Hello world! and housing benefit…

Posted: June 3, 2011 in Benefits

They said that the new website needed a Director’s blog – so here is my first attempt.

What’s on my mind today is Housing Benefit, aka Local Housing Allowance. This is supposed to be a safety net benefit, something to keep people in their homes or allow them to have homes when their income is too low to cover the cost of rent. So far so good. LHA covers the cost of Council and Social housing rents for people living on benefits and is paid direct to Local Authority and Registered Social Landlords. This gives these landlords a secure income stream against which they can borrow to do things like repay the loans they took out to build the houses, keep the houses in a good state of repair, and even build more houses to rent out. People in privately rented homes generally have LHA paid to them which they then pay to their landlord, often adding a bit because the LHA doesn’t cover the whole cost of the rent.

There are lots of problems with both these arrangements. For the tenants whose rent is paid direct it can be a big deal to have to manage the rent money as well as their other living costs when they move off benefits and into work. But their homes are secure – so long as their benefit claim is maintained – and their rents are low and controlled which means the cost of the benefit to the state is also controlled. It goes without saying that there is a much bigger variation in private rents. This is especially true where people have begun to claim LHA when they were already tenants or when they have large families. It is these cases that have given rise to the claims that people are living in luxurious homes paid for by taxpayers on more modest incomes who could never aspire to such grandeur. This claim has been made repeatedly by Government spokesmen as a justification of the need to cap LHA. In fact very few people have ever received the vast sums – £2,000 per week – quoted and research in the official statistics shows only 160 households receiving more than £50,000 per year and DWP have admitted to “around 10 housing benefit claimants eligible for £1,917 or more per week”.

At Housing Justice we think that private landlords (or, more charitably, the rental market) are as much to blame for the rocketing housing benefit bill rather than tenants exploiting the system to live in luxury. Another culprit is the lack of social housing, and especially family-sized social housing. But against the backdrop of £2,000 week rent claims and the fact that a privately rented two bedroom flat can easily cost £300 per week in London it is difficult to drum up sympathy for the victims of the housing benefit caps which  have been introduced. Generally the response is that people should find work to cover the cost of their home or they should move to some where they can afford. But it is not easy to find a well paid job in these times of rising unemployment and low wages. Neither is  moving an easy option. For example, if the main bread winner of the family loses their job through ill health or redundancy, how quickly should they be expected to move? After a month, three months, a year? What about the schools, the community and family ties and support networks? The same is even more true for a single parent who depends much more on her support network and whose children really need the security of their established school. Yet in Kensington and Chelsea the Council acknowledge that most benefit recipients will not be able to afford private rented property in the borough once the caps have taken effect. Boris Johnson was ridiculed for talking about social cleansing of London’s wealthy boroughs but this is a still a real possibility. So if we haven’t succeeded in generating a head of popular steam to stop these changes (and so far, despite Boris and Crisis, Shelter, Homeless Link and ourselves, we haven’t) the next best thing to do is to plan how we can resist and respond. On 11th July the London Churches Group for Social Action is holding meeting to equip London Churches to cope with the housing benefit caps. It’s free and all are welcome. Details at: http://www.housingjustice.org.uk/events.php/60/housing-benefit-caps-equipping-the-london-churches


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