Deregulation Bill

Supplementary written evidence from the Local Government Association (DB 14)

Deregulation Bill

I am writing to you following my evidence to the Public Bill Committee on 25 February 2014.

I offered to write to the Committee with additional evidence in relation to two points on a) what assessment the Local Government Association (LGA) has made of the cost to the public purse of increasing numbers of householders in receipt of benefits renting in the private sector rather than being able to access social and affordable housing; and b) what discussions the LGA has had at meetings on Right To Buy (RTB).

Private Rented Sector – Cost to the Public Purse

The English Housing Survey [1] provides some useful figures which provide an insight into the additional costs incurred to the public purse where households in receipt of benefits rent in the private rented sector rather than in social or affordable housing. The survey found that average weekly rents in the private rented sector were £163 per week in 2012/13. This represents a difference of £74 a week when compared with the average social sector rent of £89 in 2012/13.

The same survey also found that a quarter of private rented sector households were in receipt of housing benefit, up from 19% in 2008/9 [2] , as those on low incomes were increasingly reliant upon housing benefit to meet part or all of their housing costs. It is obviously not possible to predict the exact impact of the change in the qualifying period upon aggregate housing benefit expenditure, and such a shift would happen over time. By means of an illustration, based on these rent levels, if an additional 2,000 households had to access a privately rented rather than social tenancy on full housing benefit, the annual additional cost in housing benefit would be £74 x 52 x 2000 = £7.696 million.

Meetings on Right To Buy (RTB)

I would like to clarify, following the point about attendance at a meeting of officials raised by Mr Heald, that the LGA has taken all opportunities to raise awareness of its concerns with RTB previously with regards to this Bill. The LGA’s comments on Clause 21 were raised formally in our written evidence to the Joint Committee on the Draft Deregulation Bill and our oral evidence to that Committee on 4 November 2013. [3]

The LGA has also taken the opportunity to raise with Government Ministers, the CLG Select Committee and in correspondence and meetings our issues with RTB since the major reforms in 2012. As you have noted, I took the opportunity to put on record our concerns with the system and our proposals for change which would support greater reinvestment in replacement homes again at the oral evidence session on 25 February 2014.

I hope this additional information is helpful to the committee on the questions raised.

Cllr Ed Turner - Member, Environment and Housing Board, Local Government Association

March 2014

Prepared 19th March 2014