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kevin's picture
Joined: 09/03/2009

The Work and Pensions Select Committee has published its report into changes to Housing Benefit. The Report says there is still a level of uncertainty around the impact of the proposed changes to Housing Benefit and their cumulative effect on households.


The Report examines the wide-ranging reforms to the Housing Benefit system proposed by the Government, and in particular for claimants in the private rented sector, in receipt of Local Housing Allowance.

The Committee accepts the Government’s desire to slow the sharp rise in Housing Benefit costs, particularly in the private rented sector, and thereby to influence the private rental market. However, it expresses some concerns about the availability of private rented accommodation in certain localities, which tenants are likely to be able to secure at the new Housing Benefit levels.

The Chair of the Work and Pensions Committee, Anne Begg, said:

“It is difficult to judge at the moment to what extent Housing Benefit claimants will change their behaviour as a result of these proposals. The Government hopes that people will be able to find cheaper accommodation in cheaper areas and that private landlords will be willing to reduce their rents to Local Housing Allowance claimants, so that the new levels will not result in an increase in homelessness. 


However, it is too early to determine if this will happen in reality which is why it is hard say exactly what the impact of these changes will be.”<<


kevin's picture
Joined: 09/03/2009

Supporting People services are facing average cuts of 17% next year, hitting vulnerable groups such as mental health patients and homeless people.

Councils plan to cut their Supporting People programmes by between 26% and 37% over the next three years, a snapshot survey of English councils by homelessness umbrella body Homeless Link found.

This is well above the government's projection that councils will see their budgets cut by 4.4% on average in 2011-12, and well below the notional cut in Supporting People funding from government of 0.9%. This funding is not ring-fenced but rolled into councils' overall formula grant.


Now, charities that represent vulnerable groups are planning to jointly lobby councils against the cuts.

Homeless charities St Mungo's and Homeless Link will be linking with the Centre for Mental Health and others to put together a briefing note to be sent to councillors and lead officers outlining the long-term savings that can be made from Supporting People.

Research has shown that the programme generates annual savings of £3.4bn for the public purse, against a cost of £1.6bn a year, by intervening early to prevent people needing more acute services.

"We are already seeing providers who will have to close next year as a direct result of these spending cuts," said Drew Lindon, head of policy at Homeless Link.

"Our hopes are that where councils have to make cuts they are at the level government has made.

"Councils are in a difficult position, but they have to recognise the value of these services and to look at efficiencies within the council before any changes are made that will hit vulnerable people."

He urged councils to make cuts at the level suggested by government.

In a recent letter to councils<, the Department for Communities and Local Government acknowledged that the Supporting People budget was not ring-fenced, leaving councils free to decide how it should be spent. However, it said: "Ministers do not, however, expect authorities to respond to reductions in their budgets by passing on disproportionate cuts to other service providers, especially the voluntary sector."

Last year, the National Housing Federation warned that 400,000 vulnerable people could lose vital support under projected cuts by councils to their Supporting People programmes.<

Among planned cuts, Somerset has approved a £3m cut in its Supporting People programme from April 2011, representing an 18% reduction on its £16.5m budget allocation for 2010-11.<

kevin's picture
Joined: 09/03/2009

Campaigners and MPs have welcomed the government’s decision to commission an independent review of the impact of controversial cuts and reforms to housing benefits on disabled people and other minority groups.

Lord Freud, the minister for welfare reform, made a “firm commitment” to commission independent research into the impact of the reforms.

He said the research would look at the effect of the cuts on disabled people, homelessness, black and minority ethnic households and older people, among other areas.

The coalition government plans to reduce housing benefit by 10 per cent for anyone who has been on jobseeker’s allowance for a year.

It will also introduce a new cap on housing benefit payments, as well as new age limits so claimants under 35 – instead of 25 – will have to share flats or houses instead of being able to rent their own home.

The decision to commission an independent review was welcomed by RADAR.

But Marije Davidson, RADAR’s public affairs manager, said disabled people should be involved in developing the terms of reference for the review, and that the charity would “like to hear how the Department for Work and Pensions plans to involve disabled people throughout the review”.

The Commons work and pensions committee, which is led by the disabled MP Dame Anne Begg, also welcomed the review.
The committee had highlighted in a report how difficult it was to predict the effect of the changes and called on the government to “fully evaluate the impact”.

Witnesses told the committee that the housing benefit reforms would “inevitably” lead to “evictions and increased levels of homelessness” for some groups, including disabled people.
Dame Anne welcomed the government’s commitment to an independent review, which had been a “key recommendation” of the committee’s report.

She added: “At that time, I highlighted how difficult it is to predict exactly what the impact of these changes will be. We look forward to assessing the outcome of the review.”

The government’s formal response to the committee’s report is due later this month.<

anonymous (not verified)
anonymous's picture

Better Housing 22: Housing benefit and welfare reform: Impact of the proposed changes on black and minority ethnic communities

Sue Beasor for the Race Equality Foundation

The coalition government has introduced a package of measures intended to reduce the increasing cost of Housing Benefit (HB). This paper examines the impact of these cuts on black and minority ethnic communities. Living in areas targeted by the cuts, black and minority ethnic communities are also likely to experience higher child poverty rates and need larger accommodation due to family size. Furthermore, although some of the reductions in housing benefit do not apply to claimants with disabilities, there is evidence to suggest that black and minority ethnic disabled people are less likely to claim the benefits to which they are entitled.<

John's picture
Joined: 09/03/2008

Eric Pickles warns David Cameron of rise in homeless families risk

Full text of letter from the office of Eric Pickles

This is the full text of the leaked letter expressing concerns over the Government's welfare reform plans


Private Secretary to the Prime Minister

Dear Matthew,


As we discussed, I am writing in advance on the meeting of the Quad tomorrow covering the issue of the Overall Benefits Cap. My Secretary of State is attending the meeting taking place on Council Tax Benefit and is also likely to raise these issues given the implications it has for DCLG policies.

As you know we support the principle of the Overall Benefits Cap on the grounds of fairness. It is not right that a household on benefit should receive more than the average working household. However the specific implementation of the Overall Benefits Cap could cause some very serious practical issues for DCLG priorities.

Firstly we are concerned that the savings from this measure, currently estimated ay £270m savings p.a from 2014-2015 does not take account of the additional costs to local authorities (through homelessness and temporary accommodation). In fact we think it is likely that the policy as it stands will generate a net cost. In addition Local Authorities will have to calculate and administer reduced Housing Benefit to keep within the cap and this will mean both demands on resource and difficult handling locally.

Secondly, we are worried about the impact of this measure on our ability to build social housing for families through the new affordable rent product. To fund new affordable housing development providers need to be able to charge rents of up to 80% of the market levels but the impact of the Overall Benefit Cap will prevent them from doing so in many areas greatly reducing their financial capacity. Initial analysis suggests that of the 56,000 new affordable rent units up to 23,000 could be lost. And reductions would disproportionately affect family homes rather than small flats. For example it would be extremely difficult to fund any 4 bed properties, so desperately needed, anywhere in the country - disproportionately impacting on families and therefore children.

Finally, our modelling indicates that we could see an additional 20,000 homelessness acceptances as a result of the total benefit cap. This on top of the of the 20,000 additional acceptances already anticipated as a result of other changes to Housing Benefit. We are already seeing increased pressures on homelessness services. I understand that there may be a suggestion around requiring families to divert a percentage of their non-housing (benefit) income to cover housing costs. It is important not to underestimate the level of controversy that this would generate (likely to dwarf anything already seen on the HB only caps) and the difficulty of justifying this in policy terms as well as implementation.

However despite these issues we believe that there are ways to introduce this measure in a form which maintains the overall message whilst reducing the negative impacts outlined above. One of the most attractive options is to remove Child Benefit from the Overall Benefits Cap. This would be a fairer way to bring the benefits included in the Cap in line with working households, as a working household on the median £500 weekly earning would still receive child benefit on top of their income. This would also mean the overall message of the cap would not be lost. In practical terms it would also fit with the introduction of Universal Credit as Child Benefit will sit outside of this.

Just removing this one element would substantially reduce the negative impacts. The homelessness and child poverty risks set out above would be reduced - for example families with 4 children would be able to live in most parts of the country outside London and the South East. And it would also decrease the knock-on costs and impact on local authorities, and reduce the number of new affordable rent properties lost.

I should also mention that there are other measures which could reduce negative impacts, including calculating the median earning for families rather than households (which include single people) and an allowing a grace period before the Cap applies. We are also supportive of these.

Nico Heslop

Private Secretary to Eric Pickles