Written evidence submitted by St Mungo's
1. EXECUTIVE
SUMMARY
1.1 Our submission focuses principally on the
very concerning impact of the proposed measure to cut people's
housing benefit by 10% after they have been on JSA for over 12
months. However, we also remain concerned that other changes will
also increase homelessness and hardship, particularly in London,
and impair our ability to move people out of our accommodation
and into independent living.
1.2 Housing benefit should not be subject to
sanctions as a result of someone's unemployment. It is a benefit
intended to give people a roof over their heads and should only
be contingent on income and rent levels.
1.3 The 10% cut will have a significant impact
on homeless people who typically face a long journey to the labour
market. Most of our clients have been out of work for over a year,
a majority have been out of work for over five years. They also
face many barriers to employment including mental health problems,
substance use and low levels of education. It will not facilitate
a quicker journey back to the labour market but instead inhibit
it.
1.4 If the 10% cut is brought in individuals
who live with us will face a significant reduction in income.
After housing and travel costs have been deducted people will
have approximately £2.98 a day to buy food and clothes and
other necessities such as soap with, a 43% reduction from the
JSA amount currently available.
1.5 Exemptions and other measures could be used
to mitigate the impact of this measure but it will still have
a range of unintended consequences and we believe it will not
have the effect of motivating our clients back into work.
2. CONCERNS ABOUT
THE OVERALL
CUTS TO
HOUSING BENEFIT
2.1 We support the statements made by Crisis1,
Shelter2,
the National Housing Federation3
and others about the impact of the cuts to housing benefit linked
to the changes in Local Housing Allowance rates. We agree that
the proposed changes will result in relocation, hardship and homelessness
particularly for those living in London but also for many across
the rest of the country.
2.2 In particular, as providers for the single
homeless people, we are concerned about the pressure these changes
will place on existing services at a time of scare resources.
The analysis of many organisations, including London Councils4,
is that these changes will increase the number of people being
deemed statutorily homeless. As a result it seems likely there
will be pressure to allocate resources to meet authority's statutory
obligations which, we fear, will come at the expense of services
for our clients.
2.3 The unintended consequences of the changes
to the way housing benefit is calculated could be the reduction
of a vital safety net of services for some of the most vulnerable
adults in our society.
2.4 We are further concerned that the changes
could make it more difficult for us to move our clients out of
our high needs accommodation and into the private rented sector
once they are ready to move on. As a result people will be stuck
in inappropriate and more expensive accommodation, 'bed blocking'
emergency and specialist services.
Proposed cut to housing benefit for those on JSA
for over a year
3. OVERALL CONCERNS
3.1 Housing benefit is an income related benefit
intended to ensure that people can afford to live in an acceptable
standard of accommodation. While it has never been viewed as an
ideal system its purpose has always been clear - to give people
a roof over their heads.
3.2 The proposed link to a person's out of work
status therefore represents a departure from this fundamental
concept. It also supposes that people could find work and haven't,
something that may not always be true. For those people who are
not able to find work this cut to their income will be devastating.
3.3 For those who are already only just living
within their means this cut will mean that they are unable to
afford to continue to live where they are and they will be forced
to relocate or to live in overcrowded or inappropriate housing.
For those living in London and in other parts of the country where
the cost of housing is high the choices will be even harder as
other housing benefit changes are likely to limit the available
properties in some areas dramatically.
3.4 For others, particularly those who are homeless
and living in temporary accommodation, there will be very limited
options in terms of where they can move to. People living in temporary
or supported accommodation like the accommodation provided by
St Mungo's will be left with some stark choices:
- (1) Get into debt.
- (2) Work in the "informal" market
(eg cash in hand).
- (3) Work in the illegal market (eg prostitution).
- (4) Sleep on the streets.
3.5 This measure will hurt the most vulnerable
and those unable to find work for whatever reason. It is unclear
to what extent it will act as an incentive to work and as a result
it seems more likely that it will have the effect of increasing
poverty, debt and poor health among some of the poorest people
in society.
4. INAPPROPRIATE
FOR OUR
CLIENTS
4.1 We have overarching concerns about the nature
of this measure for all recipients of JSA, however, we are particularly
concerned about the impact on our clients. We work with homeless
people who face multiple barriers to employment and who's journey
back to the work place is often long involving high levels of
support.
4.2 We take an annual snap shot survey of our
all clients resident with us. It is completed by client's key
workers and gives us a reasonably accurate picture of the type
of issues our clients are facing. In our 2010 survey we found
that 26% of clients were on JSA and 24% have been on JSA for over
12 months. It is unsurprising that most clients on JSA have been
on this benefit for over a year as most of our clients have not
worked for over a year, in fact 26% had been out of work between
five and ten years and 27% for over a decade.
4.3 The survey also showed us what some of the
current support needs are for our clients on JSA and issues which
may be barriers to employment:
- 23% have a significant medical condition.
- 51% have a mental health condition (diagnosed
or suspected).
- 43% use alcohol problematically.
- 57% misuse prescribed drugs or use illicit drugs.
- Education level:
- 34% None.
- 39% CSE/GSE/GCSE.
- 8% A Level.
- 6% Degree.
In addition to this survey research carried out for
a recent report Work Matters5,
showed that many clients lack basic skills such as being able
to read and write. As a result of this work we estimate that between
35 and 40% of clients do not have literacy to the level of an
11 year old, severely impairing their chances of employment.
4.4 While the response of Government might be
that clients with this level of need should be on ESA rather than
JSA we do not believe that given the nature of the Work Capability
Assessment this is likely or possible. We believe that there are
significant flaws in the assessment process for example the failure
to properly include external medical evidence to demonstrate the
extant of an individual's mental health problem.
4.5 However, even if the assessment did operate
effectively many of our clients would still be deemed "fit
to work". Until the WCA is a more holistic assessment of
all of the factors which impact on a person's capacity to work
there will remain a group of people on JSA who need significant
support to return to work and that this process will take longer
than a year.
4.6 Case study: Chris is a former
resident of St Mungo's who has recently got back into work with
Lakeside Construction. He spent the nine months prior to getting
employment training with "Revive" St Mungo's painting
and decorating social enterprise. Throughout his time as a hostel
resident and working with St Mungo's Skills and Employment team
Chris was on JSA, although in the initial stages as a resident
he was not fit for work and was suffering from mental health issues
and the trauma of becoming homeless.
4.7 Chris's journey from entry to St Mungo's
hostel to job took 26 months, if Chris had been forced to take
a 10% reduction in his housing benefit from month 13 and make
up the difference from his housing benefit, it would have damaged
his chances of getting into work and would have knocked back his
recovery.
4.8 The average weekly rent within St Mungo's
is £150-160. Chris would have been expected to make up the
difference of £15-16 after month 12 of his stay.
Table 1
| Current situation |
Under new proposal |
| Income | JSA £65.45 |
JSA £65.45 |
| Expenditure | — Service Charge: £12.00 (Elect, Gas, Heat)
— Travel: £16.60 (Wkly bus pass)
| — Service Charge: £12.00 (Elect, Gas, Heat)
— Travel: £16.60 (Wkly bus pass)
— Contribution to rent: £16.00 (10% of £160 average rent)
|
| Net Allowance | £36.85
(cover, food, clothing toiletries)
| £21.85
(cover, food, clothing toiletries)
|
4.9 This equates to £2.98 per day under the new proposal
which is not sufficient to pay for food to live on. This is, in
effect, a 43% reduction in the amount our recovering residents
have to spend on food, clothing and toiletries.
5. IMPACT ON
THOSE TRYING
TO FIND
WORK
5.1 This has been pitched as a measure that will incentivise
work. However, we are highly sceptical of its ability to do so
for our clients both because of its negative impact and because
they are unlikely to be ready for employment after a year. If
anything our concern is that this will act as a barrier for people:
- It will de-motivate people who are trying to find work, penalising
them regardless of how much progress they have made over the year
and how many jobs they may have applied for.
- It will create and compound structural barriers6
to people finding work, for example finding the cost to travel
to training or interviews or buy appropriate clothing for interviews
etc.
5.2 In recent research undertaken by St Mungo's
looking at homeless people's barriers to work we found that people
faced a range of concerns which could be compounded by a sudden
loss of income in particular people's self confidence. In the
survey conducted 49% agreed with the statement "Lack of confidence
stops me from getting training or work."7
5.3 We are also concerned that it will decrease
motivation to engage in skills or vocational training, particularly
if that training is over a period of months. If people are aware
that they have a year before their income will nearly halve they
will have little incentive to engage in activity which might better
equip for the labour market in the long term or enable them to
fill skills gaps in the current labour market. Given the low levels
of skills among our client group this is of particular concern.
5.4 This measure would also seem to run counter
to the policy approach being adopted elsewhere on welfare to work.
The development of the Work Programme seems to explicitly take
into account the reality that people have different journey's
into employment and that some take longer than others. It would,
therefore, be strange if housing benefit policy undermined this
approach. Evidence from our employment projects show that we can
support vulnerable homeless people with a poor work and education
history towards and into work but that it takes time. Our innovative
hostel based Pathways 2 Employment programme achieved these outcomes
with people who had been in the programme over nine months:
- 13% had gone into a full or part-time job.
- 6% had gained a work placement.
- 6% were doing voluntary work.
- 17% were taking a further education course.
- 14% were completing a vocational training course8.
6. IMPACT ON
HOUSING PROVIDERS
6.1 As a social housing provider to some of the
most vulnerable people in society we are very concerned about
the position this legislation could place us in. If this measure
is bought into effect we will face difficult choices either we
force people into debt, poverty or ill health through requiring
them to pay us the gap between their housing benefit level and
their rent, are forced to evict people who are unable to meet
this cost or somehow find the resources to cover the shortfall
ourselves.
6.2 Given that this will come into effect in
2013, at a time we anticipate that we will already have had to
make significant efficiency savings in response to reducing Supporting
People funding, covering the cost ourselves risks putting St Mungo's
into financial difficulty.
6.3 We have made estimates of the impact based
on those clients who have currently been on JSA over 12 months.
On this basis we estimate that there will be a shortfall between
rent and housing benefit of £287,000 per annum a cost of
£820 per client per year. This additional burden would impair
our ability to support people as quickly as possible to recovery
and in the long run may well cost the state, if not DWP, more.
6.4 If, rather than covering the cost, we opted
to evict those who couldn't pay we may well be evicting significant
numbers of people on to the streets where other services would
have to pick them up, significantly undermining an individual's
ability to move on from homelessness and further using expensive
services.
7. POSSIBLE WAYS
OF LIMITING
THE IMPACT
OF THE
CUT
7.1 We strongly believe that this cut will have
wide ranging unintended consequences and that any modifications
to it will still result in hardship and homelessness. However,
the impact on homeless people could be limited by altering the
blanket nature of the cut:
- Create an exemption so that it does not apply
to those living in supported housing or temporary accommodation.
However, this would risk making it difficult to move people on
from supported accommodation into the private rented sector.
- Exempt people facing specific barriers to employment,
for example those with a recent history of street or other homelessness,
substance use etc. While this would have the benefit of the exemption
following people into the private rented sector it would require
a dramatic improvement in the way this type of information is
captured about people by organisations like Jobcentre Plus in
order for it to be effective.
- Link cut to whether people are engaging with
the Work Programme and actively seeking work rather than their
total success in getting a job. While we do not agree that this
is a benefit which should be used as a back to work incentive
if it is being used as such then it should be linked to people's
engagement, otherwise it will penalise people even if there are
no jobs for them to go to.
- Raise earnings disregard so that people can at
least make up the shortfall with part time work.
6 September 2010
REFERENCES
1 Shelter, Housing
Benefit Warning, 2010, http://england.shelter.org.uk/news/june_2010/housing_benefit_warning
2 Crisis, Policy
Briefing Housing Benefit cuts, 2010, http://www.crisis.org.uk/pages/housing-benefit.html
3 National Housing
Federation, More than half a million people could be added
to housing waiting lists - if housing budget is cut, 2010,
http://www.housing.org.uk/default.aspx?tabid=212&mid=828&ctl=Details&ArticleID=3126
4 London Councils,
Housing benefit cap for London must be revised or nearly 15,000
families could lose their homes, 2010 http://www.londoncouncils.gov.uk/media/current/pressdetail.htm?pk=1116
5 St Mungo's, Work
Matters, 2010, http://www.mungos.org.uk/actionweek/be_part_action_week_2010/
6 Centre for Social
and Economic Inclusion Access to mainstream public services for
homeless people: a literature review (Crisis, 2005); Lownsbrough,
H Include Me In: how life skills help homeless people back into
work (Demos, 2005).
7 St Mungo's, Work
Matters, 2010, http://www.mungos.org.uk/actionweek/be_part_action_week_2010/
8 Ibid.
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