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

My Lords, the noble Lord, Lord Kirkwood, has tonight raised the thorny problem of the local housing allowance, which was highlighted by my noble friend Lady Gardner of Parkes in her Question of 20 January, although from precisely the opposite end of the spectrum. The Minister will remember that my noble friend was worried about what she saw as the exorbitant amounts of housing subsidy being paid in certain circumstances in London. The noble Lord, Lord Kirkwood, is, however, worried about the fairness of the way in which local housing allowance is calculated. He has addressed this subject with what I might describe as a ““softly, softly, catchee monkey”” approach and clearly has no intention, for which I am glad, of dividing the House this evening. As the noble Lord, Lord Best, has said, the calculations are made by reference to broad rental market areas. These are very large, and your Lordships sitting judicially in the Heffernan case determined that not only were they very large, they were ““too large””. The importance of the size of these BRMAs, as they are known—how I hate acronyms, but I suppose they have their uses— is that, within those areas, private local rented accommodation rates are set by taking the average of available rents in the area as evidenced by advertisements in local estate agents and the local press. This brings me to my first question. Many private landlords refuse to let their properties to benefit recipients. The National Landlords Association undertook a survey of its members in December last and discovered that just under half of them were not prepared to let their properties to benefit recipients. My question, therefore, is this: does the calculation of the local housing allowance include the results of advertisements for all properties in the area or are those that will not accept DHSS, as it is called, excluded from the rent officers’ survey? This is not a new subject for me. The Minister will remember me talking about the problem of advertisements stating ““No DHSS”” or the equivalent phraseology, so if the rents advertised in such advertisements are included, that will obviously skew the result in one direction or the other, depending on their percentage in a BRMA. The Benefits Information Guide states that local housing allowance represents, "““broadly average rents in an area””." How does the Minister define ““broadly”” in this context? I accept that, unlike housing benefit, LHA is never linked to individual rents, and that, like housing benefit, there are rules about who is permitted what accommodation, and indeed it is right that that should be so. I am the first to deplore overhousing in the supported rented sector, whether public or private. What people do with their own money is a matter for them, but I cannot see why pensioners who had four children and maybe four or five bedrooms to house them in should remain on the same amount of benefit when their children leave home. That said, I do not believe that the same pensioners should never be entitled to an allowance for more than one bedroom. I hope that the Minister will recall in this connection correspondence I sent to him following my noble friend’s Oral Question on 20 January to back up my then supplementary question. It was from a pensioner couple in the Teignbridge area of Devon who had been put on to local housing allowance because of needing to move house. This is because any change in one’s circumstances results in being automatically transferred from housing benefit. One of the couple is seriously ill and requires a separate bedroom. The rules however, do not allow for that. There should be a way that a GP’s certification would entitle such a couple to an extra bedroom. Serious though that matter is, it is in a sense an aside to the debate introduced today by the noble Lord, Lord Kirkwood. Much more important is the fact that the BRMAs are so big that if tenants suffer a change of circumstances, they will regularly have to move well away from where they were living previously, leaving behind friends, neighbours and perhaps GPs. I cannot believe that it is the Government’s policy to create benefit ghettos, a phrase which I am sure the Minister will rush to his feet and deny. I am glad for all these reasons that the Government are undertaking a two-year review of local housing allowance which, incidentally and as has already been pointed out, is in marked contrast to the one-week consultation held before this order was made. In this review, will the Government be monitoring the effect of BRMA boundaries on both tenants and landlords, especially in large and housing-diverse areas? Cambridge is a case in point, where again there are reports of people having to move out of the town centre into outlying villages. I also heard this morning that no one- or two-bedroom properties are available for rent for more than a few months in the private sector at LHA rates in south Devon. It seems that the local rent service used the figure for winter lets and has assumed that, even in a holiday area, it will pertain throughout the year, which of course it cannot. If that is true, and I have no reason to doubt it, another thing that desperately needs to be looked at is how housing benefit/LHA is administered. Figures have recently been published showing that in Luton, to pick an example out of very thin air, it takes 69 days between application for, and delivery of, the benefit, but only five days in St Albans, which after all is not very far away. When the Government hand over £16 billion a year to local councils, they must surely be concerned about what happens to it and how it is administered. This is highlighted by a Written Answer in another place from one of the Minister’s colleagues, Ms Ussher, which revealed that the department has no idea how much local housing allowance is paid to landlords. The House may find this, as I do, more than a little surprising, given the Government’s drive for financial inclusion. Can the Minister tell me what proportion of housing benefit as opposed to LHA is paid to landlords? The Government should also be concerned that the whole LHA approach is reducing the effect of the welfare reform agenda, of which in general I approve, as I will be saying when we get to the Bill. But even then, there are problems. For example, the taper at 65 per cent means that the withdrawal rate of LHA/HB is large, but as the noble Lord, Lord Kirkwood, almost said, access to work problems are bound to occur when the only affordable rented accommodation is on the distant periphery of an employment centre. Indeed, it could be several miles away under the BRMAs as they currently exist. There must be a happy medium between the greatly increased number of BRMAs the Law Lords have called for, and the number we have now. If local housing allowance is to continue to exist, and in theory it has great advantages—the noble Lord, Lord Best, told us about research into this area by eminent academics—the Government need to find out the correct number and to act. Currently, from the information I have, and which has been subscribed to all around the House by the vast number of social security aficionados we have in this Chamber, the allowance is clearly a long way from being fit for purpose.