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What would it cost to sort this out? The Government accept that £20 million is about right for abolishing the single-room rent, provided the change does not increase demand. Out of a total budget for housing benefit of more than £12 billion, this figure is not too significant. However, Amendment No. 81 recognises that the Government do not want to go the whole way yet in removing the limitation entirely, so this amendment goes for a compromise by confining

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the change to those who are aged 21 or over. The Minister agrees that this reduces the headline figure to £10 million, but he argues that 21 is an arbitrary age.

There are logical grounds for using 21 as the age when the position might change for claimants. The minimum wage goes up at age 22, and at present the single-room rent itself uses 21 as a cut-off for a special exemption that allows those leaving care to go into self-contained housing. Care leavers would not lose this entitlement after age 21 if the amendment were accepted. I would add that using the half-way house of age 21 would limit the Government’s exposure to the risk of higher costs. It allows the ground to be tested before moving on to complete abolition of this restriction on benefit if the results are positive.

Even if the change costs more than the £21 million estimate, account must be taken of the savings and benefits as well. Leave on one side the relief of homelessness and an end to the miseries of sofa surfing, which makes getting a job so difficult, purely considering the cost-benefit equation, the amendment would have some significant offsetting gains. Currently the inability of young people to move out of specialist housing, hostels and supported accommodation means they unwillingly engage in bed-blocking—taking up places, which others desperately need when they are ready to move out. As the YMCA has explained to us, it costs £350 per week to retain people in housing with specialist support. The cost to the state of covering in full a rent of, say, £100 per week, would be far, far less. By enabling one person who is ready for independence to move on, the providers of supported housing can take in one more homeless single person to go through the process of support and training. This problem of expensive bed-blocking is affecting many of the organisations taking in homeless young people. The amendment would have the very great value of removing this major barrier to preventing those under 25 moving onward and upward.

I apologise at this late hour for laying out my case in some detail. I tried to marshal the arguments that will lead at last to a reform that will change the lives of many thousands of young people unable to secure a place to live. I know that it is late, but unless the Minister feels able to give some hope of movement on this one, I shall test the opinion of the House. I beg to move.

Lord Oakeshott of Seagrove Bay: My Lords, what a powerful case that was. I have little to add to it. We debated this at some length in Grand Committee, and the noble Lord has drawn to considerable extent, as I would have done in my speech, on the Citizens Advice and Shelter briefing. We also very much welcome the support of the other organisations, some of which I mentioned in Grand Committee. The best estimate is that this would cost £10 million a year. That is a very modest sum to rectify what Tony Blair, John Prescott and John Hutton, among others, agreed was an injustice before they came to power.

I shall probe the Minister in a little more detail on the point made by the noble Lord, Lord Best. In the

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past few days, the Department for Communities and Local Government—D-CLoG, as it is called—has published a policy briefing that states:

What does that mean? We did not see a hint of concession in Committee. Is the DWP looking at it by putting a telescope to its blind eye? If it is raising false hopes by this, that would be worse than not raising them at all. I shall leave it there, but I encourage the noble Lord, Lord Best, to have the courage of his convictions.

Baroness Hollis of Heigham: My Lords, this has been a problem for many years. We have made some movement on the shared room rent philosophy over the years, but there is a problem of supply and demand. We have all had hundreds of cases reported to us of young people who have to top-slice their income support or JSA, let alone their disability benefits, to be able to afford accommodation that is not fully covered by housing benefit. There is undeniably a problem.

I have two difficulties with the solution proposed by the noble Lord, Lord Best, which is to bring the age for going on to housing benefit support, or the new housing allowance support, for self-contained accommodation down from 25 to 21. First, there is a problem of work incentive, partly because housing benefit and its tapers are the elephant in the room on all welfare reform policies by virtue of the very steep tapering effect. This is not particularly germane to the argument made by the noble Lord, Lord Best, but we know that where council estates have gone over to being housing associations on the grounds that in housing associations people are in work, the people who are transferred on housing benefit remain out of the labour market because it is so expensive for people on the minimum wage to leapfrog into making work pay. I would not like to attach a figure to that problem.

Secondly, there is the big-ticket number. The noble Lord, Lord Best, said that the cost of providing for those over 21 to go into self-contained accommodation would be £10 million. My difficulty is that for a lot of social security there is a fulcrum at 25. IS is set at a higher rate for those aged 25 and over, as is JSA. If one were to bring the fulcrum for housing benefit down from 25 to 21, it would be difficult not to argue that IS and JSA rates should follow; otherwise, there would be major disjunctions between rent and income levels and whether a claimant was supposed to be in an independent household. I do not have a clue what the figure would be, but I suspect it would be around £200 million or £400 million. I am guessing because I have done no work on that estimate, but I suspect it would be a big-ticket number to bring the read-across benefits down to the same fulcrum.

Having said that, I do not think any of us would feel comfortable walking away from this amendment, so I shall press my noble friend on the discretionary housing payments scheme. It has existed for a number of years and is a central government grant to local authorities to allow them to top up people’s housing

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benefit and council tax for a good reason, such as because they are vulnerable, pregnant or have a very large family. Very many of the young people to whom the noble Lord, Lord Best, referred ought to count as vulnerable and to be eligible for such a fund. There is no reason why that should not be the case since, as I say, some local authorities spend all their money and some spend only 10 per cent of it. It is completely random and most people do not even know about it.

I do not know whether the noble Lord, Lord Best, and others might feel that this is a reasonable way forward but, as we publicise the new local housing allowance scheme, could we ensure that all the literature makes reference to the discretionary housing payments scheme for those who may be considered vulnerable and that local authorities are circularised with this? Could my noble friend review the adequacy of the fund in the light of that? I cannot remember how much it was; while I have a feeling that it was about £25 million, it could well have gone up by now. That might be a way forward, giving a tailored help to those who need it without it becoming a big-ticket item for the whole field of social security.

We have a real problem, but the solution that the noble Lord, Lord Best, suggested is possibly too big for this amendment, given the implications both for work incentives and the social security budget. I believe that there is another way of dealing with it, so could my noble friend help us on that?

Lord Oakeshott of Seagrove Bay: My Lords, the noble Baroness was probably not in Grand Committee when we discussed this exact point. The problem was that this benefit runs out in many areas well before the end of the year. Unless more money is put into it, I do not believe it will be a solution. Perhaps the noble Baroness would comment on that.

Baroness Hollis of Heigham: My Lords, I entirely accept that some local authorities will quickly spend over 100 per cent; others underspend. Yet through this cost-limited and cash-constrained vehicle the local authorities in which there is need could be targeted, as it is known where the need is. The problem could be redressed in that way.

The Earl of Listowel: My Lords, I strongly support my noble friend’s amendment. It can be difficult for a young person to find a home. Let us take for example a typical group of young people from Centrepoint. A 17 year-old tells me that when she first moved out of home she moved into a bed and breakfast in Earl’s Court. There was no lock on her door, and a man in his 40s kept hanging around immediately outside it. An 18 year-old tells me that he was placed in a bed and breakfast after leaving custody. No support was offered and he soon found himself on the street.

We are discussing over-21s now, yet when the Centrepoints, YMCAs and foyers cannot find move-on accommodation for their older young people then they cannot offer support to their younger ones. They are silted up, as the noble Lord,

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Lord Best, said. The YMCA states that it cannot find move-on accommodation for 35 per cent of its young people.

I do not wish to patronise young people in their early 20s; three-quarters of those in employment share with other people. Some of those currently out of work will find it difficult to share. For many, that will be due to shortage of supply, while for others it will perhaps be due to a poor upbringing that leaves them ill equipped to co-operate with others. Of those who find a flat, many will have difficulty managing their money. The single room rent will exacerbate those problems; the young person’s tenancy may collapse, and they may be crushed by having failed in something in which they had so deeply invested themselves.

Critically, the DWP’s own research report No. 243, Research into the Single Room Rent Regulations, published in 2005, highlighted:

The noble Lord, Lord Skelmersdale, made that exact point at Second Reading and it has been made again this evening.

We often do a poor job in this country of nurturing our children. The behaviour of some of them leaves our rate of child custody high above those of our neighbours. This February, we have the highest recorded number of children in custody of any February. I strongly support this amendment, which would also benefit young people in care whose exemption runs out at age 22. I am particularly keen to be reassured that the Department for Work and Pensions and the Department for Communities and Local Government are co-operating closely on enabling young people to gain a secure home base so that they can find and sustain work and become fully independent adults. Will the Minister consider meeting the noble Baroness, Lady Andrews, his opposite number from the Department for Communities and Local Government, soon to discuss this matter? Were it helpful, I am sure that my noble friend and I would be glad to attend such a meeting. I strongly support the amendment, and I hope that the Minister will accept it.

Lord Northbourne: My Lords, I support the Government in wanting to save the taxpayer money. Indeed, I also support them in wanting to reduce young people’s dependence on the state. However, I also support the amendment because, on the evidence, the single room rent, or whatever it is called now, is simply not working. It is also damaging young people, particularly vulnerable and excluded young people. The poor socialisation of young people in this country today is covered by the recent UNICEF report on the well-being of children in rich countries. It cannot be a matter of pride for any of us that this country comes 21st out of 21 European countries

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which the report looked into. I know that that report has defects, but its findings are confirmed by recent reports by the IPPR and others that have come out in the past two or three years.

Housing is a key factor in the socialisation of young people, particularly the disadvantaged and excluded. Such young people need help, not additional problems. For that reason, I support the amendment.

Lord McKenzie of Luton: My Lords, the noble Lord, Lord Best, has no need to apologise for tabling an amendment at this hour, particularly as he spoke on the matter with lots of knowledge and clear commitment. As has been acknowledged, the amendment is something of a compromise between the current rates and the complete abolition of the single room rent, or shared room rate. In Committee, we discussed the rationale for having the single room rent cut-off at age 25, as the lower average earnings for those under 25 limits the type of housing that someone in this age group can afford.

The noble Lord is right to note that the adult rate for the national minimum wage is set for those aged 22 and older. The national minimum wage and the social security system share the same aim of increasing employment. However, it is important to note the difference between the two. The national minimum wage is intended to make work pay, but has a lower rate for those under 22 to ensure that young people are attractive to employers. The social security system, and therefore housing benefit, is intended to reflect an individual’s needs but not to create a disincentive to move into work, a point touched on by my noble friend Lady Hollis. This leads us to consider again the fundamental principles behind the single room rent.

In Committee, the noble Earl, Lord Listowel, spoke about the difficulties that some of the most disadvantaged young people in society face. He spoke of the perilous cycle of exclusion that may begin when a young person is denied the safe and secure upbringing from which many people benefit. Last Monday, I had the opportunity to meet the noble Lord, Lord Best, to discuss some of these issues further. I reassure the House that the Government share his concerns for young people. This is the age at which many young people complete their transition to adulthood. It is vital that the Government play their part to help them start adulthood in the best possible way.

One of the principles behind the single room rent is fairness for working people. When 75 per cent of those who are under 25, single, without dependants and not receiving benefit live in shared accommodation, there is the principle that those who rely on housing benefit should expect only the same. More importantly, however, we do not want to put young people into a position in which they become dependent on benefits. If we were to abolish the single room rent for all or part of the group to whom it applies, we would extend the benefit trap for many more people. Those who might previously have found suitable shared accommodation would now be able to

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live in larger, more expensive self-contained accommodation, which would mean that they would have to earn a greater amount before being able to move off housing benefit and its taper and fully benefit from every additional pound that they earned. So the culture of benefit dependency would be extended. Instead of housing benefit providing an initial levelling platform for young people, it would provide another route of exclusion and dependence on the state, damaging future job and wage expectations.

The noble Lord rightly spoke about the experience of the shared room rate and the local housing allowance pathfinders. We have learnt from this experience, and for national roll-out we will be using a different, broader definition of what can be counted as shared accommodation—I think the noble Lord, Lord Best, acknowledged this—and changing to the use of the median to calculate rates, which will help to address some of the problems of affordability reported.

The noble Lord, Lord Best, suggested that the drop in the number of houses in multiple occupation, with its share of the whole rental sector decreasing from 9 per cent to 6 per cent, was measured over only two quarters and that therefore the time span was too short to link to any policy change. The local housing allowance evaluation has found that the proportion of landlords providing some shared accommodation remained about the same, despite a high degree of churn in the ownership of this type of accommodation. The noble Lord, Lord Best, suggested that landlords are unwilling to let to single room rent customers. There are many factors influencing who landlords let to. Two of the groups which landlords least like letting to are young people and benefit customers, but this is symptomatic of wider stigma and stereotypes. Abolishing the single room rent is unlikely to fix this. However, making local housing allowance payments to tenants is a step in the right direction. There is some indication from the pathfinders that customers on local housing allowance have been able to mask from their landlord that they are receiving benefit.

We should recognise that many more vulnerable customers are eligible for social-sector accommodation, and the groups exempt from the single room rent include certain care leavers under 22. The noble Lord acknowledged, in relation to those who are severely disabled and those in the social sector, that the single room rent has only ever applied to private rented sector cases.

Again, the noble Lord, Lord Best, talked about the cost of changing the arrangements. Twenty per cent represents the cost of moving existing claimants under 25 into the over-25 rate of benefit. If the cut-off point were under 21 the cost would be half of that, but that assumes that there is no behavioural change. In particular, it assumes that one does not have to go further and align the change to the benefits system more generally, as my noble friend Lady Hollis pointed out—the 25 per cent threshold is relevant for income support and jobseeker’s allowance.

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It was suggested that those who lose their job must downsize, but the data show that 75 per cent of working people live in shared accommodation and therefore many would not downsize. This is the rationale behind the single room rent. My noble friend Lady Hollis raised the issue of discretionary housing payments, which, as the noble Lord, Lord Oakeshott, said we debated at Committee. I am advised that only in the very early years did any local authority spend anywhere near its discretionary housing payment limit. That is the centrally provided bit and the proportion that they can use from their own funding. I can assure my noble friend Lady Hollis that we are updating the guidance on the DHPs to ensure that it continues to assist local authorities to make full use of the discretionary scheme. Obviously we cannot dictate to local authorities precisely how they proceed but working with them is quite important.

The noble Lord, Lord Best, talked about what was happening in the housing market. He said there had been an explosion in the number of small, self-contained flats and a dearth of shared accommodation. Would the impact on market rents not be an equalisation of those two parts of the housing sector? If there is a lot of self-contained accommodation, I presume that, all other things being equal, the price goes down and that, if there is a dearth of shared accommodation, all other things being equal, the price goes up. That must have an impact on the situation. I am sure that we will not readily reach a consensus on this issue tonight, but I have set out the Government’s position, which I believe to be the correct one, and urge the noble Lord to withdraw his amendment.

Lord Best: My Lords, I am grateful to the noble Lord, Lord Oakeshott, and my noble friends Lord Listowel and Lord Northbourne for their support. I thank also the noble Baroness, Lady Hollis, who is such an expert in these matters. She raised the issue of not opening the door to the big ticket cost of having to shift jobseeker’s allowance and income support rates from the age of 25 to 21 as a consequence of allowing this amendment. The Government do not have to change all the benefits because this one stands out in need of reform. It would be possible to change one benefit at a time if that is required by the marketplace.

The noble Baroness, Lady Hollis, made the point that local authorities have discretion to make extra payments to vulnerable housing benefit claimants. It is extremely important that good advice is given to local authorities to make full use of this discretionary housing payments system. I am very pleased to hear from the noble Lord, Lord McKenzie, that such guidance is being prepared. As president of the Local Government Association I know that I should not support ring-fenced funds—I would get into big trouble—and it is probably not a route for this problem that would lead to a satisfactory conclusion.

I am grateful for the response from the noble Lord, Lord McKenzie, but it does not encapsulate the realities of the marketplace. While it would be good

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for people to choose shared accommodation in preference to a self-contained flat and therefore become less dependent on the higher level of benefit that they would have to accept in a self-contained apartment, the realities are that the people we are talking about will not find flats to share with young professionals and others which they can enter. It is not an alternative or an option. The alternative is homelessness or living on other people’s sofas and moving from house to house, which is the predicament in which we place so many people already.

This is a matter of considerable significance and, despite the late hour—

Lord McKenzie of Luton: My Lords, I am sorry to interrupt, but I was remiss in not responding to the question asked by the noble Earl, Lord Listowel, on whether we could meet my noble friend Lady Andrews and the noble Lord, Lord Best, who I am not trying to deflect from what he is about to do. Notwithstanding the outcome of this democratic process, I would be happy to do that.

Lord Best: My Lords, it is very generous of the noble Lord to say “notwithstanding the outcome” of what follows. I should like to test the opinion of the House.

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