Cuts in Housing Benefit will cause hardship and increase homelessness, says Karen Buck

Beveridge, intellectual giant, architect of the post war welfare state, threw in the towel when it came to sorting out rent subsidy. The Beveridge report argued, not unreasonably, that any coherent national system of subsidising housing costs for those who could not afford them was not feasible while rents varied so greatly between different part of the United Kingdom.  The problem which confounded him has, if anything, intensified over the years. In the last three decades, to add to the intractable problem of regional variations in costs, governments of both colours pursued a deliberate policy of allowing Housing Benefit to ‘take the strain’ generated by decline in the provision of social rented housing.   Today, housing need is one of the great policy challenges of the century, with demand for affordable homes far outstripping supply and subsidy, in the form of Housing Benefit, going instead into the pockets of private landlords supplying the roof over the head of an ever increasing number of low income households.

Taken in isolation from wider housing policy, one can understand the concern at the rising bill, and recognise the sense of injustice amongst working families at the small number of very extreme cases of households claiming Housing Benefit in our most expensive neighbourhoods. Intuitively, it seems as though we have got it wrong and the system is ripe for reform.

Yet seeing where a policy is wrong does not necessarily help us get it right. The measures set out in the Coalition budget for cutting subsidy to low income households is draconian, runs counter to all attempts to create mixed communities and could easily create a crisis of homelessness.

To summarise the proposals, a cap on the highest  rents (mostly in  London) will be followed by a reduction in Local Housing Allowances everywhere in the country, with future up-rating limited too.  Working age households in private and social housing alike will see their benefit cut if they are deemed to have any spare bedrooms, and, in 2013 anyone on Jobseeker’s Allowance for a year loses 10% of their benefit.

The new maximum levels of benefit will have two possible consequences.  On the one hand, tenants could try and meet the difference out of the their low wages or benefits, drastically worsening poverty. On the other, they will be forced to move to the ever-reducing number of cheaper homes in cheaper neighbourhoods.  Even those hard-nosed Victorians recognised the importance of providing affordable homes in city centres, as the estates built by Octavia Hill, Peabody and the Sutton Trust testify. No more. Now poorer people must concentrate in poor places, leaving city centres to the better off, in an exercise in social engineering that would leave that great gerrymanderer, Shirley Porter, weak with envy.

Many will, of course, become homeless- raising the question of whether the government now intends to remove the homelessness safety net, as I fear they may. Ironically, hundreds of thousands of low income households in housing need are deliberately placed in the very homes now deemed too dear for them by councils keen to reduce the numbers technically designated as homeless.  What will happen to them?

In the slightly longer term, the proposed 10% cut in Housing Benefit for the long term unemployed will be at least as devastating, driving people into rent arrears and homelessness, and creating a nightmare for landlords- inevitably involving massive legal bills. Cutting benefits for tenants with a spare bedroom may also prove rather more painful than anticipated, not least because allowing those households who actively want to downsize to move has proved a near impossibility for councils. If they can’t cope with volunteers, there doesn’t seem much chance of coping with angry conscripts.

It is, of course, possible that downward pressure on benefits will force landlords to drop their rents, and I suspect there may be some places where that happens. I would cheer as loudly as the next person if it does. But it is not going to happen everywhere- not least because the ratcheting down of benefit levels is set to be a permanent process, if benefit levels are linked only to the lower index of inflation and bear no relationship in future to actual rent levels. Improving the supply of affordable homes is central to any realistic and non-punitive attempt to reduce Housing Benefit expenditure, as, of course, job opportunities and decent wages. Substantial cuts in  benefits as proposed will simply cause immeasurable hardship and increase homelessness and social polarisation.

The full implications of these benefit changes have not sunk in as the detailed figures are percolating out slowly.  They will come as a shock. Councillors, MPs and advice services face a uncomfortably hot summer next year if the proposals are not substantially modified during the cool of the autumn.  There will be many of us seeking to engage in this process before real damage gets done to huge numbers of vulnerable people.

Karen Buck is MP for Westminster North

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One Response to “Cuts in Housing Benefit will cause hardship and increase homelessness, says Karen Buck”

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