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Housing Benefit

It is right that the Labour Government intended to remove the £15 excess. However, the Minister will accept that the sheer number of people who will lose as a consequence of these changes far exceeds the small number of high-profile cases to which people on his side of the argument usually confine the debate. We have rehearsed this argument before, so I do not want to spend too much time on it. None the less, the argument was made again during yesterday's debate on the Welfare Reform Bill that housing benefit is out of control. We know that expenditure on housing benefit increased from £11.5 billion to £21.5 billion over the decade, and only half of that is down to inflation. Social housing rents have risen significantly as a consequence of rent restructuring, and above all—this is the key factor and the reason behind so much concern in the Labour party—case loads have risen. Case load increase has been the main driver of increased expenditure on housing benefit. In the two years since the local housing allowance was fully extended across the country, 87% of the rise in that allowance was driven by case load. During those years of recession, almost half that case load involved either people in work, or those on jobseeker's allowance who were therefore connected with the labour market and seeking to get back into work. It is also worth emphasising that local authorities have been making far greater use of the private rented sector in order to place homeless households. That is not a party political point, because the previous Government did that as well, reflecting the shortfall in social housing. In the past year, 60,000 households were placed in the private rented sector at far higher unit cost than if they had been in social housing. Many of those high profile individuals who found their stories in the Daily Mail and the Daily Express were placed in that accommodation by a local authority, because it had no other place in which to put them. Professor Wilcox was, I believe, an adviser to the Select Committee and has worked extensively for the Department for Work and Pensions. Writing in the new UK Housing Review, he refuted the central Government claim that the local housing allowance was the main driver of inflation in costs:"““The Government have argued that increased rents charged to clients reflect exploitation of the housing benefit regime by private landlords and that this has also been a substantial factor accounting for rising programme costs. The evidence for these claims is not robust. Even if it is assumed that all the above-inflation rise in private rents is attributable to landlord action, this would account for only 10% of the total cash increase in Housing Benefit over the decade.””" We therefore have a rising case load, including a rising case load of those in work, of people who are at risk of losing a substantial share of their income either from April or during the 9 months afterwards. There will be new claims, and many of those people will be forced to move. We already know that 47% of all local housing allowance tenants have a shortfall between their current rents and the allowance—I stand to be corrected if that is wrong. Therefore, the ability of tenants to absorb an additional shortfall is already small. We know that a substantial number will need to move to a reduced and continually decreasing pool of available property. The National Housing Federation has stated that in London alone, 160,000 claimants will need to fit into 46,000 homes. There will be a major movement of people. The hon. Member for Woking (Jonathan Lord) made the case that his constituents find it hard to justify people living in high rental areas, and that they want to see costs come down and fewer people living in expensive areas, which may well be true. I understand that concern and that members of the public, particularly outside London, find it a struggle to justify those rents. There is less of a clamour, however, among the communities that seek to accommodate all those who will be required to move, whether that is further out into Brighton, to the edges of London or outside London. It is worth reflecting on the response given by the London borough of Barking and Dagenham to the housing benefit cuts. Barking and Dagenham is one of the cheapest areas in the south-east, and it is likely to receive a large number of out-movers. I will quote its report:"““Given that Barking and Dagenham has the lowest private rent levels in London…it would be logical to expect that displaced households might…of their own choice look for private rentals here,””" or they might be placed there by other local authorities."““Such an influx would place additional pressures on waiting lists, social, educational and welfare provision as well as greater demands for support in preventing debt and homelessness.””" It has been estimated that at least 3,000 households will seek to move to Barking and Dagenham. The report goes on to say:"““If rental demand does decrease and housing benefit claimants do migrate to the borough, this may have a significant impact upon the Council's ability to move its own residents from waiting lists””" into local accommodation. That would lead to increased tension between Barking and Dagenham residents and in-movers—as we know, Barking and Dagenham is a community where we do not want to increase tension between in-movers, many of whom will be black and minority ethnic, and the resident population. The areas that will be expected to accommodate out-movers are not prepared for it financially: they do not have the resources; they do not have the school places; they do not have the social capacity; and many of them are seeing their grants cut as well. The move to using the consumer prices index will further ratchet down the availability of accommodation until, as the Cambridge centre for housing and planning research has shown, 34% of all local authorities will, within a decade, be unaffordable to everyone on the local housing allowance. The Minister will say that discretionary housing payments will meet the shortfall and take the strain. It is welcome that additional money has been put into the discretionary housing payment pot and into the homelessness prevention fund for local authorities. However, it is estimated that that money will assist only about 60,000 of the total pool of households. Conveniently, 60,000 is also the figure for the households placed by local authorities in the private rented sector. It will therefore go no further than merely meeting the shortfall of local authorities' placements of their own homeless households. If it is asked to stretch further, it will not meet the shortfall at all. Therefore, as welcome as the money is, it will go only a very short way towards offsetting the disadvantage. The measures will mean homelessness, hardship and all the risks set out in the Select Committee report, the Social Security Advisory Committee report and the Government's own assessment. They will mean, as we have heard, that huge numbers of people who are currently in work—including 1,000 local housing allowance claimants in my borough alone—will lose and lose big. Those people have jobs, and they will be forced a long way out of inner London. They will, of course, face commuting costs that make it extremely difficult for them to make work pay in the new environment. I want to say a few words about the measures on social housing under-occupation, which so far have not received the attention that they deserve, because they are being phased in a little later than those relating to the private sector local housing allowance. We have seen the equality impact assessment released yesterday by the Department, and we know that the introduction of the size criteria for social housing will affect an estimated 670,000 people throughout the country. That number will rise as the pension age rises. It is 32%—almost one in three—of all housing benefit claimants in the social rented sector. Most extraordinarily—I think this astonishing—the equality impact assessment states that the number of people with disabilities who will be affected by the change is twice as high as the number of people without disabilities. The Government are seeking to require, in two years' time, 450,000 households with a disabled recipient of housing benefit to move to an alternative property. That is what the impact assessment says—450,000. The figure is 670,000 people in total. If those people do not move, they will face a shortfall of £13 a week between their rent and their housing benefit. Not only is that a disproportionate and extraordinary impact on older and disabled people, but one wonders how on earth the whole policy of downsizing in relation to the under-occupation rule will work. The total number of households that moved in the social rented sector in the last year for which figures are available was less than 200,000. In 24 months' time, the Government will expect 670,000 people to try to avoid a penalty on their housing benefit by moving to smaller accommodation. That is three times more than the total number of people who get moved in the social rented sector every year. Housing authorities, housing associations and councils simply will not be able to meet the demand for downsizing. The position is even worse, because there is a huge regional disparity, with by far the highest level of under-occupation in the north-west of England and by far the highest level of overcrowding and pressure on housing in London and the south-east. Local authorities will not necessarily be able to meet even the demand in their own local authority area. They will be seeking to obtain accommodation from other local authorities in other areas at the very moment when local authorities are tightening their criteria for housing allocations. Westminster council—my local authority—has just announced a 10-year residency qualification for people seeking to move into the area. It will not be offering any of its accommodation to people outside the area who are seeking to downsize. The sheer mismatch between the legal duties on local authorities and housing associations, their own lettings criteria, their homelessness duties and reasonable preference requirements and what the Department for Work and Pensions expects to happen is extraordinary. I asked the Minister parliamentary questions to try to find out, before we got to the Welfare Reform Bill, what the practical implications of the measures would be. Of course, the reply that I get is that the Minister and the Department are still working on what the practical implications will be. The scale of the problem is far greater than the Government have admitted, including in their response to the Select Committee. There will be huge practical difficulties in implementing the policies, which I suspect will end up in many cases either not saving any money or being completely impossible to implement, leading to greater responsibilities and homelessness costs in relation to other authorities. That is before we get into the extraordinary situation in which the new affordable housing delivery programme—150,000 new homes—welcomed by the hon. Member for Cardiff Central, will involve higher levels of housing benefit than most properties currently in the private rented sector, thereby pushing up the housing benefit bill at the same time. A great deal of work needs to be done by the Government to see whether any of the proposals are workable, let alone able to accommodate the sheer hardship and social stress that will be caused by them. It would be nice to be able to house people who are on low incomes and in need for nothing, but that is not a possibility. We have to work with the resources that we have. What the Government are proposing will potentially create a perfect storm of housing need and difficulty with implications going far beyond the housing sector.