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Rent Officers (Housing Benefit Functions) Amendment (No. 2) Order 2008

My Lords, I, too, am grateful to my noble friend Lord Kirkwood for initiating this debate, which gives the House the chance to look at some of the problems surrounding the way in which housing benefit is calculated for claimants in the private rented sector. The chance has come about by way of this order. As we have heard, it sets out how the broad rental market areas are to be constructed for the purposes of housing benefit rates for claimants in privately rented property and seeks to restore the Government’s original policy intention before the Heffernan judgment. The Government maintain that the effect of the judgment if rolled out nationally could increase the number of localities or BRMAs across the country from 193 to 4,000, which would take several years and would increase the cost of administering the benefit. They also maintain that reducing the size of the localities, as advocated in the Heffernan judgment, would mean that customers living in poorer areas would be less able to afford their rent and vice versa. That is the Government’s side of the story. The DWP seems to be quite proud of itself for consulting on the order, but it seems to have taken absolutely no notice whatever of the result of that consultation. What was the result of the consultation? Most respondents wanted a longer consultation period, as my noble friend has said, and ““several respondents”” and ““some local authority respondents”” disagreed with the whole policy. Perhaps the Minister will tell us why the DWP bothered to consult at all. Was it just a tick-box exercise, as the British Property Federation say? It says quite bluntly that the DWP is changing housing benefit policy via the back door in sweeping aside the Heffernan judgment without taking account of the consultation process, which it calls, with some justification, ““a mockery””. I find the figure of only 193 localities, or BRMAs, throughout the whole of the British Isles an astonishingly low figure when one considers all the factors that make up a locality or, rather, what the ordinary person thinks of as a locality. The Explanatory Memorandum to the order says that if as a result of the judgment all the localities have to be amended it will take rent officers several years to do this. However, I do not think that the Government have made the case for just restoring the status quo and, much more importantly, nor did the consultees, including, as we have heard, Shelter and Citizens Advice. With more and more people going on to housing benefit and looking for jobs, it is completely counterintuitive for regulations to have the effect in many areas of making it harder for the poorest to find somewhere to live near centres of employment. We all know that the first thing a jobseeker needs is an address in order to reach the first rung of the employment ladder. It is hard enough to find landlords who will let their property to a housing benefit claimant, such is the fear among them in some areas that the rent will not be paid now that the local housing allowance goes to the claimant. In a place such as Greater Cambridge, which we have all mentioned tonight, only 4 per cent of advertised private housing was affordable to those on housing benefit. This means that those renting privately on benefit further out from the centre will have increased transport costs, if not increased childcare costs too. That completely undermines the Government’s objectives on housing and social policy, which are supposed to prevent homelessness and promote mixed neighbourhoods. Already, Shelter has found patterns of decreasing affordability within BRMAs in London and Manchester, leading to some areas having a far higher concentration of those on housing benefit than others. As the country moves further into deep recession, the marginalisation from areas of employment of those on housing benefit are likely to get worse. In the Welfare Reform Bill, the Government aim to help those who are unemployed to acquire skills to make them ““job ready”” and to undertake ““work-related activity”” while looking for work. Many of those people are likely to be housing benefit claimants. Will it really help them if they are to travel a long way from where they live to attend work-focused interviews, skill sessions and so on with no guarantee of paid work at the end? That is especially true of lone mothers who may have to pick up children from school or who have childcare costs. By constructing BRMAs in such a way as to price unemployed or low-paid workers on housing benefit out of the private rented housing sector, the Government risk creating a causational link from being inadequately housed to being precariously employed. There is already evidence to show that if work is not seen to pay, people are very reluctant to move off benefits. The further people have to travel for low-paid jobs, the more work will not seem to be worth it. All we can do at this stage is urge the Government to review the regulations that are being used to set larger broad rental market areas without taking into account all the factors that make up the locality. They should listen to Shelter and Citizens Advice, which advocate amending the regulations and have shown exactly how to provide that there is a reasonable percentage of accommodation within the local housing allowance rate across every local authority area. That may take some time, but with good will from all sides, that is surely better than leaving things as they are with all the problems that have been highlighted today.