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Local Housing Allowance: Homeless Young People

Volume 671: debated on Tuesday 4 February 2020

[Mr Philip Hollobone in the Chair]

I beg to move,

That this House has considered local housing allowance rates for homeless young people.

It is a pleasure to serve under your chairship, Mr Hollobone.

Clearly, we have a severe homelessness crisis. The number of people sleeping rough on the streets of England has increased by a huge 165% since 2010, and 103,000 young people were homeless or at risk in 2017-18. In my own city of Brighton and Hove, the scandal and tragedy of homelessness is acute. Vulnerable young people are being let down, left to sleep on sofas, in hostels and on our pavements, cold, frightened and desperately unsafe.

The Minister himself has said, in answers to questions in the House, that the causes of homelessness are numerous, varied and complex. He is right. In the short time we have today, I will address the specific problems caused to vulnerable young people by the significant gap between the cost of renting in the private sector and the local housing allowance rates provided to the young people who need support.

Private renting is expensive, but because there is not enough social housing, young people are forced into the private rented sector as the only alternative to homelessness. The House of Commons Library points to evidence that in many areas, especially areas of high housing demand such as Brighton and Hove, there is a growing gap between the lowest private rents and the amount of local housing allowance. Young people in Brighton and Hove have a particularly hard time because the amount of LHA is calculated by lumping our city in with other towns in the locality where the cost of housing is much lower. The amount of housing support is therefore artificially depressed, leaving young people in an even more desperate position.

Research by the Chartered Institute of Housing illustrates the dire situation for young people. In Brighton and Hove, 30% of properties should be available at or below the LHA rate, yet LHA is so much lower than local rents that only 10% of shared properties and only 5% of one-bedroom properties are affordable. Evidence is also provided by the National Audit Office, which in 2017 concluded that housing benefit changes were contributing to an increase in homelessness.

As hon. Members know, the Government have taken some action. This April, there will be a one-off, 1.7% increase in LHA rates. That sounds positive until we look at what that means for the figures. In Brighton, young people will receive only £5 extra a month. That is a kick in the teeth for homeless young people who are already more than £140 a month short of the average rent for a room in a shared house, as I will explain. Furthermore, because the increase is a percentage, it locks in the freeze of the past four years.

To illustrate the point, the charity Centrepoint analysed the new LHA rates for 2020-21 alongside the average rental costs for the 247 local authorities where rental data are available. It found that, from April, a room in a shared house would be affordable only in three of those 247 local authority areas for those in receipt of the shared accommodation rate. Rightly and urgently, homelessness charities are calling for the local housing allowance, including the shared accommodation rate, to be set at the 30th percentile of local rents, as it was until 2012. I hope that the Minister will push the Treasury for the restoration of that link to rents.

My more specific purpose in securing today’s debate, however, is to urge the Minister to champion two other actions that will cost the Treasury relatively little, but will have a massive impact on two groups of extremely vulnerable young people. The first group to need the Minister’s help is homeless young people under the age of 25 who are ready to move on, but who are trapped in hostels because they cannot find anywhere to rent on the shared accommodation rate. In effect, therefore, they are left locked into emergency accommodation, unable to find a safe place to live and unable to move on. Moreover, in the process, they prevent those in urgent need from finding shelter at the emergency accommodation.

Young people under the age of 25 make up fully 44% of those living in supported accommodation. They end up trapped in hostels, because our welfare system is rife with age discrimination. If I am over the age of 25 and previously spent three months in a hostel, I will be given a higher local housing allowance to help me find a place to live, but if I am under 25 and in exactly the same situation, I still receive the lowest rate. Young people entering a homeless hostel at the age of 18, therefore, will have to wait as long as seven years before they benefit from the rate that would help them to move forward.

Why have the Government turned their back on vulnerable young people who so clearly need support to find a home? Young people experiencing homelessness cannot rely on the bank of mum and dad and cannot move back into the family home to save up, yet they receive the lowest minimum wage and the lowest benefit rate.

In 2018, the charity Depaul UK looked at the shared rooms available in 40 local authority areas in England where official statistics showed that a total of 225 young people were sleeping rough on a single night. Across those 40 areas, only 57 rooms were found to be available for young people at or below the shared accommodation rate. Nine of those 225 young people sleeping rough were in Brighton and Hove, but the research found literally no rooms in our city that were available within the shared accommodation rate for young people claiming benefits.

In Brighton and Hove, the shared accommodation rate for homeless young people is just £360 per month. If we search on Rightmove for shared rooms for that amount, I promise that all we get coming up on the website are parking spaces or garages. That is shameful. The average rent of a room in a shared house is £507 a month. That is a shortfall of more than £141 a month, leaving homeless under-25s unable to move out of a hostel and find somewhere safe to live. In the Prime Minister’s local authority, from April 2020 the monthly shortfall will be more than £236 a month. In the Minister’s own area of Colchester, the shortfall, as I am sure he knows, will be £153 for a homeless young person.

The Minister may ask why young homeless people need the exemption from the shared accommodation rate when the Government have introduced some measures intended to mitigate the impacts of LHA restrictions. For example, in answer to a recent written question, the Minister replied:

“For individuals who may require more support and whose circumstances may make it difficult for them to share accommodation, Discretionary Housing Payments are available.”

I urge the Minister, however, to consider the fact that discretionary housing payments, or DHPs, are not a sustainable solution. They are supposed to be a temporary measure until a household finds more affordable accommodation. Yet for homeless young people, affordable accommodation simply does not exist, due to the reduced rate of housing benefit that they receive.

Moreover, in order to access DHPs, young people need to approach their council or MP for support in applying, and many homeless young people at crisis point may simply not have the know-how or capacity to do that. Furthermore, the state already has the information needed to make a fair decision on providing extra support without forcing someone in that position to apply for discretionary and temporary help—the information is that being homeless and living in a hostel for three months is, in itself, qualification enough for needing more support, whatever age someone is.

Centrepoint, which works daily with young people aged 16 to 24 in that position, estimates that it would cost just £3.68 million a year for the Treasury to exempt such young people from the shared accommodation rate, giving them the higher one-bedroom rate and a chance to move on. That does not even take account of the savings that would accrue from providing stability—the cost of emergency accommodation is high, as is the cost to the state and the young person of the consequences of homelessness.

I appreciate that Ministers accept the logic of providing an exemption to the SAR to people in need, because they are able to find such funding for over-25s who are experiencing homelessness. All I am asking for today is that they will find it in their hearts and budgets to help younger homeless people too.

My second specific ask of the Minister relates to that group of young people who have left care. Care leavers deserve somewhere safe to call home. Many have experienced unspeakable trauma, and surely that is the least we can provide. Again, it is shocking that the local housing allowance received by care leavers drops on their 22nd birthday, putting them at risk of eviction and homelessness. When I say “drops”, I mean it literally plummets. In Brighton and Hove, there are about 300 care leavers aged between 17 and 21. On a care leaver’s 22nd birthday, what does the state do? It takes away £330 a month. In the Prime Minister’s area, a care leaver surviving in the private sector loses a whopping £437 a month. What a birthday gift to vulnerable young people who are on their own, having faced unimaginable trauma and difficulty.

The Government’s rationale for creating such instability, difficulty and risk for 22-year-old care leavers is not at all clear. Perhaps the Minister will explain. The policy seems strongly at odds with previous Government statements. For example, in 2016, the Government rightly accepted the moral obligation to provide care leavers with the support they need, stating:

“The government is passionate about improving the lives and life chances of care leavers. Young people leaving care constitute one of the most vulnerable groups in our society, and both government and wider society have a moral obligation to give them the support they need as they make the transition to adulthood and independent living.”

I could not agree more, and I urge the Minister simply to extend that understanding until a care leaver is 25.

Homelessness charities estimate that the number of care leavers aged 22 to 24 affected by the reduction in housing support is relatively small. The cost of extending their exemption from the low shared accommodation rate until the age of 25 would be in the region of £6 million. As with the previous ask for hostel leavers, it would save the Government money overall by reducing homelessness, distress and all the personal and financial costs associated with crisis management.

To try to demonstrate the genuine need for support for care leavers until the age of 25, I would like to tell the Minister about a case from my local area. A girl in both foster care and residential care was placed with foster carers from the age of 14; as a result, she built a solid relationship with the family she was finally placed with. She has learning difficulties, so any changes to her environment or living circumstances are destabilising. To her great credit, she found a job and established a good routine in the local area, and she maintained a tenancy on a bedsit. She was able to cover the rent between the LHA one-bed rate and her weekly wage. Since turning 22, she is in receipt of the lower shared room rate of local housing allowance. That means she does not have enough to cover the cost of rent each week from earnings and benefits. She is now at risk of homelessness.

It would cost just £3.7 million a year to give vulnerable homeless young people the chance to move on, and just £6 million to continue supporting care leavers with their housing costs until they are 25. That support would save the state money overall, because stable, supported young people could fulfil their potential rather than suffer in chaos and danger. Less than £10 million to make such a huge difference to young people’s lives is not a lot to ask. Will the Minister urgently meet with the homelessness charities and MPs to work on these specific asks ahead of the Budget—the critical moment? Will he use his influence with the Chancellor to provide that relatively small amount that would make a huge difference to young people in my constituency and right across the country?

It is a pleasure to serve under your chairmanship, Mr Hollobone, and I thank the hon. Member for Brighton, Pavilion (Caroline Lucas) for securing this important debate. Since my election in 2015, I have been passionate about tackling homelessness. Before my appointment as a Minister, I served as co-chair of the all-party parliamentary group on ending homelessness, where I engaged and built relationships with many brilliant charities, a number of which the hon. Lady mentioned, to work with them to end homelessness and rough sleeping.

Since my appointment as Minister, I have worked and continue to work closely with a number of those charities and other organisations to help to inform my work and that of my Department, to ensure that the Department for Work and Pensions does all we can to support those who are at risk of homelessness and that we are getting housing benefit right to provide the support that people need. As a Department we support the wider Government aims and ambitions to end rough sleeping and tackle wider homelessness.

My role as the Minister for welfare delivery has enabled me to go to all parts of the country, and subject to reappointment I look forward to continuing to do so. I have visited a number of charities and organisations around our great country that support those who have experience of homelessness and rough sleeping. That has enabled me to get a better understanding of those issues. I include among those organisations a number of arm’s length management organisations and housing associations that have a role to play.

The hon. Lady will no doubt recognise that this is not an issue that the Department for Work and Pensions can tackle alone. I am working with my counterparts in several Government Departments as part of cross-Government efforts to tackle this issue. Sadly, these debates are always far too short; I have no doubt that the hon. Lady and I could discuss this and associated issues at great length. We could probably spend most of the day talking about the issues she raised: rough sleeping and the broad rental market area in Brighton, local housing allowance, Centrepoint’s analysis and young people under 25 with experience of homelessness, as well, of course, as care leavers, not to mention the point she makes about social housing. I would very much welcome her at the Department to chat through some of those issues at greater length with officials, as appropriate.

I will try to cover as many of the issues as I can in the time left. First, we have to address the elephant in the room, which is the root cause of this issue: in parts of our country, we have massive supply and demand issues. The hon. Lady’s constituency is an example of that; my own constituency is another. As a result, although there are parts of the country where the ambition was to have the local housing allowance rates set at the 30th percentile, there are many parts of the country where the local housing allowance is sub-5%. That represents an issue. The root cause of that—my officials will not like me for saying it—is that successive Governments have failed to build enough houses, in particular affordable housing and homes for social rent. That is something we need to look at.

I congratulate the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing this important debate. On affordable housing, does the Minister share my concern about the research by the charity Crisis, which showed that cuts to housing benefit mean that in 94% of areas across the country, only one in five private rented properties are affordable to young single people? Obviously, we need to do much more to tackle that.

The hon. Lady is partly right; the solution is not just about local housing allowance. We can continue to pump money into housing benefit, which unfortunately in many parts of the country lines the pockets of private rented sector landlords. But if we are to tackle this in the long term, it is about affordable housing and a mixture of tenure between ownership, affordable housing, which is up to 80% of market rent, and homes for social rent, which is significantly lower. It is about addressing the supply issue as well as the demand issue, to ensure that we tackle the problem for the medium to long term. That is why the Department and I are working closely with the Ministry of Housing, Communities and Local Government, not to mention the other Government Departments involved. Between us, we hold the key—we hold the housing benefit bill, but they have a lot of the levers to address the supply side.

I commend the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing this debate. The Minister will be well aware that only something like 6,480 social rent properties were built in 2018. We have a huge undersupply, as the Minister highlights. The other day, Shelter told me that people are finding themselves under so much financial pressure that they cannot meet the rent, because of the low payment being given to them. People are moving from a two-bedroom to a one-bedroom and are doubling up in the properties. That is putting more pressure on single occupancy and double occupancy.

There is no question that the Government are committed to increasing the supply of social housing. Through the affordable homes programme to March 2022, we will deliver 250,000 new homes on a wide range of tenure. We will renew the affordable homes programme, building hundreds of thousands of new homes.

It is important to stress that, since 2010, we have delivered more than 464,000 new affordable homes, including 331,800 affordable homes for rent. As I said, I am working very closely with my counterparts at MHCLG on the interaction between housing supply and housing benefit. Until that supply is addressed, local housing allowance rates will continue to play a part. That is why we have increased LHA by 1.7%, in line with the consumer prices index. Of course, the ambition is to go further, and I personally would like to see it go back up to the 30th percentile. That comes, as I think I have said in response to written parliamentary questions, to the tune of about £1 billion. It is not a cheap intervention, so we have to address the supply issue alongside it.

The hon. Member for Brighton, Pavilion rightly raised the broad rental market area in Brighton. That is not an easy issue to address. There are 192 broad rental market areas and 960 local housing allowance rates, so looking at them is a considerable piece of work. I am doing that work, and it is important that we do so, but it cannot be done in one financial year. Unfortunately, since there are so many of these issues in all parts of the country, there are unintended consequences. However we draw the boundaries, there are winners and losers. I understand that there is an issue in Brighton at the moment. The same is true of Blackpool and, close to my constituency in Essex, of Jaywick, Frinton and Clacton. These issues do arise. I encourage the hon. Lady to write to me with the specifics—alternatively, I would be very happy to visit—so we can look at them in more detail.

I work very closely with Centrepoint, which is a wonderful charity. I have been on several visits and I intend to do far more. We have already done a considerable piece of work in this area. I can touch on the Government’s action on homelessness and local housing allowance, although I probably do not have enough time to go into the detail I would like. There have been considerable amelioration measures, such as discretionary housing payments, which we are increasing by a further £40 million this financial year to help local authorities support people where local housing allowance is not sufficient. Over the past three years we have also had targeted affordability funding; as I understand it, in the last financial year, that increased about 45% of shared accommodation rates by 3%. Nevertheless, I would like us to go further, and I think the steps we have taken to increase rates by CPI will make a difference.

The hon. Lady referred specifically to care leavers. We know that people leaving the care system can be particularly at risk of homelessness. We have provided £3.2 million per annum to 47 local authorities with the highest number of care leavers at risk of homelessness. That has led to a number of innovative ideas to support those leaving the care system into safe, secure and long-term housing. However, I understand the case put by Centrepoint, the hon. Lady and others about the rate. She suggested two items that would cost a little under £10 million. That is still a significant sum and would require Treasury approval. She may have got the impression that she is pushing against a half-open door. I am very sympathetic to that view, including in relation to those who have experience of homelessness. She asked me to commit to meeting charities and Members with specific interests in this area. I would of course be delighted to. Actually, I think a number of those meetings are already in train, but I will of course continue to do that.

On the shared accommodation rate, our approach is based broadly on the principle that young single people in the private rented sector should have their housing benefit limited to the rate appropriate for shared accommodation, but the hon. Lady rightly made the point that there are exceptional circumstances and there need to be exceptions to policy. We already have a number of exceptions, as she pointed out, but where there are opportunities for us to go further and there is a clear evidence base for doing so, of course we will look at that.

An obvious example of other interventions is the Homelessness Reduction Act 2017, which has enabled us to make great strides in the support that we can give to young people in particular. Many of them would not have been eligible under the previous system of priority need but now will be eligible on the basis of the duty to refer. The Act is making a huge difference, and I have no doubt that the hon. Lady knows that from speaking to her local authority, as I do to mine. We must ensure, through the MHCLG, that it is suitably resourced, but we know it is making a difference, including to young people. Importantly, the Act also places a duty on public bodies, including children’s services, youth offending institutions and youth offending teams, to ensure better partnership working. That is really important for ensuring that young people get the wraparound support they need.

The MHCLG is the lead on broader Government action on homelessness, but we very much support its efforts. The Government are committed to tackling homelessness and rough sleeping. As the hon. Lady will know, we committed in our manifesto to end rough sleeping by the end of this Parliament and to fully enforce the Homelessness Reduction Act.

There are a number of issues, including local housing allowance rates, that I would love to cover in more depth. As the hon. Lady rightly pointed out, we have an opportunity ahead of the fiscal event—the Budget—on 11 March to look at housing in the round. We are having conversations with the MHCLG and the Treasury to see how we can look at supply and the way that investment in supply—in particular supply of affordable homes and homes for social rent—would interact with our housing benefit bill. It pains me that we spend around 30% of our housing benefit bill on the private rented sector. It pains me even more that, because of LHA rates and other demand and supply issues, a percentage of that—I do not have a figure, but there is research to be done there—is spent on housing that I do not believe is of a standard that the taxpayer and the Government should fund or invest in.

In conclusion, I would be very happy indeed to work with the hon. Lady—

I really appreciate the Minister’s response, and I would very much like to take him up on his offer of meeting him and his officials. I know that he is broadly on side. He pointed to supply, which is very important—we need more affordable housing, particularly for rent—but we also need immediate action. As he knows, discretionary payments are not a sustainable solution. They are for moments of crisis; they are not for an ongoing payment situation. Right now, there are not any mitigating circumstances for the particular groups that I and Centrepoint have identified, so I urge him again to take up those cases.

I thank the hon. Lady for that intervention. As a Department, we set no timeframe or parameters for how long discretionary housing payments are available. We leave that up to local authorities. However, I very much take her point, and I thank her for the constructive way in which she has put the case for those two groups. There is a strong argument there, and I will have to take it away and work it up with officials, including by having conversations with Centrepoint and others.

We are committed to providing a strong safety net for those who need it. That is why we continue to spend more than £95 billion a year on working-age benefits, including around £23 billion to help people with their housing costs. We are meeting our manifesto commitment to end the benefit freeze and the freeze on local housing allowance rates. I hope the hon. Lady has got a sense of my passion on this issue and my desire to go further. That is why, as I have said a couple of times, work is under way between my Department and the MHCLG. Where there are opportunities to bring in Members from across the House and charities—charities have some really good ideas and quite reasonable requests of Government in this area, with strong cases—I am very happy to work with them.

Question put and agreed to.