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Petitions

Volume 596: debated on Tuesday 9 June 2015

Petition

Tuesday 9 June 2015

Observations

Work and Pensions

Progress of the Affordable Homes Bill

The Petition of residents of the UK,

Declares that the Petitioners support the Affordable Homes Bill sponsored by Andrew George, further that the Petitioners believe that the bill should be allowed to progress and further that a petition in the St Ives constituency calling for the bill to be allowed to progress was signed by 1072 individuals.

The Petitioners therefore request that the House of Commons urges the Government to bring forward a money resolution to allow the Affordable Homes Bill to make progress.

And the Petitioners remain, etc.—[Presented by Andrew George, Official Report, 24 March 2015; Vol. 594, c. 1393.]

[P001466]

Observations from the Secretary of State for Work and Pensions:

It is worthwhile setting out the policy rationale behind extending the private rented sector size criteria conditions that have been in place for some time, to working age housing benefit recipients living in the social rented sector.

The Government firmly believe it is only fair that all working age housing benefit recipients should be treated the same. They should all face the same choices about affordability and where to live, no matter which rented sector they live in. That is why we removed what is often referred to as “the spare room subsidy” for social sector tenants. In effect this means the amount of housing benefit paid is restricted for those living in a property that is assessed as too large for their needs. This is not a tax on individuals, but a reduction in the level of state support for housing costs for those who under occupy.

Left unreformed the housing benefit bill would have spiralled out of control. It had increased by around 50% in real terms over a decade and in 2011-12 expenditure stood at £23 billion. The Government cannot expect taxpayers to continue to underwrite people’s housing costs regardless of the size of their accommodation. People receiving housing benefit who wish to remain in accommodation that is larger than their household requires, need to fund part of the cost themselves. This particular measure is helping to reduce that expenditure with savings of around £500 million a year during 2013-14 and 2014-15.

At the time of introduction there were around 820,000 spare rooms being paid for by the taxpayer at a time when almost a quarter of a million people were living in overcrowded accommodation with around 1.7 million on social housing waiting lists in England alone, now down to 1.4 million.

The Government believe the removal of the spare room subsidy is encouraging more effective use of social housing stock and a more strategic approach in both the allocation of property and, in the longer term, building programmes, ensuring more appropriately sized accommodation for the demand. It is in the interests of both social landlords and tenants to achieve a better match between housing need and the size of accommodation provided.

Had the Affordable Homes Bill become law, we calculated that the cost would have exceeded £1 billion. This figure was an estimate based on the abolition of the removal of spare room subsidy, which would have cost the tax-payer £500 million per year. However, as a result of the wording of the Bill, there would also have been the added cost of paying for ineligible service charges, paying full rent where there is a non-dependant who could contribute to housing costs, and extending these changes to housing benefit to those not impacted by the policy; namely, pensioners.

There would also have been cost implications for local authorities where they are required to assess an individual’s ability to share a bedroom, or where there is dispute regarding what constitutes a ‘reasonable offer’ of more suitable accommodation from either the local authority or social landlord.

In addition there would have been a requirement to find more than £1 billion of alternative saving measures from within the welfare budget, in order to ensure that these changes did not breach the welfare cap.

The Government are still committed to supporting those who face the greatest challenges in adjusting to welfare reform, which is why, in the previous Parliament; we significantly increased funding for discretionary housing payments to £345 million for the two years to April 2015. That included £115 million allocated specifically to support people affected by the removal of the spare room subsidy.

We maintain that use of discretionary housing payments offers a more flexible and cost effective approach than rigid and prescriptive legislation. They enable local authorities to provide additional support such as allowing extra time for those affected to find suitable alternative accommodation as well as providing longer term support for vulnerable claimants, such as those living in significantly adapted accommodation.

To date, the courts have consistently upheld the Government position on this policy, finding that we had fulfilled our public sector equality duties, the effects of the policy had been properly considered and that DHPs are an appropriate mitigation.

Had the Affordable Homes Bill been passed it would have increased the burden on the taxpayer, and reversed the efforts that the Government have taken to ensure fairness in the housing benefit system.