work.

2.7  The negative effect on community cohesion could be immense, as people on low incomes who receive housing benefit moving to properties within the new capped rates could further increase pockets of deprivation within London and the surrounding areas, with the likelihood of being forced to accept accommodation of low quality in the largely unregulated private sector.

Within this situation a number of additional issues can arise relating to health, attainment and social inclusion, such as moving away from established kinship networks or faith/community groups, many of whom will have language connections. Additionally these housing benefit caps could decrease the numbers of mixed and balanced communities in central London. Research carried out by the Joseph Rowntree Foundation (2006) has indicated that mixed communities, with different incomes and tenure, are successful in leading to less worklessness and fewer social problems.

2.8  We feel that insufficient attention is given to the subsequent impact of families being forced to move to concentrated areas of lower cost housing on health, education or social care services. This would have to be taken into account by local authorities and the NHS as part of a broader impact assessment relating to these proposals.

2.9  We support the introduction of funding for an additional bedroom where the customer or their partner has an established need for overnight care.

2.10  We support the increase in Discretionary Housing Payments for local authorities, but question whether the allocated amounts are sufficient to cover the gap created by the proposals. Recent research indicates that over 90% of households currently living in Westminster in receipt of housing benefits have rents above the proposed housing benefit cap. We would like to see a review of these values (ie. £10 million for the first year and £40 million thereafter) once an indicative level of need has been established.

2.11  If Housing Benefit is capped at the proposed levels, the likelihood is that there will be an increase in rent arrears and an increase in evictions through the county court—under the conditions of an assured shorthold tenancy (AST), an automatic possession order is granted for two months of arrears. This will lead in turn to more homeless families, which will have an impact on council resources if they were to make a homeless application and require temporary accommodation.

3.  A WESTMINSTER CASE STUDY

3.1  The caseload of the housing advisors at the Cardinal Hume Centre indicate that overcrowding is on the increase. This is due to a lack of larger suitable properties both in the social and private housing sectors that are affordable. Many families are on waiting lists with little hope of moving to larger properties. As discussed above in paragraph 3.6, the danger is that overcrowding might increase if people are unable to move or afford alternative accommodation. Many families that visit the Cardinal Hume Centre have strong centres of interest in Westminster such as schools, medical facilities and social networks which will be totally disrupted if they are forced to move to outer London boroughs.

The Cardinal Hume Centre is also approached by families who are working on low incomes and in receipt of housing benefit, who are finding themselves in rent arrears. There is a danger that these arrears will increase should their housing benefit entitlement decrease; clearly increased rent arrears could ultimately lead to evictions taking place.

4. RECOMMENDATIONS

4.1  We suggest that a thorough equality impact assessment needs to be conducted, taking into account all of the protected groups as it is likely that the proposed changes will have a particularly adverse impact on women, lone parents, BME communities and families, particularly children. This will have long term impacts on social mobility and further marginalise vulnerable communities

4.2  We believe that there is a need for separate proposals addressing the particular issues faced in London.

4.3  We would like to see transitional arrangements put in place, with particular consideration being given to existing claimants, particularly those who have been advised by their local authority to accept a private sector tenancy as an alternative to social housing.

4.4  We believe that the estimate that "a third" of rentable properties will be available to housing benefit customers is unrealistic in relation to inner London. The crisis will be particularly acute as family size increases.

4.5  We believe that there should be pressure on landlords to reduce rents, particularly those who are used by local authorities to provide temporary accommodation.

4.6  We suggest steps need to be taken to address why rents in inner London are so high. Rent control was removed under the Housing Act 1988, which means landlords can charge whatever the market rent happens to be. A legislative change could be enacted to impose some kind of rent control to stop private rents being out of reach for so many groups of people.

3 September 2010


 
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