1 Introduction |
In the text of this report our conclusions
are set out in bold type and our recommendations, to which
the Government is required to respond, are set out in bold
Changes to Housing Benefit
1. Housing Benefit is an income-related
benefit for social and private sector tenants on low incomes (both
in and out of work) which was introduced in 1982 in order to simplify
a previously complex system including both subsidies and rent
rebates. Housing Benefit is administered by local authorities.
From 2008, tenants in receipt of Housing Benefit in the private
rented sector have had their benefit calculated using the Local
Housing Allowance (LHA), which assesses a household's eligible
rate using a percentile of rents in a local "Broad Market
Rental Area" (BMRA).
2. The coalition Government announced
a range of Housing Benefit reforms in the Budget of June 2010,
both to LHA and HB in the social sector, as part of its aim to
reduce benefit expenditure. Some of the reforms were implemented
from 2011; others more recently. In 2012 the Government raised
the upper age limit for the Shared Accommodation Rate for single
people without dependent children from 25 to 35. From April 2013,
the household Benefit Cap was introduced (under the provisions
of the Welfare Reform Act 2012), which affects both private and
social sector tenants. It limits the total income working-age
households can receive from income-related benefits; the difference
between a claimant's total benefit and the Cap level is subtracted
from Housing Benefit, or from support for housing costs under
3. There are a number of other changes
affecting support for housing costs:
way Housing Benefit is paid will change under Universal Credit:
it will cease to exist as a separate benefit and instead will
form the housing costs element of Universal Credit and will then
be administered centrally by DWP, rather than by local authorities.
Universal Credit will be paid monthly, in arrears, directly to
claimants. This will be a change for Housing Benefit claimants
in the social sector (and some in the private sector), whose housing
costs support is currently paid directly to landlords.
April 2013, Council Tax Benefit was replaced by Council Tax Reduction
which is administered by local authorities, who are able to design
their own schemes. The reform was accompanied by a 10% reduction
in central funding.
About this inquiry
4. We reported on our assessment of
the likely impact of some of the key LHA reforms in December 2010,
before they were implemented.
It seemed timely to conduct another inquiry now that the impacts
are becoming clearer. Our report on Universal Credit, published
in 2012, and a subsequent oral evidence session in July 2013 with
the Secretary of State for Work and Pensions, had also highlighted
the need for further exploration of how support for housing costs
will be dealt with under Universal Credit, and the interaction
with other welfare reforms.
5. We announced this inquiry in July
2013. It has considered new and innovative responses to the implemented
and planned changes to housing support; and the implications of
the reforms for social and private sector landlords, local authorities
and claimants. We focussed particularly on the potential implications
for vulnerable claimants such as people with disabilities, families
with children, and those in supported and temporary accommodation.
6. We received over 80 written submissions
from a range of organisations and individuals. We also took oral
evidence from academics and experts in housing and benefits policy,
social and private landlords, local authorities, claimant representatives,
claimant advocates and welfare rights advisers. We visited Bedfordshire
to discuss the social housing reforms with housing associations,
tenants and local authorities. We are grateful to everyone who
contributed to our inquiry.
7. Our specialist adviser for this inquiry
was Professor Christine Whitehead.
We very much appreciate the advice and support she has provided.
8. A number of the reforms discussed
in this report were implemented in 2013 and so only an initial
assessment of their impact can be made at this stage. Even with
the LHA reforms, some of which began in 2011, phased implementation
and transitional protection offered to existing claimants mean
that evidence of the full effect is only now becoming available.
Some of our recommendations therefore focus on the need for the
Government itself to monitor carefully the impact of the changes
it has introduced and to take urgent remedial action where necessary
to assist the hardest hit claimants, particularly given that a
number of them will be affected by other welfare reforms, including
reforms to disability and incapacity benefits.
1 LHA was piloted from 2003
and rolled out nationally from 2008 Back
Work and Pensions Committee, Second Report of Session 2010-12,
Changes to Housing Benefit announced in the June 2010 Budget,
HC 469 Back
Work and Pensions Committee, Third Report of Session 2012-13,
Universal Credit implementation: meeting the needs of vulnerable
claimants, HC 576; and oral evidence taken on 10July 2013 on Universal
Credit: follow-up, HC 569-i Back
Relevant interests of the Specialist Adviser were made known
to the Committee. The Committee formally noted that Prof Whitehead
declared the following interests: adviser to the Board of the
Housing Finance Corporation; Fellow of the Society of Property
Researchers; Member, Royal Institution of Chartered Surveyors
(RICS). Independent research for Shelter, Joseph Rowntree Foundation
(JRF), RICS, the Housing Futures Network; Council for Europe Development
Bank; and the European Investment Bank. Further independent research
working with: the National Housing Federation; Department for
Work and Pensions; the Welsh Government; Camden Borough Council;
JRF; Realdania in Denmark; Berkeley Homes, Qatari Diar Delancey
via the Young Group; and Homes for Scotland. Back