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Housing Costs

Volume 578: debated on Thursday 3 April 2014

We now come to the Select Committee statement. Dame Anne Begg will speak to her subject for up to 10 minutes, during which no interventions may be taken. At the conclusion of her statement, I will call Members to put questions on the subject of the statement, and then call Dame Anne Begg to respond to them in turn. Members can expect to be called only once. I remind them that interventions should be questions and should be brief. Members on the Front Bench may take part in the questioning if they wish.

Yesterday, the Work and Pensions Committee published our report on support for housing costs in the reformed welfare system. Our inquiry explored recent reforms to housing support, including the effects of the individual household benefit cap, the changes to council tax relief, the effects on supported accommodation and reforms to local housing allowance, which is housing benefit for those who are renting in the private sector. We considered the changes that might need to come into force once universal credit is rolled out. Not least, we also looked at the operation of what we call the social sector size criteria, the Government call the spare room subsidy or the under-occupancy penalty, and everyone else calls the bedroom tax.

It is timely that we are launching this report now. It is one year since the bedroom tax was implemented and since the benefit cap began to be rolled out. The Government have reformed the housing costs support system with the aim of reducing benefit expenditure and incentivising people to enter work. We concluded that some vulnerable people, who were not the intended targets of the reforms and who are not able to respond by moving house or finding a job, are suffering as a result of these reforms, which are causing them financial hardship.

The Government’s aims in introducing the bedroom tax were to tackle overcrowding in the social housing sector and to reduce housing benefit expenditure. However, we believe that it has so far been a blunt instrument for achieving that. That is due at least in part to the fact that there are not enough smaller social housing units in the areas where benefit claimants are deemed to be over-occupying. The Government should carry out a detailed assessment of the available social housing stock in each local authority area. If the evidence shows that there are insufficient smaller homes for people to move to, the Government should give people more time to find ways to adjust to the bedroom tax before it is imposed. In areas where the household is under-occupying but there is no suitable, reasonable alternative housing available—we found that some people wanted to move but simply could not—we believe the bedroom tax should not be applied.

The bedroom tax is having a particularly adverse impact on disabled people. We highlighted that between 60% and 70% of the affected households in England contain somebody with a disability, and many of those people will not be able to move home easily due to their disability. They therefore must remain in their home, with no option but to face a reduction in their housing benefit. Many disabled people cannot move because they live in homes that have been specially adapted to help them to cope with their disabilities. Even if they could find another accessible home, which is highly unlikely, there would be additional costs for the local council in adapting the new home before they can move into it.

Many people with disabilities also have legitimate reasons for requiring what is inaccurately deemed to be a spare room. It might be needed to accommodate a carer or medical equipment, or because they cannot share a room with their partner because of their condition. We recommend that disabled people living in a home that has been significantly adapted for them should be exempt. We also urge the Government to go further and exempt all households that contain a person in receipt of higher rate disability living allowance or the equivalent in personal independence payment.

There is also evidence that, rather than saving public money, which was one of its key aims, the so-called bedroom tax is often just shifting costs to local authorities and housing providers. We therefore call on the Government to carry out a full cost-effectiveness analysis of the policy by this time next year, so that the overall impact of the policy on the public purse can be properly evaluated.

We found that the benefit cap was having a particularly adverse impact on two groups of claimants: carers and people in temporary accommodation. People on disability benefits are excluded from the cap but not people who claim carer’s allowance. Even some carers who live in the same household as the disabled person are not exempt from the cap; that is because, if the disabled person they care for is a parent or adult child, the carer is not considered to be part of the same benefit unit. We recommend that the Government should exempt all recipients of carer’s allowance in that situation from the benefit cap.

Local authorities often have no option but to place homeless households in temporary accommodation, which is usually more expensive than permanent accommodation. Those claimants can then fall within the scope of the individual household benefit cap, even though homeless people have no choice in where they are housed and few options for reducing their housing costs. It seems particularly unjust, therefore, for them to be affected by the individual household benefit cap. As local authorities often have to pay the shortfall between rent levels and housing benefit for those affected by the cap, no overall saving is made. Again, we have also recommended that the Government exempt all households in temporary accommodation from the household benefit cap.

One area in which we had some success is supported accommodation, which is used to house vulnerable people, particularly homeless people and women fleeing domestic violence. Exemptions from the benefit cap apply to claimants who live in exempt supported accommodation. However, we received evidence that only some supported accommodation was exempt from the cap, because of the way it is defined. Two claimants housed in supported accommodation units that appeared to be identical might find that one was subject to the cap and the other was exempt. I raised that anomaly with the Prime Minister in a Liaison Committee evidence session in January. Lord Freud, the Minister for Welfare Reform, told us in evidence in February that amending regulations would be laid to remove the anomaly. We very much welcome the fact that those regulations were laid last week. We also welcome the Minister’s confirmation that “virtually all” supported accommodation will be exempted from the cap when they are implemented.

The Government believe that the best way to help people facing hardship as a result of the reforms is through the discretionary housing payments system. We recognise that the Government have provided extra funding for this transitional protection, but those payments are intended to be “transitional”, being allocated inconsistently and only for a short time. Whether or not a claimant is awarded DHP is heavily dependent on where they live, because different local authorities apply different eligibility rules. Access to DHPs should depend on need and not on somebody’s postcode.

DHPs are also intended to offer a temporary, not a permanent, solution to people being unable to meet the full costs of their rent from their housing benefit, but many people are likely to need long-term help because they cannot move house to avoid paying the so-called bedroom tax and because they are often unable to find a job or to work extra hours to make up the shortfall. We believe that the Government should make it much clearer to local authorities that they can make long-term DHP awards, so that claimants who are disabled or vulnerable in other ways do not have to worry about the uncertainty of having to make a repeat claim every three or six months.

Some local authorities take disability benefits into account in the means test they apply for DHP, so some disabled people do not qualify for such help. However, disability benefits are intended to cover the extra costs that people incur because they are disabled or long-term sick; they are not disposable income. It is not appropriate for them to be included in the means test for DHPs and we believe that the Government should issue clear guidance to local authorities that disability benefits should be disregarded in any means test for DHPs.

Finally, we considered the local housing allowance. Private sector rents are becoming increasingly less affordable for housing benefit claimants because of the growing discrepancy between average rents and the amount of local housing allowance that households can claim. As a result, private sector landlords are increasingly reluctant to rent to LHA recipients, evictions and non-renewals of tenancies are increasing, and the properties that remain available to claimants are increasingly of poor quality. The Government’s figures show that homelessness acceptances are down overall, but increases are occurring in high-demand areas, and homelessness among people who are classified as “not in priority need” increased by 9% between 2012 and 2013. We believe that the Government need to monitor the impact of the local housing allowance reforms carefully and look at further ways of supporting claimants if the reforms are found to be exacerbating homelessness.

I commend our report to the House.

Does the hon. Lady concede that of the 60% to 70% of claimants referred to in her statement as claiming to be disabled, only 27% are in receipt of disability living allowance and only 18% are in receipt of the higher rate? It is those people with the highest need who are most likely to have adapted homes and it is that group of people for whom discretionary housing payments are intended. In the current financial year, £165 million has been made available to support them.

Indeed. That is why the Committee did not go so far as to say that all people with a disability should be exempt and suggested that perhaps a proxy, such as those in the higher rate DLA category, might be acceptable. We are very clear that we think that the groups that the hon. Lady mentions should be exempt. I know that many Government Back Benchers often think that those people are exempt, but they are not, for the reasons I gave in my statement. We think that it should be very clear that someone in an adapted house, for instance, should not have even to apply for DHP. Surely they should be automatically exempt.

I welcome the report, which clearly identifies a hardship faced by many disabled people and their carers. Is my hon. Friend confident that the Government will exempt the individuals whose circumstances are outlined in the report from the bedroom tax?

I would hope so, simply because I know that Ministers have often repeated that the groups we describe really should not be subject to the spare room subsidy, or the bedroom tax, as everybody else calls it. I keep forgetting what we call it—that is it: the social sector size criteria. Ministers have often said that those people are exempt, but of course they are not. They are only generally not asked to pay because they qualify for DHP. As I pointed out, in the council areas where disability living allowance is counted as income in the means test, the very people that everybody in this House would hope are exempt from the policy are not exempt.

I commend the hon. Lady and her Committee for the report. Recommendation 18, which is highlighted in more detail on page 43 and is about discretionary housing payments and people in receipt of disability benefits, is perhaps one of the most powerful recommendations in her report. As the excellent Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), who is very sensitive to these important issues, is on the Front Bench today, may I reinforce her extremely powerful recommendation that the Government should issue revised guidance to local authorities to clear up the point about whether disability benefits should or should not be included in means-testing for eligibility for DHP awards? Clearly, local authorities are not doing the same thing and it is important to get standard practice across the country where possible. These issues are difficult enough, but they are magnified for those who are disabled.

The whole thrust of our report was to emphasise that we think people have ended up being affected by the policy who were never its intended targets. That is the hon. Gentleman’s point and I hope that the Minister is listening.

I, too, commend the hon. Lady and the Committee for this valuable report. Does she agree that the cross-party efforts to mitigate fully the impact of the bedroom tax in Scotland would be greatly aided if the UK Government were to allow the Scottish Government to raise the threshold for discretionary housing payments? Can she suggest how Government intransigence on this issue might be tackled?

We mentioned that in the report, because obviously the situation is different in Scotland and needs a solution there. Anything that will help to ensure that the Scottish Government are in a position to implement their policies is welcome, but I also know that there are discussions going on in Scotland about how else the situation can be mitigated for the people who live there.

I was just reflecting, in the context of the report, on the question of the evidence we have, if we have any, about people who suffer from disabilities and live in crowded accommodation who now have the opportunity to move to less crowded accommodation as a consequence of the Government’s policy. Would the hon. Lady like to comment on that?

Part of the problem, as we mention in the report, is that there are not enough houses for the people in houses that are deemed to be under-occupied to move into to release the larger houses, which is the Government’s policy intention. Unfortunately, the report was already agreed and printed by the time the BBC published the results of its investigation last week into the number of people who had moved, which discovered that the figure was only 6%. Although the intention of the policy was to free up larger houses, it seems that that has not really happened simply because there are not the smaller houses for people to move to. We found evidence that people who were desperate to move could not do so because there was no house for them, and they had no option but to absorb the extra costs. They were having to find what would have been paid in housing benefit from a very limited budget.

I congratulate my hon. Friend and her Committee on this excellent report. Of course, there are recommendations about benefit sanctions and we are about to have a detailed debate on that issue. In my constituency, benefit sanctions have more than doubled, increasing by 123%, and we understand that one in five of the people being sanctioned has a disability. Did the Committee hear evidence on that or does it have a view about the types of groups that are being affected by that policy?

Not specifically, because a lot of that will have been covered elsewhere, although there is some confusion about people who might be sanctioned in one part of the benefits system whose housing benefit should not be affected but sometimes is. However, we did not consider that specific issue in this report.

I am sure that the Chair of the Committee would agree that the topic was not the easiest one for the Committee to reach agreement on, as the record shows. Does she agree that one issue is that the reforms are still in their early days and it is hard to find the data to work out whether they are being as successful as we would perhaps all like? Further efforts are needed from local authorities, local housing associations and others to ensure we are making the best and most efficient use of the housing stock we have.

That is why we say in more than one of our recommendations that the Government need to encourage local authorities to collect data on how their housing stock is being used. We call for an analysis across councils of the availability of houses for people affected by the policy to move into.

I join in the congratulations to the hon. Lady and her Committee on this report. Did the Committee consider the definition of under-occupancy—for example, the expectation that a toddler should share with a teenager or the size of a box room that would be adequate to house two grown children?

We did look at that. We suggested that the use of the term “bedroom” was misleading and that the Government should use the term “bed space” instead, for exactly the reason that my hon. Friend mentions. Two older children may be expected to share a room that has been deemed to be a bedroom, but the room may be so small that only a cot would fit in it. That is also relevant to whether disabled people are properly housed and whether they are deemed to have a spare bedroom. The Government need to be much clearer in their definition of what is acceptable, the size of room that is acceptable and the area that two beds take up in determining whether there is under-occupancy.

Thank you for that report.

bill presented

football governance (No. 2) Bill

Presentation and First Reading (Standing Order No.57)

Damian Collins, supported by Mr Clive Betts, Tracey Crouch, Mr Jim Cunningham, Philip Davies, Paul Farrelly, Penny Mordaunt, Steve Rotheram, Mr Adrian Sanders, Mr Gerry Sutcliffe, Justin Tomlinson and Mr John Whittingdale, presented a Bill to require professional and semi-professional football clubs in England to disclose the identity of their owners; to give the Football Association powers to block the ownership of a club by anyone whom they consider is not a fit and proper person; to require all creditors of a football club to be compensated equally should the club go into administration; to facilitate the raising by supporters’ organisations of the finance required to acquire a controlling stake in a football club; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 6 June, and to be printed (Bill 198).