Housing Benefit and the hypocrisy of Shapps

The public sector is inefficient and need the greater efficiencies, rigour, better and leaner management of the private sector and the like are comments we read daily and particularly from a Tory or Tory-led government.  Value for money is a central plank of their thinking and never more so in an age of austere cuts. We need to get the best and most cost-efficient use of tax payers money and that premise is a compelling and right argument.

“If I thought this [the local government funding settlement] would in any way increase homelessness and rough sleeping, I certainly would not support the moves we are making to ensure every taxpayer’s pound is spent more wisely.”

The above was Grant Shapps the Housing Minister’s memorable quote when challenged about the cuts to the Supporting People programme and “…the moves we are making to ensure every taxpayer’s pound is spent more wisely” is a comment that really exposes his duplicity.

The absolute hypocrisy of this statement is exposed in the rented housing market when we look at payments of Housing Benefit and especially its private sector component Local Housing Allowance or LHA. The latest official figures published in August reveal all and additionally, as they detail payments up to May 2011 they allow a picture of the first 12 months of the coalition in this regard.  The coalition has issued at least 11 different changes to Housing Benefit, some of which have yet to be implemented, yet all have the stated aim of reducing the horrendous HB bill.

The headline figures show that the overall HB bill has increased from £20.8bn in May 2010 to 22.25bn as at May 2011 – and increase of 6.6% and £1.4bn or a daily increase f £3.8m.  So much for reducing the overall HB bill then but we have seen an additional 127,000 or so added to the numbers in that time.

Look a bit closer and we see some alarming figures and trends.  The figures detail the last 30 months and so start from November 2008 to May 2011 and in that time the number of claimants in the private sector claiming LHA has risen dramatically from 1.05m to 1.55m a near 50% increase of 500,000 new claimants. The total claiming from the social sector (councils and associations) has increased from 3.11m to 3.32m a mere 6.9% increase of 215,000 or so.

In total the increase is 707,240 of which 497,280 or over 70% have come from private sector tenants and these receive on average £111.62 per week compared with £76.13 in the social sector – 47% more than social housing tenants for a much lower quality product.  Private tenants have much less security of tenure, often inferior quality accommodation, much less service in terms of repairs and many other lesser quality of product than a social housing tenant.   It’s also easy to forget that in the vast majority of cases if not all HB paid to social tenants covers 100% of the rent and on average the 47% higher LHA private tenants receive covers about 70% of the UK average rent for a private sector landlord (PSL) property.

Grant Shapps the Housing Minister was quick to rule out any regulation of PSLs when he came to office and this exposes the cost-efficiency hypocrisy.  Why should the public purse pay £3.27bn per year more to house benefit claimants in the private sector than it would if they were in a council house?

The government knows this huge additional sum is paid to private landlords for an inferior product and service yet it sees no need to interfere.  Sorry, let me be absolutely correct here it has imposed the HB caps of £250 – £400pw and made great play and spin of this.  What they fail to say is that this affects 14,303 properties nationally out of the 4,879,180 that claim HB – That is just 0.29% and these caps don’t affect the other 99.71% of HB claims.  Yes it’s great to detail the odd Somalian family getting £2000 per week to live in Kensington but not to base national policy on it.

The HB caps are largely a charade and mask the real issue – that the chronic undersupply of social housing is seeing private landlords fill the gap with inferior products and services at a huge financial premium to the public purse.

PSLs now account for 32% of rented accommodation benefit claims yet receive 41% of the total HB bill.

PSLs now have more tenants claiming HB than council tenants claiming HB at 1.552m to 1.462m.  30 months ago in November 2008 there were 1.493m council tenants claiming HB and just 1.054m private tenants.  This is a huge turnaround and increase in private tenants claiming housing benefit, and of course at a significantly increased cost to the public purse.  That trend is accelerating and just why 70% of new claimants live in the private sector is both puzzling – do private tenants suffer recession more harshly than social tenants? – and in financial terms very worrying.

The real question that needs to be asked of the general public is are you happy to pay £3.27bn more (and rising daily) to private landlords than to council landlords for the same product?

It is duplicitous of Grant Shapps and the rest of this government to question the cost-effectiveness of social sector housing and the public sector in general while ignoring the known huge excesses of the private sector in the delivery of rented housing

That quote again Mr Shapps – “the moves we are making to ensure every taxpayer’s pound is spent more wisely” – Hmmm!

Worth reading – Male DV

An article from last year by Mark Brooks of Mankind – well worth a read!

When the news appeared last week on the case of Dennis Long who stabbed his partner of 30 years to death and was subsequently jailed for four years and eight months, what was striking beyond the tragedy for all involved were the comments made by the judge and the media reporting.

Certainly I do not condone the actions of Long in any shape or form but there are issues that show there is still some way to go before male victims of domestic abuse are seen in equal terms to female victims.

When Judge John Milford was sentencing Long he said “You are a placid, unassertive, rather weak man”, as well as stating that as the bread-winner he should have permanently moved out of the family home.

The key litmus test is whether the judge would have made the same comments if the genders had been reversed. Rightly, I cannot see any possibility where a judge would say or even feel comfortable in stating that a woman who had been a victim of domestic abuse for 30 years was  “a rather weak woman”, but the judge felt comfortable in saying this to a male victim. The same applies when Long was told he should have left because he was the ‘breadwinner’ – an irrelevant issue. Would a judge say that if Long was female. I think not.

What is so appalling about these out-of-date, out-of-touch and sexist comments is that at its heart it places the responsibility on the victim not on the person carrying out the domestic abuse.  Male victims, like female victims, are not weak, and it sends out the wrong message to say they are. No wonder twice as many men as women choose not to tell anyone about the domestic abuse they are suffering when this is the attitude of the judiciary. No victim of domestic abuse, whether female or male, should ever be described in this way and the judge obviously needs a better understanding of the power and control that perpetrators hold over their victim.

In terms of the media reporting, Long was commonly described as being a ‘hen-pecked’ man, husband or killer. This was the headline or opening line in The Independent, Daily Mail, Daily Mirror and Daily Express and clearly based on a seaside postcard worldview which surely in
2010should not be still common currency. Again, it comes down to how male and female victims are viewed, because it can hardly be said that someone, as in Long’s case, who had been repeatedly beaten with an ornamental poker was ‘hen-pecked’. It trivialises what Long had gone through and again, headline writers would rightly never describe a woman in this way.

As a charity that supports male victims of domestic abuse, ManKind’s records show that around one in three calls are from mothers and sisters seeking help for their sons or brothers because they won’t pick up the phone themselves. A common reason for this is that the brother or son feels that he will not be taken seriously and worries about being portrayed as ‘weak’, so would rather suffer in silence at home than do anything about it.

When Judge Milford said that Long was weak, all he does is re-emphasise the feeling many male victims have and makes it harder for them to seek the help they need. That ultimately is why his comments are so damaging.

Mark Brooks is Chair of the ManKind Initiative charity.

14th October 2010

Link: – http://www.mankind.org.uk/biasedjudge.html

What is intensive housing management?

Intensive Housing Management (IHM) is the collective term for all the additional ‘services’ provided in supported housing or in sheltered housing over what is typically provided in general needs housing.

General Needs housing is your common or garden council flat or house which is rented unfurnished and is a self-contained unit for which you have exclusive occupation and exclusive possession of that unit.

So in sheltered housing you may have communal areas which are furnished and in some models a resident warden service. The provision of a furnished communal area and of a resident warden are additional to the standard services provided in general needs housing and are a simple way of describing intensive housing management or IHM.

IHM ‘services’ are also part of the tenancy agreement and are part of the provision of the housing rental and as such their costs are funded through Housing Benefit if they are eligible services

Supported Housing – comes in many forms and with many levels of IHM.  The most intensive IHM services are to be found in temporary and emergency housing models such as refuges and homeless hostels.  At their simplest form refuge and hostel need to be furnished as residents entering them dont have furnishings; and because many of them are emergency access services which admit new residents at any time of the day and every day of the year, they need resident staffing to achieve this.

A good example is refuge and hostel provision and below are just some of the necessary expenditure items that comprise intensive housing management in such a setting and are claimable from Housing Benefit:

Individual rooms need to have beds, mattresses, bedding, wardrobes, chests of drawers, cots, carpeting, waterproof mattress coverings, carpets and curtains (note all soft furnishings need to comply with fire retardency regulations and insurances also dictate this too). All fixtures such as beds, wardrobes etc., also need to be more durable than ones typically found in domestic settings such is the wear and tear they receive from having so many occupants in any year.  Increasingly in hostel settings social services departments are dictating such items as desks in all rooms for care leavers etc.

Communal areas typically comprise:

• a communal living area furnished with settees, coffee tables, TV, etc
• communal kitchens with all white goods, cutlery, crockery and all the usual things one finds in a domestic kitchen as well as fire blankets and fire extinguishers
• communal toilets and bathrooms – with sanitary hoppers as well as all usual domestic items found in bathrooms – additional requirements could include yearly water testing requirements and other health and safety matters
• communal laundry – commercial washers and dryers due to heavy usage
• communal areas such as stairs - all need carpeting and decoration and will have higher repair and decoration costs due to very heavy usage – also need emergency lighting and fire, smoke and CO2 alarms
• communal garden and playground area – childrens playground equipment is an eligible cost in making up the intensive housing management rent in refuges

Staffing – as emergency accommodation staff need to be on hand 24/7 and 365 days per year.  What is often overlooked in 24/7 provision is that unlike a Monday to Friday office provision staffing always needs to be covered and such services cant ‘make do’ if a member of staff is unable to come to work.  This means that each full-time equivalent (FTE) post is in fact 1.19 members of staff to cover holidays, sickness, training and other absences – and that 1.19 figure does not factor in maternity or paternity leave. Hence IHM staffing costs are much higher in 24/7 provision.

There are many more costs such as the internal decoration of the building usually lies with the support and IHM provider and not with the landlord.

The New Social Contract?

Jake Berry PPS to Grunt Shapps (with comment in italics)

In the light of disgraceful looting and rioting across England last week, it is
absolutely right that the Coalition Government should come forward promptly with proposals for stronger housing sanctions against those who choose to wreak havoc in people’s communities.

Why stronger HOUSING sanctions?  HOUSING sanctions can only be brought against tenants and not against those in home ownership.  This is a flawed premise and especially since only 30% of people are tenants can only be applied to 30% of the rioters.

At the heart of the motivations of those criminal looters, muggers and arsonists was a nihilist view – of being immune to any real consequence of their deeds, and lacking any sense of social responsibility for their actions.

Any real consequence? So the law and the courts are not a consequence?  This again is a flawed premise and the Tories not believing in the power of the courts…tut tut!

Tougher eviction powers are not a knee jerk reaction; rather they are another marker of this Government’s consistent commitment to better balance the rights of victims with the rights of those who inflict misery on their neighbours and whole communities.

Better balance?  How can they be a better balance when these HOUSING sanctions can only affect 30% of the nihilist miscreant scum?

As a housing lawyer prior to my election to Parliament, I have seen first hand the immense disruption and upset caused by the small number of people who are unwilling to function as responsible member of their community.

And are these small number of people all tenants then? I didn’t realise all crime and asb was committed only by tenants – so yet another flawed premise then!

Earlier this month, the Department for Communities and Local Government published a consultation on a fast-track mandatory power of possession. This would apply where tenants had already been convicted by another court of a serious housing-related offence, had breached an injunction taken out against them by their landlord, or had their property closed because of the criminal activity taking place within it. This would help landlords with their existing powers of eviction where tenants or their children commit anti-social and criminal acts in the vicinity of their home.

It is already the case that where tenants are evicted for anti-social behaviour, it is very likely that they will be deemed to have made themselves intentionally homeless and therefore the local councils will have no duty to provide new settled accommodation.

So you would rather see this criminal element in unsettled accommodation then?  You think this will lead to less criminality? Truly perverse logic!

Councils from across the political spectrum, including Hammersmith & Fulham, Greenwich, Nottingham, Salford, Wandsworth and Westminster have already pledged to use these eviction powers against such ‘neighbours from hell’ in the last week.

So as a housing lawyer please tell me where the law says you can retrospectively use laws that didn’t exist at the time of the committal of a crime?

However, where a tenant or a member of their household decides to wreak havoc in someone else’s community, those powers of eviction do not currently apply. This leaves open a significant loophole to ‘crime tourism’ – a criminal sidestepping such sanctions by simply travelling down the road to commit crime in a different neighbourhood.

And there was I under the impression that armed robbery and rape and murder were only committed in the immediate area of the perpetrator?
I’m learning more and more each day!

The Government is now proposing to extend landlords’ powers to seek possession where tenants have committed such crimes beyond the locality of their property. I am confident that the vast majority of people think that it’s right that landlords can seek to evict a tenant where they ruin the lives of those living around them.

Do you think tenants, in fact all members of the public irrespective of their housing tenure, wish to see ALL perpetrators of such crimes out of their locality, including those living in owner occupation?  Interesting how the ‘Neighbours from Hell’ TV programme has as many if not more owner occupiers as tenants being such Hellish neighbours too!

It is important to remember that the provision of social housing – subsidised rents with long or lifetime tenures – is a privilege not an inalienable right.

Ok let’s accept your premise that social housing is a privilege. Firstly, it only applies to less than one in five of the criminal rioters.  Secondly, why not use another universal privilege such as free access to NHS health care as a sanction – Then all miscreant looters / rioters can all EQUALLY feel the ‘full force of the law.’

Critics of these plans demonstrate an imperfect understanding both of the Government’s proposals and the application of human rights to the termination of tenancies. Under our proposals a landlord seeks possession against a tenant on the basis of a conviction for a crime committed away from the locality of their home, the courts would have to, just as they must at the moment, consider whether it is reasonable to grant possession. But this is stating the obvious: every legal case should be considered on its merits, and everyone has a right to a fair trial.

Does everyone have a right to receive just one fair trial – or are a select few such as tenants being subjected here to another trial?  Yet another flaw in the logic.

But I don’t accept the counsel of despair that says that tenants who have caused mayhem near someone else’s home rather than their own will never be evicted. That’s not my reading of reasonableness. Nor do I accept the contention that human rights law and considerations of proportionality mean that tenants who have caused misery through their anti-social and criminal behaviour means that they are protected from eviction, even where the landlord has an unqualified right of possession in domestic law.

The Supreme Court has emphasised in recent judgments the strong presumption that, if local authority landlords have followed proper procedures it will normally be proportionate to make a possession order. The court will give a lot of weight to the local authority’s legitimate aims in seeking possession.

That presumes that a council has a legitimate aim surely? Yet the whole concept of ‘legitimacy’ has been brought into question this week and particular so with the actions of Wandsworth Council.. (more below)

The threshold for a successful Article 8 challenge is extremely high and will only rarely be made out. Indeed, rights cut both ways. Article 8 explicitly states that public authorities can intervene in the interests of public safety, for the prevention of disorder and crime and for the protection of rights and freedoms of others. Law-abiding citizens have a right to conduct their lives and run their businesses without fear of being burgled, mugged or their homes and properties ransacked or set ablaze.

True –law-abiding citizens like the Mother in the Wandsworth case and the 8 year-old daughter in that case should not have their lives put in danger of vigilante action caused by the obscene and politically motivated actions of Wandsworth Council who (a) notify the press ahead of serving a legal document, and (b) either notify the press or give enough information out to identify the law-abiding Mother and child and place them at risk!  The fact that this was made public before any conviction was made by the courts is the very essence of political illegitimacy.

Tougher eviction powers will provide a real deterrent against future crime. And once such criminals are evicted, a social home will be freed up for a deserving, law-abiding family on the waiting list.

So could the Mother in the Wandsworth case – assuming her son is convicted – apply for a council house without him as she is a law-abiding citizen?  Hmmm!

With such lists having almost doubled to 1.8 million under the Labour Government, (so no linkage there with 2.5m council houses sold under the Tory right to buy?) this will obviously just be a tiny step in the broader mission of increasing access to social housing to those in need. But it is the social contract in action – the state giving a helping hand to those who play by the rules, and withdrawing special privilege from those who wish to harm others in defiance of social responsibility.

Social Contract – I don’t think this government wishes to debate its Rousseauesque qualities per se. And I notice the ‘bleeding obvious’ of course that this government is seeking to change the tenure contract simply because it doesn’t say that rioters or looters will be evicted. Ergo, how can tenants therefore be in breach of said contract! But returning to ‘social responsibility’  there is no such thing as society, non?

Rent cuts of 24% – 65% for hostels and refuges

The proposed changes to rent payments in supported housing are a real concern.  I have detailed 5 examples below and these reveal that even on a generous interpretation of the proposals that cuts range between 24% and 65% and all services become non-financially viable and will close.

All of these services currently receive less than the national average ‘exempt and supported accommodation’ rent or ESA rent of £184 per week and so those that are on average or above the national average ESA rent will lose even more.

I give worked examples below of five real services comparing their rental income now and what is proposed by these imposed DWP changes.  The scale of these reductions is stark and these huge cuts are additional to reductions in support income, the only other funding stream in all these cases, through SP cuts.

Existing payments are based on a transparent and highly scrutinised look at the costs of running hostels and refuges such as the furnished accommodation and other expenditure costs not lest being staffed on a 24/7 basis for emergency admissions and resident safety.

Proposed changes the DWP wants to implement are a flat-rate payment based on local housing allowance (LHA) to take away the complexity and ease of understanding they claim the current system has.  The options include LHA alone or LHA and a percentage on top and I have used 20% and 40% enhancements in the table below.

Table 1 – Worked examples

	Service A	Service B	Service C	Service D	Service E
Current £	£158,000	£281,000	£179,000	£552,000	£124,000
LHA only	£68,000	£153,000	£73,000	£252,000	£43,000
LHA + 20%	£82,000	£183,000	£88,000	£303,000	£51,000
LHA + 40%	£95,000	£214,000	£102,000	£353,000	£64,000
Min cut	£63,000 (40%)	£67,000 (24%)	£77,000 (40%)	£199,000 (36%)	£60,000 (52%)
Max cut	£90k (57%)	£128k (59%)	£106k (59%)	£300k (54%)	£81k (65%)

All of the above services are either homeless hostels or refuges for women fleeing violence and are necessarily furnished and have staff on duty 24/7 as they are all emergency or direct access services.

The DWP paper on ESA rent changes states that overall the impact will be cost neutral and this must mean that DWP wish to sweep money away from what it calls ‘conventional’ supported housing, which the above are, to what it labels ‘specialist’ supported housing such as provision for those with disabilities.

Yet that is perverse.  According to DWP these ‘conventional’ supported  housing services have higher (intensive) housing need than the ‘specialist’  services which have higher support and care needs.  So DWP is intent on paying higher housing funding to those services with lower intensive housing management need!

Intensive housing management (IHM) is the term used to describe the higher housing management services and its higher expenditure cost and temporary provision such as hostels and refuge provide a simple explanation.  These need:

• To be furnished – you don’t flee violence with the kitchen sink strapped to your back,
• To have each room furnished and communal areas including kitchen and laundry,
• Often open 24/7 to admit on an emergency access basis and hence need staff 24/7,
• To have shorter repair response times due to health and safety and according to HCorp guidelines
• To have higher decoration and wear and tear budgets due to turnover of residents
• To have higher all-round housing management input due to turnover of residents.

So what the DWP labels as ‘conventional’ supported housing has much higher intensive housing management costs than ‘specialist’ supported housing such as disability services (Supported Living) which doesn’t need such furnishings and are a long-term provision.  Note that under Housing Benefit Regulations (HBR) anything that becomes  the property of the resident is not claimable and only furnishings that don’t  become the residents property (such as in a hostel and refuge) are claimable and paid for.

Why will (‘conventional’) hostel and refuge provision close – It’s not just the severity of the financial reductions to rental income, or even the  added cuts such services face in its only other funding which is SP for support.  It’s the fact that even if they remodel drastically and scale back staffing they can’t fulfil their purpose.

Hostels and refuges can’t meet their purpose if they are unfurnished, if they are not open 24/7 and if they don’t have staff attendance it’s that simple.  Cuts of 24% – 65% in their housing income mean they can’t operate and  function as they need to do.  Some refuges do operate without 24/7 staffing using on-call systems out of hours I hear you say.  Yes they do but these 24% - 65% cuts to such services definitively mean savage cuts to Monday to Friday ‘office hours’ and so such refuges become non-functional.  Residents would spend longer there and so bed-block those wanting and needing to go there.  How many more would be forced to continue to be abused due to non-availability?

The DWP proposals to replace ESA rent with LHA simply can’t work for hostels and refuges (and a refuge is a hostel under HB regulations.)

The DWP’s own LHA website www.direct.gov.uk/en/Diol1/DoItOnline/DG_196239) even says that LHA is not suitable for hostels when it says “LHA direct is not suitable for everyone” and goes on to mention in a bullet point “someone living in a hostel.”

While the DWP paper on ESA rent says that a percentage may be needed on top of LHA to ensure that such services have the income they need to function reasonably the table above shows this would need to be LHA+84% in Service B right up to LHA+188% in Service E – not the figures that DWP care to admit or will pay, and remember all these services are currently BELOW the national average ESA rent of £184pw so higher levels would be needed than these!

Unless hostel and refuge providers rally together and fight this perverse and offensive and ill-thought through set of proposals from DWP they will close.

Why hostels and DV refuges will close (2)

I have blogged on here that the changes the DWP wishes to impose on exempt and supported accommodation (ESA) rents are wrong and will have negative consequences particularly for hostels and refuges.

An update to other proposed HB reforms was issued yesterday, by way of an Explanatory Note, concerning the move from under-25s to under-35s now getting the shared room rate and not the 1 bed rate. This made two exemptions to this change these being (some) rough sleepers in limited circumstances and to high-end ex-offenders such as arsonists and sex offenders covered by MAPPA.

These exemptions cast some light and strong inference on those who will be exempted from the DWP move from ESA rent to LHA-based rent, and of course who won’t be exempted.

Those single people who won’t be exempted and we must assume only be guaranteed the shared room rate of LHA in the future include the following:

1. Single women fleeing domestic violence and abuse
2. Offenders not covered by MAPPA arrangements (ie the less serious ex-offenders)
3. Single homeless persons with no offending history
4. Single homeless persons aged under-35
- And many others

All of the above tend to inhabit hostel and refuge and receive ESA rent which averages £184 according to the DWP research paper. Note that as they are entitled to this under current law that is HB regulations, then payment of this is a mandatory entitlement. They will in the future receive the shared room rate of LHA which ranges nationally from about £55pw in the West Midlands to £79pw in Brighton in the South East. (The London rate is £124.)

So excepting the London rate the client groups mentioned above including a single woman fleeing domestic violence and abuse will receive less than 50% of their rent. That is all they will be guaranteed under the DWP imposed LHA replacement plans. Rather than discuss emotive arguments that a serious sex offender has more chance of accommodation than a single woman fleeing violence and abuse, however valid a reality that is, let us look at the implications and the consequences of this policy.

A refuge provider will have little choice but to change policy and not admit any single women without children fleeing violence and abuse. This is because such clients only attract between £55 and £79 in rent payments against a rent of £184. Even if the DWP decide to replacement ESA rent with LHA+25% – one of the options – then they still ‘attract’ a rent benefit of between £69 and £99 and this is still woefully short of the rent figure of £184.

What this paper does is replace a mandatory entitlement that is based on very transparent and actual costing with one that is on average at £67pw a whopping 64% less than is now paid. As an aside imagine if this was applied to all single persons in ESA and we would see pensioners all having to find extra money each week to put towards rent and the outrageousness of this imposition from DWP in put in context.

I’m sure many will say that the young single people are mostly miscreants that riot and why should we care that ex-offenders aren’t given another handout from the state and similar arguments that NIMBY client groups often attract. But as we can see this affects only the least dangerous ex-offenders and the serious offenders are better looked after, AND critically single women fleeing violence and abuse – the antithesis of a NIMBY client group – will have nowhere to go.

The DWP expect or rather hope that local authorities will decide to top up this LHA replacement for single women fleeing violence and abuse. Aside from this being ‘localism’ in action it flatly contradicts one of the key drivers for the change to LHA that the DWP attempt to make in the consultation paper.

The last bullet point at 11 entitled “The need for Reform” states:-

• It is costly to many local authorities who often have to meet some of the Housing Benefit costs for expensive properties themselves.

Well it’s a hell of a lot more costly to local authorities in this DWP imposed solution!

Further this is imposing a 66% on average reduction to a mandatory benefit entitlement and replacing it with a ‘hope’ or expectation that local government tops this up with some discretionary funding.

This recycling of the chopping of ESA rents is the purported funding for this ‘discretionary’ top-up system for local government. So all the 64% reductions they take off single people are to be given to local government to decide who should receive them. I return now to the 4 client groups listed earlier in this paper:

1. Single women fleeing domestic violence and abuse
2. Offenders not covered by MAPPA arrangements (ie the less serious ex-offenders)
3. Single homeless persons with no offending history
4. Single homeless persons aged under-35

None of the above client groups is likely to have care funding or be part of a mandatory duty for a local authority. Yet some others will including all of the ‘supported living’ model of care clients such as those with learning disabilities or mental health issues. Deserving groups of course but that is not the issue. If local authorities pay these groups that they have mandatory spend duties for more in housing payments, it reduces the amount of care funding from existing LA care budgets they have to put in.

Are LA commissioners going to fund those they have mandatory duties to support and care or are they going to use this recycled ESA HB to fund discretionary client groups such as single women fleeing violence or NIMBY groups? That’s a rhetorical question of course as the funding will be use for mandatory spend client groups and NOT on single women fleeing violence or single groups entering homeless hostels and foyers.

The result is inevitable and hostel and refuge provision will close, or more correctly will be forced to close as it will be chronically underfunded.

 

HB reforms and further proof why hostel and refuges will close

Today we have an important update from DWP on the imposition of changing the shared room rate (SRR) of HB and LHA from the under 25s to the under 35s which will be implemented in January 2012.

The document is entitled “EXPLANATORY MEMORANDUM TO THE HOUSING BENEFIT (AMENDMENT) REGULATIONS 2011 – 2011 No. 1736 and the document makes two exemptions to the age increase to 35.

The first is to ex-offenders who are covered by MAPPA and the second is to rough sleepers (with some qualifications.)

“MAPPA are the statutory arrangements for managing sexual and violent offenders. It is a mechanism through which agencies discharge their statutory responsibilities and protect the public in a co-ordinated manner.”

So violent and sexual offenders are covered with this exemption.  Yet a single woman fleeing domestic violence aged 25 – 34 is not!!

More significant in this explanatory memorandum is that the DWP expects to see its changes to a LHA based funding mechanism for supported housing means that a single woman entering a refuge and a single person entering a homeless hostel is to receive LHA at the SRR.

Lets look at typical existing exempt and supported accommodation (ESA) rents and typical existing LHA rates to explain the massive financial impact.

The DWP research paper 714 on which the DWP paper is based had a national average ESA rent of £184pw (see fig 4.10 on page 48) and that level of rent is not untypical nationally.

The DWP is now proposing to change this mandatory level of payment as regulated by HB to the LHA shared room rate (LHASRR) which ranges from £55pw or so in West Midlands to £79pw in Brighton in the South East.  (London has it set at £124 or so pw yet this is an exceptional level compared with the rest of the country including the South East.)

The DWP by failing to exclude single women fleeing violence will see from January 2012 a rate of between £55 and £79pw being paid to a refuge as the guarantee and a hope that the local council through discretionary housing payments will make up the rest of the rent – about £120pw.

Refuge providers can of course not rely on this being paid and local councils may not pay and so the only operational route open is not to admit a single woman fleeing domestic violence and abuse!!!

Similarly in a single homeless hostel – those ex-offenders  subject to MAPPA and an incredibly limited amount of ‘rough sleepers’ will be guaranteed the 1-bed rate (typically £95 in NW to £144 in SE) and local councils ‘expected’ to make up the difference from DHPs.

Even worse is those not exempted, which includes the vast majority of residents at single homeless hostels will get the LHASRR of £55 – £79 toward a rent of typically £184.  The balance again of £105 – £179 the DWP ‘hope’ will be made up by discretionary housing payments locally.

Anyone who believes such DHPs will be paid locally when they are by definition discretionary resides in cloud cuckoo land. If LAs are raiding discretionary spend budgets such as SP to use for mandatory spends elsewhere, which they are, then why would a local authority pay discretionary amounts here?  They wont of course and the DHP budget they are given will not cover all these ESA rents.

Any DHP budget received by LAs will be spent by LAs on those supported housing schemes known as ‘supported living’ which are typical group homes where those with disabilities reside and critically have assessed care needs by the LA.  In doing so the LAs reduce the amounts they have to pay out of other budgets such as care.

Single homeless hostels have no financial sustainability under these plans at all and they will close in their droves.

What will happen to them and to single women fleeing violence and abuse?

I don’t even want to speculate at the huge public purse cost to health and social care to the criminal justice system and other branches of the public purse.  Rather what is known and can readily be deduced from this explanatory note is that this government is willing to let huge numbers of single homeless and other hostels close and allow single women to continue to be abused until they either die or reproduce.

 

The inadvertant return of the resident warden?

I have blogged vociferously against the DWP paper as it will have a massive negative effect on supported housing and especially hostel and refuge provision (see elsewhere on here.)  I can easily foresee 20% of hostels and refuges closing within 12 months if the DWP proposals are brought in to replace exempt accommodation HB with LHA.

Yet could the DWP paper on rents in supported housing inadvertently bring back resident wardens into sheltered housing?

The DWP paper bizarrely labels ‘purpose-built’ sheltered housing – which I presume means cat 2 and extra care (see below for definitions) - in with hostel and refuge as similar and for all of these services wishes to pay LHA as a
replacement.  Yet LHA rates tend to be at least 25% more than existing sheltered housing and so resident wardens could be affordable and funded this way.

Nationally average HB payments to the over 60s (ie sheltered) is £77pw and with average LHA of £114 pw.  The DWP recognises the higher housing management cost of ‘purpose-built’ sheltered housing and so could this
scope for rent increases on social rent to match the LHA rate be used to bring back resident wardens?

Using the above figures the scope for an increase in rent payment is £37pw and a small 20 bed ‘purpose-built’ sheltered scheme would cover all costs of a resident warden. The LHA based flat-rate that DWP wishes to introduce (inadvertently) sets a target increase in one respect and its inclusion by DWP can be seen as a political priority of this government – It’s ok to increase purpose-built sheltered rents up to the LHA rate is in effect what this government is saying. Given that 40%+ of the electorate is the ‘grey vote’ the idea is not as strange as it sounds.

Social landlords may well have noticed that current sheltered rents are below LHA and seen the (inadvertent) permissible scope for rent increases from the DWP in this paper.  Increasing rents in sheltered housing is a political hot potato yet if social landlords do increase rents and do use this extra revenue to bring back resident wardens then much of the political and reputational risk goes away.  Note too that as such an increase would be seen as what the DWP paper calls the ‘added cost’ of housing management in supported housing it would be akin to a service charge which is not restricted or constrained by RPI+0.5% or other core rent restriction.  So such an increase is possible.

What the DWP has done inadvertently here is present an opportunity to all social landlords to declare all their sheltered units as ‘purpose-built’ and give them the opportunity to receive the additional funding that would pay
in most cases for resident wardens.  If this is done the HB bill will rocket and that confirms the inadvertent tag in this analysis.

The DWP estimate there are just 170,000 people who reside in and claim exempt and supported accommodation (ESA) rent levels.  Yet we know there are 750,000 older persons getting support through SP so there are many more that don’t claim sheltered housing as ‘exempt.’  The DWP also maintains that the overall ‘added cost’ of ESA for these 170,000 is between £70m and £130m per annum.  Add on 250,000 new sheltered claims at £37pw and we see an increase of more than £480m.  Something I’m pretty confident this government didn’t expect from this stated ‘cost-neutral’ imposed change to LHA.

__________________________________________________________________

Terminology:
- Sheltered housing has 3 principle models of non-resident wardens (cat 1), resident wardens (cat 2) and extra care (that had the stupid name of cat 2.5).
Sheltered housing is often (wrongly) seen as the same as supported housing, which is in fact an umbrella term for supported housing, sheltered housing and the Supported Living model of care. So the umbrella term “Supported Housing” includes hostel, refuge and others, 3 variants of ‘sheltered’ housing and ‘supported living’ services

DWP paper on rents – The Need for Reform is bunk! – Updated 2 Sept 2011

The DWP has issued a purported consultation paper on reforming the way rent is paid for in supported housing.  This is in reality a nonsultation as the DWP is seeking to impose quite radical change that will severely threaten the financial viability of many supported housing services and especially hostel and refuge.

This paper looks at the DWP claims as to why the current system should change – what DWP calls the ‘need for reform.’

At points 10 and 11 on page 10 under the section entitled ‘The need for reform’ the DWP paper states the current system isn’t working and goes on to give numerous reasons for this.  It says:

10.       The Government is committed to supporting vulnerable, older and disabled people to exercise choice and control and lead independent lives. We believe that, with the right levels of support, everyone including disabled people can play a full part in society

 11.        The current Housing Benefit system for people in supported housing no longer works:

It is time to look at the validity of the claims that the current system isn’t working and each of these 5 purported reasons will be looked at below.  However, the DWP allude strongly to vulnerable, older and disabled people ‘exercising choice and control’ and this is nonsensical as my previous blogs have stated:  see  http://wp.me/p1vuvL-k, and http://wp.me/p1vuvL-o and http://wp.me/p1vuvL-q and especially http://wp.me/p1vuvL-i.  Choice and control depends upon there being an adequate supply of hostel and refuge provision and doesnt apply to that aspect of supported housing.  Choice and control may apply to the supported living schemes set up where care provision and care funding is in place but not in supported housing services that are only funded through HB and SP payments.

The DWP paper focuses exclusively upon the demand side of the equation and assumes the supply side – simply the continued supply of accommodation for all in supported housing need – remains constant or increases.  The supply of accommodation will however reduce and reduce markedly with the imposition of the Personalisation Agenda which the DWP wishes to impose in this paper.

I now turn to look at the DWP 5 reasons and why it says the current system isn’t working

Firstly, DWP claim: “The processing of these benefit claims has become too complicated often resulting in time consuming and intrusive investigation of a person’s care and support needs, as well as the provider’s status and how the care and support is delivered.

The process involves the reasonable, realistic and justifiable intensive housing management need of the service.   And so it should be transparent, accurate and reflect what is needed for the service itself.  The current process does not include any investigation, let alone an intrusive one of an individual’s care and support need.  Even if it did in error the individuals personal needs are (a) only looked at after the provider’s status is determined, and (b) after the care and support delivery of the provider is looked at, to determine no care or support cost is sneaked into the housing management claim.

Further it only applies to the supported living model of care and those services in which mandatory care payments are made.  As such the DWP wishes to change housing provision to meet the housing needs of those with mandatory care payments and impose this upon the majority of supported housing residents who dont have care needs or get care payments.

The needs of the small minority being imposed on the vast majority is what this paper seeks!

The DWP has simply got it wrong and there is no intrusive personal aspect of the claim and decision-making process.  Yes, it is complex and can be time-consuming, but the end result is a justifiable and reasonable cost that is accurate and has been very closely scrutinised.  In short, the current system works very well.

Perhaps the best way to emphasise this is by looking at the HB decision-maker.  He or she agrees to a rent level that is likely to be higher than normal – to reflect the added costs of furnishing or staffing or whatever – knowing that this will be flagged up when the council is audited.  Why is that rent so out of kilter will be the external auditor’s first question?  The decision-maker knows in agreeing the rent figure to be reasonable and justifiable that he or she will need to be able to justify this ‘added cost’ to the external auditor.  Would any HB decision-maker simply agree a high rent level if he or she wasn’t convinced it was justifiable and accurate?  Of course not!

Secondly, the DWP state: “It is incompatible with other government policies as linking housing with care provision in legislation mirrors that for care homes where residents are ineligible for Housing Benefit. It does not fit with the Government’s wider objective of personal budgets, where individuals are enabled to exercise choice in commissioning their own care.”

As explained previously and as the DWP’s own research paper states only 40,000 of the 170,000 resident in exempt and supported accommodation can access a personal budget (PB).  Currently, less than 50% of those with assessed care need receive a PB and even if all 40,000 did, this would mean that the current system is incompatible with just 24% of those residing in ESA, which of course means that it is compatible with the other 76%.

Again we see the DWP wishing to impose change on the vast majority for the alleged benefit of the small minority!

Unless the DWP is going to make PBs accessible to all in ESA – and it can’t do that without assessing the care needs of the other 130,000 at a rough cost of £390m (3k each) just for assessment costs!! – Then this DWP rationale for change is truly bizarre and unwarranted.

Thirdly, the DWP states “It can be unfair in that it does not provide extra help to those requiring personal care or support whose landlord is not one of the prescribed types, but who have additional housing costs because of their condition. These claimants currently face the same rent restriction rules as other private sector tenants in mainstream housing.”

Yes, it can be unfair in such circumstances and the specific circumstance is the definition of provider type in exempt HB regulations.  In simple terms DWP maintains private landlords cannot deliver ‘exempt accommodation.’  The obvious answer is to do away with what seems to be discriminatory and so allow private landlords to deliver what is now called exempt provision. A simple solution that would also see private landlords delivering support and care services and remove the constraint.

The reality however is different. A private landlord can lease a property to a charity or not-for-profit support provider and the lease costs include many of the ‘intensive housing management” costs such as furnishings.  In fact a private landlord could set up his or her own ‘not-for-profit’ company and deliver both the intensive housing management and support – the support costs being met from
elsewhere.  So it is not accurate to say that claimants must face the same rules as other private tenants.  In summary this could be changed quickly by the simple change of one HB regulation so that PSLs can deliver exempt provision and so the objection and rationale is a false one.

Fourthly, the DWP state “It creates unnecessary risk as specialist housing providers are said to be reluctant to invest in this housing sector due to uncertainty around how help with their rents will be determined. There is the potential for schemes to become financially unviable, which would leave vulnerable people without the specialist provision they need.”

If ‘so-called’ specialist housing providers are not aware of how ESA is treated under HB regulations then that is their fault!! Excuse the harshness of how that reads but it must hold.  I would not develop any business model without knowing and finding out all I could as to my income!

I cannot figure out what the DWP means by saying “There is the potential for (existing) schemes to become financially unviable.”  It must mean existing schemes and hence my emphasis, yet how can they or will they become financially unviable under the current regulations?  That by definition is an oxymoron!

Far greater financial unviability is created by the proposed reforms of this paper which I restate are geared toward the maximum 24% of services to which PBs can apply and are detrimental to the other 76% – who currently comprise 88% (as only half of the 24% have taken up PBs)!!

Fifthly, DWP state: “It is costly to many local authorities who often have to meet some of the Housing Benefit costs for expensive properties themselves”

Read these words carefully!!  Currently, local authorities do HAVE to meet some of these costs.  Yet this paper proposes that they no longer have to, but can choose whether to!!

I restate my argument of above – the costs are only met once the LA HB decision-maker is happy that the costs are accurate, reasonable and justifiable to the external auditor.  So these costs have already been approved and are known to the local authority.  This is not a fault or flaw within the existing system it is a very well scrutinised asset of it.

Yet the change of emphasis here is a critical change as this makes a higher proportion of supported housing rents will be discretionary spend for local authorities.  That creates massive risk to financial viability and will not just see those curently in the ‘market’ review their position, it would actively discourage those seekign to enter the market from doing so.

In summary, the 5 principal rationales given by the DWP as to why the current system isn’t working don’t hold scrutiny. There is little reason of fault or inadequacies in the existing system that would drive such radical change as the DWP proposes in this paper.

This paper – which only seekd to consult on the design of the new system and not of the decision to impose a LHA based solution – is severely misguided in its rationale and in its direction it wishes to impose upon the sector.  I have no issue with radical change at all, but not for its own sake and not when it does throw the baby out with the bathwater as this paper does.  The emphasis and huge priority of the supported living model (those with assessed case needs) which accounts at most for 24% of those in all supported housing is ridiculous.  Even if it helps them it most definitely penalises and makes it far worse for the 74% of supported housing that isn’t the supported living model.

Or to put that in numbers, it may benefit 40,000 vulnerable people but it will penalise and negatively affect 130,000.  In fact it puts all 170,000 at risk of existing providers fleeing the market like crazy due to the uncertainty and massive financial risks it creates.  New (social landlord) entrants to the market won’t happen because of this and new PSL entrants are hardly likely to enter a market where their returns as the same as now but for much higher cost and risk.

The DWP simply doesn’t know what it is doing.

Personalisation reduces choice in supported housing

The latest ‘great and good’ theory is called ‘Personalisation’ and as the name suggests it is intended to place more power and specifically choice in the hands of the person.  Personalisation is lauded and actively promoted by this government as a good thing and it even accuses local government of hindering the increased choice it says it gives to vulnerable service users.  It also has its own quango called ‘In-Control’ to advocate this great and good theory and again we see its name being synonymous with (the purported) increased choice.

The easiest way to explain the theory is that instead of social services finding and arranging suitable accommodation and care for those with assessed care needs, social services give money to the individual in the form of a personal budget or PB.  The individual then chooses what to spend this PB on and purchases the services he or she chooses and hence the ‘Personalisation’ and ‘In-Control’ tags of its advocates.

At this stage I should mention the discussion site on CommunityCare had an in-depth discussion on whether it was acceptable for a disabled service user to spend his PB on twice yearly visits to a prostitute in Amsterdam.  They concluded it was acceptable.

However, while the theory of personal budgets and personal choice is hard to argue against, the reality of personal budgets in practice in supported housing reveals it will and must reduce the provision of supported accommodation and therefore reduce choice – the exact opposite of its aims as the scenario below explains:

Scenario

A 10 bedded house for residents with disabilities (Sometimes called the Supported Living Model);

1. Landlord is a social landlord who also provides support
2. Service User chooses his care provider
3. Entire service is thus funded (a) Rent through HB; (b) support through SP funding; and (c) PBs for each user with assessed care needs

1. The social landlords funding model is dependent on 10 lots of (a) rent and 10 lots of (b) SP funding.  The care element is of no financial consequence as the landlord doesnt deliver care.  This is the typical model across the UK since the advent of the Supported Living Model of care (SLM) became de rigeur after the Community Care Act.

Landlord charges £100 pppw in rent and £100 in support and so the entire service generates 10 lots of £200 each week which is £2000pw and £104,000 per annum.  This £104k per year equates to the housing management cost, the intensive housing management cost (higher costs of supported accommodation such as staffing for security, furnishings, communal facilities etc) and support services and is a break even figure.

Under Personalisation residents could choose to stay in the accommodation but choose another external provider to deliver support services – after all Personalisation advocates state why should a vulnerable person only get the support if he or shes goes into specific accommodation.  Another good argument that works well in theory but not in practice.

Two of the 10 residents decide they want another support provider.  The existing provider still has the same staffing cost as it still provides housing management and intensive housing management to all 10 and support to remaining 8.  Yet the income has reduced by £200 pw and £10,400 per annum, a 10% reduction on the ‘break-even’ income it needs.  The service is thus non-financially viable and may need to close.

In that scenario 20% of residents get choice which negatively impacts on the other 80% and in fact on all whne the service closes.  That is not real choice at all and it is reduced choice for all.

The point the advocates of Personalisation conveniently lose is that the provision of an accommodation-based supported housing service is sustainable at the whim of every service user.  That is a risk too far.