107% of new tenants on HB are working – You what?

There are plenty of false perceptions coming out about Housing Benefit claimants today and mainly thanks to an article in Inside Housing entitled “Majority of new Housing Benefit claimants in work.”  This factually correct headline stems from a research report published by the Building and Social Housing Federation (BSHF).

I have seen many tweets today stating the majority of HB claimants are in work and this is not the case at all.  Of the 4.95m HB claimants only 865,200 are definitively in work and this represents just 17.5% and so the majority of HB claimants are clearly not in work, yet even that is misleading as the 4.95m figure includes non-working groups such as pensioners which make up about one-third of the total figure and so approximately 26% of working age HB claimants are in work.

The IH article cites the correct figures from the official DWP statistics that since BHHF report states that since January 2010 the HB claimant numbers have increased by 300,160 and the number of HB claimants in work has risen by 279,470 in this time – so 93.11% of new claimants since January 2010 are in work.

The BSHF research simply reports the official DWP figures and throws in ONS and DWP projections to recommend that DWP commissions some further research into a number of issues.   These are the same issues I have been raising in my blogs on each month’s HB figures such as (a) increased cost to HB bill (from September 2011); (b) rising trend of working claimants in December 2011; and (c) the emerging evidence of a HB diaspora from London boroughs I mentioned in November 2011

The BSHF report doesn’t note or comment that the coalitions HB cost target is £18.8bn this being £2bn less than the inherited £20.8bn from May 2010 which was set out in June 2010 by the DWP and as it now stands at £22.5bn it is already £3.7bn above this target and has risen every month since the election.

It’s of note here that last week’s budget included the vague almost throwaway comment that a further £10bn per year savings will be needed in 2016.  We must presume that this £10bn figure assumes that forecasts for savings will be met yet with HB already £3.7bn over target and the affordable rent model likely to add over a billion pounds a year more than DWP of Shapps expects then the £10bn figure is a chronic underestimate.

However the trend of more and more working claimants needing to claim HB is significant.  In my monthly posts I have always used the election date of May 2010 as a reference point and not January 2010 as in the BSHF report.  To keep that consistent we see that from May 2010 to December 2011 (latest HB figures) that the number of overall HB claimants has risen by 200,730 (4.751m to 4.952m) yet the number of working claimants has risen by 214,650 from (650,550 to 865,200).

Can hardly draft a headline that 107% of new HB claimants are in work can you?  Yet that is what has happened.

More information on the latest official HB stats here

SAR WARS – the return of the SN/SP/5889?

At times in the past week or so I wish I’d never raised the possibility that the shared accommodation rate or SAR could apply to social housing tenants through the backdoor of the under-occupation HB reform also known as the bedroom tax.

Yet I’m glad I did.  Despite the hundreds of emails and other correspondence I have received eating into my workload and time; despite condescension from certain quarters attempting to attack my reputation and professionalism; and despite beating myself up at what must be my lack of articulation as some still don’t get the issue, and despite the House of Commons library today reissuing the same SN/SP/5889 standard note from 24 October 2011 detailing the SAR issue but with today’s date –a truly bizarre coincidence(?) the raising awareness of the SAR issue has been worth it.

Thankfully I have metaphorical broad shoulders, else the “Have you ever even spoken to the DWP” comments or the “this is just an example of the ever increasing problem of paranoia created by blogs” ones or the “you just want to create a story where there isn’t one” comments could be damaging professionally.  Yet the problem is a real one and the application of the SAR to social tenants post April 2013 could happen through the backdoor of the bedroom tax process. It’s also a problem that can’t be ignored and the housing sector can’t simply rely upon this just being an unintended consequence that DWP officials say orally that we don’t expect this to happen.

What is to stop a council HB officer in May 2013 from determining that a 28 year-old social tenant in a 1 bed flat is underoccupying it? Or any of the new super-qualified HB staff from October 2013 when they begin to administer Universal Credit for a planned 4-year interim period from making such a decision?  There’s nothing at all preventing this.  Just as one HB department a few years ago deciding that the HB regulations on sheltered housing were to be interpreted in a very narrow way and created the £1000+ per annum disability rent tax issue?

If a 28 year old in the private sector lives in a 1 bed flat he is overoccupying and will only receive the shared accommodation rate or SAR under LHA.  While we now the SAR regulations state clearly the SAR won’t apply to social housing tenants, the bedroom tax regulations which will replicate the LHA provisions to social housing in 2013 could see the same outcome being achieved – SAR by the backdoor.

What I find interesting and revealing in the 200+ emails I have received from housing assistants to housing Chief Executives is that the impact of SAR applying to social tenants in 2013 hasn’t been stated and significantly doesn’t need to be stated – we all know it would have a horrendous impact and drastically change the face of all rented housing.

The number of emails and the huge increase in blog views all show the level of the concern right across the sector.  Many have stated that I am raising an issue they would want to raise but can’t afford to be seen doing so which just reinforces my view that luckily I can and I should raise such issues.

There is nothing to stop a shared accommodation rate being applied at any time in the future after April 2013 is also a common consensus and the political and economic inequality of the SAR applying to just the private tenant is a major issue.  Go back and read the HoC paper from October 2011 republished today to see unambiguously that the rationale behind SAR is to reduce the HB bill.  The £214m saving from just the 88,000 single 25-34 year olds in the private sector would triple if the 177,000 social housing tenants were added – a £430m per year saving is not to be sniffed at and especially when the budget stated incredibly vaguely that a further £10bn of savings will be needed from the welfare bill by 2016. That £10bn must also assume that this government achieves welfare savings it seeks from the bedroom tax and other reforms and that the affordable rent model won’t cost any more yet my post last month revealed that AR may end up costing well over a billion pounds a year more.

My strongly held view is that we need to seek DWP confirmation in writing ahead of 2013 that a backdoor version of SAR won’t apply or be introduced through the bedroom tax regulation.  That has to be a sensible way to proceed.  If it is just an unintended consequence, if it is so easy for DWP to state orally it won’t apply or even if it is just paranoia from a blog we need an unambiguous written answer ahead of 2013 and the introduction of the bedroom tax. That is why I posted the open letter to Grant Shapps on this issue.  His remit as Chair of the Homelessness prevention ministerial working group which also includes Lord Freud has a specific aim of looking at unintended policy consequences.

One final point with which some in social housing may take umbrage is the impact upon rented housing if SAR does apply.  The unanimous consensus that it would be highly damaging can be seen as social housing doesn’t give a jot that SAR has massive negative impact in the private rented sector to those 34 and under.  With the PRS taking up more and more of new lettings and having more and more of an impact on rented housing, the knock-on effect of that affects social housing more and more every day.  This increased impact on social housing is exacerbated by the SAR extension to 22 -34 year olds that is already in force and the social rented sector can no longer be as blasé about SAR in the PRS as they have been in the past.

SAR Wars? Why we must assume it will apply to social housing

SAR – An open letter to Grant Shapps

I have today emailed an open letter to the Housing Minister Grant Shapps with regards to the SAR issues I have raised in a few blog posts this week.  As the Minister likes openness and transparency I reproduce the text below.

Re: Ministerial Working Group on preventing and tackling homelessness

Dear Grant Shapps,

I write in your capacity as Chair of the above MWG in relation to the Shared Accommodation Rate and the impact of the SAR on homelessness.  I ask you share the above with all attendees of the MWG and make this matter an agenda item for the next MWG.

I note the publication of the attendees and terms of reference of the MWG as well as the minutes of the meetings since June 2010 that have been published this week.  I welcome this level of transparency.

The terms of reference transparently state the aims of the MWG to be:

“The aim of the Ministerial Working Group is to prevent and reduce homelessness, and improve the lives of those people who do become homeless. By bringing the relevant Government departments together to share information, resolve issues and avoid unintended policy consequences, we will be able to help enable communities to tackle the multi-faceted issues that contribute to homelessness.”

I have highlighted two aspects above that apply directly to the HB reform of increasing the SAR age criterion to those 34 and under and this open letter addresses two principal aspects of this and how it directly affects single homeless persons in hostel provision. I note from reading the minutes that the SAR HB reform has to date not been an agenda item.

1.  SAR impact on homelessness – the ALOS issue

The SAR includes an exemption for those that have been resident in a hostel and received support there for a period of 3 months.  Given that the majority of single homeless hostel residents are 34 and under the SAR creates policy, however unintended, for such provision by requiring a single person to reside in a hostel for 3 months and this creates many problems that directly work against government policy.

(a) It means that the capacity of each hostel is limited to a maximum of four persons per year per hostel space.  So a 10 bedded homeless hostel will have a maximum capacity of accommodating and supporting 40 single homeless persons per year.

(b) This maximum capacity issue reduces over all capacity as many single homeless hostels currently have an average length of stay (ALOS) for residents of less than this which means they currently have a capacity greater than this.  A real example is a 24 bedded unit for 18 – 30 year olds that last year accommodated and supported 204 single homeless persons. This year its maximum capacity becomes just 96; this reduced capacity being 24 rooms x 4 persons per year and as a direct result of the SAR change.

(c)  The above real example is illustrative of a direct cause and effect.  If existing hostel provision has an ALOS of less than 3 months then capacity to accommodate the rising numbers of homeless and rough sleepers is reduced, and at a time when demand for such provision is rising.

Before I continue with many other significant aspects of the SAR change the general point about average length of stay (ALOS) at single homeless hostels nationally is easy to confirm.  The data that CLG hold from all Supporting People contract holders can be analysed readily for the throughput figure for each single homeless hostel against its capacity.  If the overall number of clients accommodated (throughput) is greater than 4 times the capacity of the service it means that the average length of stay is less than 3 months.

For every such service that has an ‘ALOS ratio’ of greater than 4 the SAR changes mean a likely reduction in capacity will ensue because of the SAR change.  A distinct reduction will be the case if the hostel service uses the PRS for move-on and if the age group of the single hostel service is under 35.  With the lack of shared and 1 bed accommodation in the social rented sector a known undersupply and the likely use of the PRS already the extant position it is likely that PRS use for ‘move-on’ is already high.  The increasing demand due to the under-occupation HB reform for social housing 1 bed provision adds to the scale of the ‘move-on’ issue and will become a greater operational problem.

(d) The overwhelming majority of single person hostel providers will hold a SP contract which will have been commissioned on the basis of past performance or targets.  Local SP commissioners will wish to see at least the same 204 persons accommodated and supported, yet will see just 96.  This 53% reduction will cause much consternation and risk to survival of such services.  Even if hostel providers don’t have specific targets for throughput or contractual targets all have an implied assumption of delivering at least the same service to at least the same number of vulnerable single homeless persons as the previous year.  The SAR changes directly prevent this.

(e) Local authority SP monitoring has always looked at the cost per person supported. If for the ease of argument the service above received £204,000 in SP funding per year, or £1000 per capita for the 204 clients supported, the same £204k of funding becomes a per capita support cost of £2125 – a staggering 112.5% increase.  The apparent value for money issue this raises will mean that provision of accommodation-based single homeless hostels will be significantly threatened and exposed to decommissioning and again at a time when homeless and rough sleeping figures are rising and so increasing demand.

(f) Hopefully the above outlines the general position and concern.  However one final point is that the impact of the SAR change is not just limited to single homeless hostels but also to domestic violence and abuse refuges.  Private research from the refuges we advise reveals that many single women without children and aged under-35 access refuge and this can be as high as 30 – 35% of all clients there.  The ALOS figures we hold reveal a typical length of stay of approximately 2 months currently meaning a 10 bedded unit had a throughput of 60 women last year yet this year the maximum capacity reduces to 40.  The same exemption from the SAR applies to DV refuges as to homeless hostels and the same SP funding and financial sustainability issues apply.  I am sure it was not the intended policy of the government to reduce capacity to domestic violence refuges yet this is the direct impact of the SAR HB reforms

In summary on this ALOS issue the terms of reference aims of the MWG expressly state the remit to avoid unintended policy consequences to those people who do become homeless.  There is an undoubted operational remit for the MWG here to address this issue and a need to clarify or amend the position on exemptions from the SAR.  None of these issues raised above were included in the impact assessment on the SAR change yet it will directly impact in these areas.  The additional cost implications to the public purse of increased use of B&B, paying for new and additional temporary accommodation provision and other costs of homelessness are readily apparent from the SAR reform.

I ask that comprehensive clarity of consideration and response be given by the MWG to all the matters here and associated ones.  For example there is an increase in the use of fully self-contained provision for single homeless clients in recent years.  Can you confirm whether the SAR exemption from ‘hostels’ would include such provision given that by being self-contained they do not conform to the HB regulation definition of a ‘hostel?’

2.  Will the SAR apply to social housing?

Firstly, I agree the SAR impact assessment states it will only apply to the PRS.  This is however not the issue.

The impact assessment on the under-occupation HB reform states that social housing will replicate the PRS position and how LHA applies to PRS tenants.  Because to all intents and purposes the SAR is an under-occupation issue based on size and age criteria the wording of the impact assessment on under-occupation could, however unintended, apply to all social tenants after April 2013. It says:

“From 1 April 2013 it is intended to introduce size criteria for new and existing working-age Housing Benefit claimants living in the social rented sector. The size criteria will replicate the size criteria that apply to Housing Benefit claimants in the private rented sector and whose claims are assessed using the local housing allowance rules”

I posited this argument in a blog last week and it was met with consternation from across the housing sector.  The blog not only attracted 15 times the views of other blogs but led to my receiving over 300 emails from all quarters and all levels of the housing sector that agreed with my view that it could apply from this wording.

Also agreed unanimously was that if the SAR was to apply to social housing as it does already to PRS tenants, the impact would be disastrous to all aged under-35 leaving no viable rented options.

However, in the context of this MWG, I have outlined the impact of the SAR changes to homelessness above assuming it doesn’t apply.  Yet if it was to apply it would mean that there is no viable ‘move-on’ option for any client aged under-35 from homeless hostels.

This also means that a 3-month length of stay at a single homeless hostel becomes the minimum length of stay nationally for all aged 34 and under.  In short, the SAR HB reform unambiguously reduces single homeless capacity by a huge percentage.

I have appended the blog posts for completeness and do not need to discuss the impact of the SAR applying to social housing after 2013.  Rather, there is an absolute need for urgent clarity on this matter just for the impact it would have on homelessness.

I await your considered response.

Yours etc…

I have received the standard response by email which states:

“Thank you for your email to the Rt Hon Grant Shapps MP, the Minister for Housing and Local Government at the Department for Communities and Local Government.

Our aim is to consider the issues you raise and to respond within 15 working days.”

We shall see…

SAR will destroy hostels and refuges

I’ve posted two blogs in the past week as to how the shared accommodation rate (SAR) could apply to social housing tenants in April 2013 just as it does now to the private rented sector (PRS) tenant.  It’s insidiously permissible through the backdoor through the ‘bedroom tax’ HB reform.  These have attracted almost 2000 views between them in 4/5 days whereas the average post attracts 150-200 in a month!

Yet despite many housing professionals stating it is not DWP’s intention to apply SAR to social housing tenants it still could happen if you read the impact assessment on underoccupation, the bedroom tax as it’s become known.  Hopefully this won’t happen but without DWP confirming this specifically, then perhaps the sector relying upon just the intended consequences and not the unintended ones, is an example of Shapps’ ridiculous ‘lazy consensus’ tag of the sector?

All agree it would be disastrous it SAR does apply to social housing tenants, though yet again is this not a lazy consensus of the social housing sector in ignoring how devastating the SAR is to the PRS tenant?

One area in which this is a worthy comment is when social and private rented meet which they increasingly do in supported housing and especially in homelessness.  Here we see socially run first-stage accommodation, that is homeless hostels, supporting vulnerable residents and then these residents are ‘moved-on’ to their own flat and increasingly that option is fulfilled by the PRS and not social housing.

Yet because the SAR has been extended to include all those hostel residents aged 34 and under from the previous 24 and under so many more single homeless residents will see this impact.  The SAR changes have an exemption for hostel dwellers, but only if they have been there 3 months.  This is a huge problem and means that the SAR HB reform works against the demand for hostel places and against the wishes of SP commissioners who expect more support to more people from the same or reduced funding levels.

Homelessness has increased 14% and rough sleeping 23% – and many say it’s much higher – and so there is increased demand on hostel places.  How this can be achieved, at least in theory, is to reduce the time spent in a hostel as if you bring down the average length of stay you can accommodate more people in any year.  Indeed this is also the plan of SP commissioners who wish to see more support for less funding.  However the SAR policy works directly against both of these issues with the consequence of a double whammy and will see less homeless people being accommodated and more hostel closures.

Here’s why and uses real examples of just 2 support providers we advise.

Client A is a 24 bedded single homeless hostel and in 2011 accommodated 204 vulnerable homeless 18 – 35 year olds.  The 204 figure is what SP commissioners call ‘throughput’ and used as an ‘outcome’ indicator or performance target and they expect a near 15% increase in this number to 230 this year.

Extrapolate the figures and we see that the average length of stay (ALOS) for each hostel resident is 43 days – the number of yearly bed days is 365 x 24 rooms or 8760 yearly bed day which is then divided by number of yearly residents (204) to give 43 days as the ALOS figure. [(365x24) / 204]

The SP commissioning target for 230 yearly residents would see the ALOS figures reduce by 5 days to 38 days support for each resident at the hostel before they are moved on.

However, the SAR only exempts hostel residents at the move-on accommodation if they have spent 90 days in a hostel.  So for this to happen which is necessary the yearly capacity of homeless persons reduces to just 96.  This is a 53% reduction on the previous years number!!

It also means in the bean counters view – and these are the finance bods in councils who are constantly looking over the shoulders of the SP teams and commissioners – that the cost of each hostel residents support increases by 53%!!! Surely this is rank inefficiency they maintain end this woefully inefficient contract they proclaim!!!

The reality is that the SAR changes, even if they just apply to PRS tenants, are a HB reform that works directly against the increase in homelessness demand, directly against the increase in rough sleeping and directly against the No Second Night Out initiative (NSNO) and directly against the demand of the local council SP commissioner to get reduced costs per head.

So even if the SAR won’t be applied to social housing tenants through the backdoor via the bedroom tax in April 2013 it does work directly against every policy in homelessness in any case.  The SAR itself is a huge problem for homelessness provision and while I don’t have figures for the percentage of all single homeless residents that are under 35, I know from experience of working in the field that the vast majority are under 35.

What I do have figures on is the numbers of HB claimants aged 25 – 34 as these are in the DWP monthly releases on HB.  There are 265,000 of them of which 88,000 are in the PRS and almost twice that number in the social rented sector.  So the claimed £214m per year saving this government claim (which wont happen) is the upshot of increasing SAR from under 25s to under 35s would be tripled if it applied to social tenants.  Ask yourself why this government would forego a further £400m per year saving to the HB bill?  No I can’t find any rationale answer to that question either!

It’s not just single homeless hostels that will be affected by the SAR change.  Any supported housing model that is accommodation-based and has ‘move-on’ is affected.

Client B is a DV refuge with last year an average length of stay (ALOS) of 2 months.  Note well I haven’t stated their capacity of their throughput of last year as this would identify them. It now needs to be 3 months so that vulnerable single women with no children fleeing violence do not suffer the SAR cut.  I have private research figures from our DV refuge clients that say some have 30 -35% of their residents being single women with no children aged under 35.

What this means is that this year – and as a direct result of the SAR being extended to cover those 34 and under – the capacity reduces by about 34%.  They will accommodate 34% less women this year as a direct result of the SAR HB reform.  It also means that the SP cost per capita increases by over 50%!!!  Cue the bean counter argument from above!!!  This refuge is woefully inefficient they will claim!!

Womens Aid released in the last few weeks that 230 women fleeing violence are refused access to a refuge on a typical day.  How much will that figure increase as a direct result of the SAR HB reform?

Don’t bother looking at the impact assessment DWP produced for the SAR as this direct impact of the SAR to homelessness and DV is not in there!!

Also in the last few weeks there have been a few blogs from very well respected supported housing professionals calling for performance based SP contracts.  Read again the ‘bean counter’ argument above and the direct impact of SAR to all accommodation based supported housing services to single people under 35. They reveal the numbers being supported will fall and the support cost per capita will increase in all services where the ALOS is currently less than 3 months.

This exposes the bizarre nature of PBR and performance based contracts in SP and exposes them to be a dangerously naive policy and the respected supported housing professionals that who advocate PBR that I have deliberately not named here need to have a major rethink! I said exactly the same when Lorraine Regan at the CLG SP team advocated the same thing last year (see comments).  They are and will always remain a risk too far for support providers.

In summary what the SAR does directly – even if it only applies to the PRS tenant – is increased the demand and need for homeless hostels and DV refuges yet reduce their numbers as the bean counters and commissioners will reduce such services – the double whammy.  DWP means Don’t Work Policies!

SAR – is the social housing sector appeasing the DWP?

The government has made many HB reforms and two of them are as follows:

(a) The extension of the shared accommodation rate (SAR) that applies to private rented sector tenants only from under 25s to the under 35s;  age criteria

(b) The under-occupation issue, known as the bedroom tax which is based on size criteria

These are apparently two separate reforms and been seen as such yet they could be linked and interwoven as the age and size criteria meet.  When I mentioned this last week in a post asking whether (b) above could lead to (a) being applied to social tenants, the blog received over 1000 views and I received over 300 correspondences about it from right across the sector.

Firstly, I agree that currently (a) SAR only applies to private tenants and also agree that, currently at least, it is the DWP intention of SAR to remain applicable only to private sector tenants.  Yet this was never the issue I raised.

The issue I raised was a simple one.  The bedroom tax (b) will see social housing tenants being paid HB according to size criteria, so for example a couple in a 3-bed house will only receive HB at the 1 bed rate.  This replicates the current position that applies to tenants in the private rented sector and as such the bedroom tax could see a single person under 35 in a social property being deemed to over-occupy a 1 bed property, just as it works that way to a single person in private rented housing.  This is due to the wording of the bedroom tax as I explained in the post last week.

If you read the impact assessment for the under-occupation changes produced by DWP then you will see:

“From 1 April 2013 it is intended to introduce size criteria for new and existing working-age Housing Benefit claimants living in the social rented sector. The size criteria will replicate the size criteria that apply to Housing Benefit claimants in the private rented sector and whose claims are assessed using the local housing allowance rules”

In short, such an interpretation sees replicating in social housing the position that applies to private rented housing.  Further the quote is definitive as it says the size criteria WILL replicate rather than ‘may’ or ‘should’ or some other less definitive term.  Moreover the wording is not a size criterion but is size criteria, that plural and so not just size but also other criteria that will be introduced to “…claimants living in the social rented sector.”

This is why I raised the charge and called this sneaking in SAR by the back door and I am still of the view that this could happen.

The size criteria (i.e. plural) currently in the private rented sector are based on both size and age and also tenure, 3 lots of criterion.  If the size criteria of the PRS are replicated, which is the definitive stated intention of the bedroom tax then in terms of equity then SAR will apply in the social rented sector. While it may not be the DWPs intention or expectation of applying the SAR to social housing tenants currently, the guidance on the ‘bedroom tax’ could see this applied at any later date.  It needs to be noted that applying the SAR to social housing tenants has not been discussed as part of the Bill’s passage.

The SAR and the bedroom tax have been stated to be reforms with the primary intention of saving money and its extension from under-25s to under-35s captures a further 88,000 people in the 25-34 age group in the PRS.  Yet there are 265,000 25-34 year old single people claiming benefit so if it was applied to social tenants then the savings to the HB bill would triple and this is a significant issue.

The House of Commons Library documents on SAR reveal that “DWP commissioned research published in 2005 found that 87% of all SAR claimants faced a shortfall, averaging £35.14 per week”   That 2005 rate of £35.14 is about 25% more than the planned 2013 reduction for a single person aged 35 or 65 occupying a 3 bed socially rented property – the feckless scrounging ‘privileged’ person in ‘heavily subsidised’ social housing in government speak.  Apart from showing how draconian the SAR is in context, is holding onto an expectation that DWP don’t intend to apply this to social tenants is appeasement.  Under this doctrine young people in the PRS are more feckless yet less privileged but more worthy of a cut!

From a political perspective, why would this government firstly bring social housing into line with the PRS LHA criteria – the level playing field rationale – but then exempt social tenants from the most punitive aspect of that, the SAR?  It doesn’t make economic or political sense.  If the secondary reason for increasing the age criterion is it reflects the expectations or natural state of those under 35 (ie sharing) then why is this limited by another criterion such as tenure?  That doesn’t make any sense either, yet it appears to be both the sector’s view and the view of the DWP…well at least currently it does.

When the ‘affordable rent’ model could see far higher housing benefit being paid to social tenants, as AR is a social housing model, than is paid to private tenants by way of LHA, then the non-applicability of SAR to social tenants just doesn’t stack up at all.

There is a huge difference and anomaly between saying SAR will not apply to social housing tenants and whether the bedroom tax will do precisely that yet by the backdoor.  Now that the DWP is about to consult on size criteria (ie plural) within the bedroom tax which is a singular criterion the sector can’t afford to rely upon its own instincts or emails or other correspondence it may have from DWP or indeed rely upon the SAR guidance as published.  If the bedroom tax will replicate the PRS scheme then the housing sector needs to have it in writing that the bedroom tax won’t permit the SAR conditionality applied to social housing tenants.

Finally the DWP blindsided the housing sector and the housing minister with its LHA rent freeze announcement and created a massive impact on all rented housing.  It is the DWP that controls HB and LHA not the CLG and the LHA freeze while having a significant impact pales into insignificance to the SAR applying to all tenants.  The under-35 will have no viable rented housing options is what it means in general needs or support housing such as homeless hostels.

The DWP and the CLG need to deliver absolute clarity on this issue and produce a definitive document that says that SAR will not apply to social tenants in 2013 or after that.  Anything less is appeasement by the housing sector.

Update/; 3.30pm Monday 19 March

Above I referenced the DWP impact assessment on the under-occupation reform, known as the ‘bedroom tax.’   I quoted section 5 in the original post – that it will replicate in the social sector the size criteria currently in the private rented sector.

The reader should also look at section 13 and 16 of this impact assessment.

At 13

It is unfair to allow tenants in the social rented sector to enjoy more spacious accommodation than they could justify if they were on Housing Benefit in the private rented sector. In these circumstances it would be reasonable for under occupying claimants in the social rented sector to make some contribution towards more generously sized accommodation or to move.

The government and DWP view is that it is unfair to “…allow tenants in the social rented sector to enjoy more spacious accommodation than they could justify if they were on Housing Benefit in the private rented sector.”  Overlay that with LHA policy which sees those under 35 in the private rented sector receive the SAR when they reside in a 1 bed flat.  This reads that the SAR will apply to social housing tenants.

Then: At 16

“Housing Benefit claimants in the social rented sector will face similar choices to their counterparts in the private rented sector: Tenants will need to choose whether to occupy appropriately sized accommodation, or pay towards accommodation which is larger than the needs of their household“

The size criteria is being set for social housing tenants in this bedroom tax policy.  Social housing tenants will face ‘similar choices’ …and …”need to choose whether to occupy appropriately sized accommodation…”  Appropriately sized accommodation is similar to that found in LHA regulations for the under 35s, or the SAR.

Over the past few days I have read and re-read the policy documents, impact assessments, Hansard discussions, the House of Commons Library documents, articles from CIH, National Housing Federation, Crisis, Shelter around the SAR and around the underoccupation issue known as the bedroom tax.  Every paper discusses the merits of (a) SAR and (b) the bedroom tax in isolation from the other.  Everyone ‘expects’ the SAR not to apply to social housing tenants yet if the bedroom tax changes sees social tenants to be treated on a level playing field with PRS tenants – which the impact assessment and all other documents say – then how can this omit or exempt SAR?

All I have done is recognise that the SAR reform and the bedroom tax can be one and the same thing or if you like SAR is another form or variant of the bedroom tax.

SAR as it stands is a bedroom tax.  It says that a single person 34 and under occupying a 1 bed flat is underoccupying.  That fact and reality is being missed.  It’s not referred to as an ‘underoccupation’ as it is nonsensical – How can a single person be underoccupying a 1 bed flat?  That perversity is not discussed in that way as it exposes that perversity and highlights the distasteful nature of the SAR and its predecessor the SRR.  Read section 16 again – HB claimants in social housing will face similar choices and either downsize or pay towards appropriately sized accommodation.  Appropriately sized accommodation in the PRS for those under 35 is shared accommodation and not a 1 bed fully self-contained flat. – The SAR and its predecessor the SRR are bedroom taxes.

Finally, many have commented it would be good if th DWP cleared up this apparent anomaly once and for all.  My view is stronger and I maintain it is essential they do this.  If this is just an apparent anomaly caused by poor drafting of the DWP impact assessment and it is not the intention of the government or the DWP to apply SAR to social housing tenants then it is very easy to do that and clarify the issue once and for all.  Yet until they do the prospect remains that SAR can be applied to social tenants after April 2013 and that’s a frightening thought!

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Will SAR apply to social tenants – Yes it seems!

Many if not all believe the Shared Accommodation Rate (SAR) only applies to private tenants.  Yet I maintain it will apply to social tenants too from April 2013.  Heres why:

If you read the impact assessment for the under-occupation changes produced by DWP then you will see:

“From 1 April 2013 it is intended to introduce size criteria for new and existing working-age Housing Benefit claimants living in the social rented sector. The size criteria will replicate the size criteria that apply to Housing Benefit claimants in the private rented sector and whose claims are assessed using the local housing allowance rules”

As such SAR is part of the underoccupation changes which will see 25 — 34 year olds be treated in terms of HB eligibility the same as those in the private rented sector.  This means that a single person in a 1 bed council flat will be treated the same as a single person in a 1 bed private rented flat and subjected to the SAR but from April 2013 whereas the SAR change for private tenants was introduced in January 2012.

The above quote from DWP is categorical and unambiguous – that social tenants will be treated to the same size criteria as private tenants on LHA from April 2013.  This must include SAR.

Is this a case of SAR being introduced by the backdoor and the sector (and Shapps) missed this just as with the LHA freeze?

Can anyone get clarification from DWP on this?  Anyone have any thoughts on the above please leave a comment below.

Joe

UPDATE Thursday 15th March

I passed this on to journalists early yesterday as they are more likely to get a response from DWP and or CLG.  As yet I have no knowledge of any response from either Ministry though given that if my reading of this is true and the SAR will apply to all tenants under 35 from April 2013 I’m sure as soon as anyone gets a response it will appear somewhere.

I have received hundreds of communications over my reading of the above DWP guidance and not one has said the logic in my reading is flawed!  Given the seriousness of the implications of applying the SAR to social tenants, which are so huge nobody needs to mention, this is startling and worrying!  The excellent and always informative Nearly Legal blog has also put a post up and maybe an answer will appear there first.  I’ve commented there that unlike the legal profession who regularly get together to write open letters to the national media to get a ministerial response, there appears to be no similar mechanism from the housing sector. Food for thought!

It’s purely coincidence that this is the Ides of March, though everyone involved in any way with housing should beware the implications of the above.  Comments I’ve made or received on this say it means there will be no viable housing options at all for the under 35s if the SAR applies.  Private landlords wont touch them neither will social landlords and they are unlikely to be able to buy.  Will HMOs spring up out of the ether is another typical comment will many saying we should watch repeats of Rising Damp to get a flavour of the boarding houses and bedsits from the 60s and 70s!  The legal issues are significant as well as the impact on other HB matters such as NDDs and so many other implications; not least it would mean accommodation-based supported housing such as hostels and refuges and foyers that rely upon move-on would have their business model blown out of the water and probably close at an alarming rate just as homelessness and rough sleeping would go through the roof (no pun intended.)

Yet if its ok for private tenants to have SAR applied which is actually in place now having come into operation in January, why is it not acceptable for this to be applied to social tenants?

That in many ways is the killer question.

Will the coalition say my view above simply represents a simple error or confusion as we all hope it is and the SAR wont apply in April 2013?  If they do come back with such an answer wouldn’t that just flag up the inequity of it applying to just private tenants?  Would that then mean government would have to stop SAR altogether?  This is not just an issue of a simple misunderstanding at all is it?  It’s a hugely serious and political hot potato.

However, everyone involved in housing in any shape or form needs an answer and we need an answer quickly – over to you Ministers!

FURTHER UPDATE

Abi Davies of the CIH has tweeted in the last 15 minutes that “Social tnt with more rooms than need loses % of eligible benefit; LHA has fixed rates for required number of rooms. Diff mechanism = no SAR”

Of course ridiculously hard to explain in 140 chararcters.  Yet Abi appears to be saying its a different mechanism but I can’t agree with that and I dont think I’m being a pedant over this.  Look again at the DWP guidance and especially the last sentence and the word ‘replicate.’  It says:

“The size criteria will replicate the size criteria that apply to Housing Benefit claimants in the private rented sector and whose claims are assessed using the local housing allowance rules“

Replicate has an ordinary simple meaning and it cannot mean a different mechanism in my view.  It could mean that the DWP guidance was badly drafted, in fact whether I’m right or wrong in my scepticism on whether SAR applies, the DWP guidance IS badly drafted. And much as I would like Abi’s view to be 100% correct we still need a categorical answer in writing from DWP and CLG on this issue.

Abi, the CIH and the rest of the housing sector, myself included, all missed the LHA freeze announcement in October and December last year until I revealed it in early February 2012.  Incredibly ineptly so did Grant Shapps the Housing Minister as he said something entirely different in CLG guidance 16 days after the second DWP announcement on this!

I hope I am wrong in my original view that SAR will apply.  I would dearly love just to accept Abi’s view on it, but (a) given my earlier update on this being a political hot potato, (b) recent experience of the entire sector missing something as important as the LHA rent freeze (as well as Shapps 41% council rent rise plans too);and (c) the importance of the implications of SAR applying to all tenants, we need something in writing from DWP and/or CLG to absolute clarify the issue.

FINAL UPDATE  – The Ides of March!

With all due respect to Abi Davies and the CIH, you are working with DWP you say on this issue. But you dont work for the DWP and you dont represent the DWP on this or any issue and it is the DWP and probably CLG that have to answer the simple question of whether the SAR will apply to social tenants.

If Abi keeps up tweets such as I am ‘just looking for a story that doesnt exist’ or similar jibes then by all means bring it on and we can have a full blown slanging match. Such comments are akin to waving a red flag to a bull.  To answer whether I am just looking for a ‘story’ is nonsense.  I simply read what the DWP guidance, thee official DWP guidance DOES say.  I commented on that and as I said above I had hundreds of correspondence and response and not one disagreed that my simple logic which said it does apply was flawed.

I truly and genuinedly hope there is no substance in my interpretation, have said that repeatedly and will repeat that ad infinitum so anyone trying to position and label me as just someone seeking a story for whatever reason is barking as well as barking up the wrong tree.

To return to serious discussion and comment I still maintain my position of earlier today that this is a political hot potato.  How can it be seen to be equitable to apply the SAR to just private tenants?  It cant be.  When in the context that every other social tenant is being subjected to LHA conditions such as the underoccupation tax the lack of equity and political issue of such a position is clear.  Add in this government has set out its stall loud and clear on reducing HB spend and even set a target saving of ‘nearly £2bn by 2015′ back in June 2010.  Would such a government decide to treat a single person under 35 differently from the next one because he lives in social rather than private rented accommodation?  The same government that recognised the pre-existing inequity that private tenants suffered in comparison to social ones by introducing LHA type conditions to social tenants? The same government keen to portray all other underoccupiers as feckless freeloaders defrauding the state and having the ‘privilege’ of ‘heavily subsidised’ social housing?

Still a non-story you think? Get real!

IMPORTANT UPDATE FRIDAY 16 MARCH

Inside Housing have just released an article here which says DWP going to consult on this!!  But they “dont expect” it to apply!  DONT EXPECT!!

I’ve updated this with a further post today which strengthens my position that the SAR could apply to social housing tenants.

Latest HB stats for December 2011

Housing Benefit figures for December were released by the DWP today and yet again we see another rise in the HB bill and another rise in the number of claimants.

First a quick question.  Why can the same DWP release the unemployment figures for February 2012 on the same today yet can only release HB figures for December 2011?  Why is there a three-month time lag for HB yet only a month time lag for unemployed statistics?

I’ll leave that one with you as I turn to the latest HB figures (despite being 3 months out-of-date!)

Data reveals:

1. Claimant count up from 4,935,920 to 4.952,260 a rise of 16,340
2. Of that 16,340, 76 per cent is from private sector claimants (12,360)
3. This is consistent as since May 2010 200,730 new HB claimants of which 144,820 (72%) are from the private rented sector
4. An increase of 12,650 working tenants claiming HB is recorded – so 77.5% of new claimants were working
5. Overall HB bill now stands at £22.458bn up £56.1m from November figure of £22.402bn

Comments

I note today Grant Shapps is again claiming rents have come down.  As usual the official statistical facts don’t support that view.  Despite the average overall payment per person having reduced for three months in a row from £87.03 to £86.91 the last 12 months has seen a rise in HB payments of 2.8%.

This week has also seen a report in the Birmingham Post (in reality a placed story from the National Landlords Association (NLA) stating that 574 private sector rents have been reduced in Birmingham.  Superficially impressive yet as tab 3 of the official statistics reveal Birmingham has 34,590 HB claimants in the private sector and so this means 1.66% of private rents in receipt of HB have fallen which means 98.34% have not fallen.  So much for Shapps claims that private sector landlords are reducing rents because of the HB caps.

Shapps HB targets from June 2010 were to reduce the HB bill by £2bn from its May 2010 figure of £20.8bn – a target of £18.8bn by 2015.  The current bill of £22.458 bn is therefore £4.7bn or 25% above target.

Table 9a sees updated details on the impact of the underoccupation tax on those that don’t underoccupy?  Eh?  Think about it the shared accommodation rate (SAR) which sees a single person 34 and under occupying a 1 bed flat is an underoccupation tax and at far higher rates than the £28 or so for a single person aged 35 occupying a three bed social property.  It’s as high as a £126.50 per week reduction in Kensington and even more than the £28pw tax in Gateshead (£32pw), Liverpool (£35pw), Birmingham (£45pw), Bristol (£52pw) and Brighton (£73pw) to name but a few.

There are 265,800 single claimants aged between 25 and 34 all of whom in whatever tenure (the data doesn’t reveal this) will be subjected to the shared accommodation rate tax that came into effect January 2012.  This will be an area to watch and some of the issues are here in today’s Guardian, although as I have commented underneath the figures used as to impact are a third of the real figures which suggest the impact will be three times what it claims.

UPDATE 11.40am

I have received emails that SAR does not apply to social tenants only private ones.  I disagree with that view though admit I am in the minority on that view.  To explain my view read the impact assessment for the underoccupation changes produced by DWP then you will see:

“From 1 April 2013 it is intended to introduce size criteria for new and existing working-age Housing Benefit claimants living in the social rented sector. The size criteria will replicate the size criteria that apply to Housing Benefit claimants in the private rented sector and whose claims are assessed using the local housing allowance rules“

As such SAR is part of the underoccupation changes which will see 25 — 34 year olds be treated in terms of HB eligibility the same as those in the private rented sector.  This means that a single person in a 1 bed council flat will be treated the same as a single person in a 1 bed private rented flat and cannot mean anything different to that view.  Hence a social tenant aged 26 to 34 will subjected to the SAR by the backdoor.  If my view is correct then SAR criteria for social tenants will come into effect next year in April 2013 to create parity with the SAR for private tenants which came into effect in January 2012.  It may not be called SAR but its the same thing.

Some sheet facts about affordable rent in Shapps constutuency

Guinness South, part of the Guinness Partnership which has 60,000 or so social rented properties under management has released a factsheet about affordable rent.  Given my repeated attacks on the misnomer that is affordable rent or AR which shows it will cost billions more in HB every year I took a look at this purported sheet of fact

It has a table in it which uses a 2 bed apartment in Welwyn Garden City (coincidentally the constituency of Grant Shapps the Housing Minister) by way of explanation.

It’s says a social rent is typically £105.32 an affordable rent £123.69 and a market rent is £155.00 pw.  These figures are utter tosh and market rent is not £155 in WGC for a 2 bed apartment it’s far higher.  Have a look on rightmove.co.uk for example and you see a range of prices from £725pcm (£167pw) to £925pcm or £213.50 pw.

Or take a look at LHA direct and you see that government will pay up to £230.77pw in LHA for such a property. Or is that just a coincidental fact that sees private landlords in the Housing Minister’s constituency able to claim 48% more to the HB bill (£230pw) than the alleged typical rent of £155pw?  No wonder Shapps has a highly skewed view of the PRS!!!

Or even read higher up on the Guinness factsheet which says social rent is “Set according to a Government formula, – typically at less than two fifths (40%) of market rent levels (although higher in some areas)” which extrapolates means their £105.32 gives a market rent of £263pw in WGC.

So this factsheet that contains so many errors of fact as to market rent (and just being pedantic here but AR is up to 80% of gross market rent which includes service charges) is there any coincidence in the fact they use the constituency of the Housing Minister Grant Shapps to explain (errantly) AR?

Or is it being used at WGC has the lowest percentage of private tenants claiming HB in the country at just 12% compared to the 32% national average? Yes that’s a coincidence for the Housing Minister too isn’t it?

I can’t for the life of me figure out why or how Guinness Partnership have produced this highly errant sheet of fact, never mind want to publicize this on twitter and other social media sites?

RTB2 – the Porter House Blues return

The RTB2 consultation response is out.  Discount, discount, discount is all that the media is interested in, with a few exceptions as to will this produce a 1 for 1 replacement.  What nobody is focussing upon is the real interest – how much this will cost every taxpayer on an ongoing basis.

Ignore the obvious flaws that the figures just don’t add up and for a second assume we will see 170,000 new RTB sales replaced with 170,000 new affordable rent (AR) tenancies.

Let’s be generous and say of those 170,000 RTB sales 20% of those exercising their ‘right’ to buy are currently receiving Housing Benefit.  I would suggest it will be nearer to 10% as after all these will need to get a mortgage but let’s not quibble over that – I doubt anyone thinks more than 20% of the 170,000 RTB2ers will be claiming HB. UK plc will save 34,000 HB claims which average £76.48 per week in the social housing sector.  UK plc saves almost £136m per year by reducing the HB bill.

However, the 170,000 new AR properties which replace them attract HB at 80% of market rent (note private properties on average attract 66% of market rent through LHA) and this 80% figure is £134.68.

If two-thirds of the 170,000 new AR properties house benefit claimants (the approximate current average) then we need to set against the £136m pa saving the added costs of 114,000 new benefit claimants at £134.68 each per week.  The cost of which adds £801m per year to the HB bill.

The overall increase in the public purse HB bill for UK plc is therefore £801m – £136m or £665m more per year in HB.

My first quick calculation on Inside Housing today assumed 100% of both were on benefit and this adds £516m to the yearly bill.  Yet that figure must be incorrect.

Firstly, as I briefly discuss above what percentage of those taking up the new RTB will be benefit claimants?  Those able to afford and be eligible for a mortgage on their current council property are likely to be no more than 10% of them (a saving of just £68m per year).

Secondly, the percentage of council tenants claiming HB now is approximately two-thirds, meaning one-third self pay their rent.  Yet this is at an average rent of £76pw.  The new AR replacements will have a typical average rent of £134.68 pw, this being 80% of average market rent.  Will the same percentage only claim HB on this 76% higher social rent level?  Of course not a much higher percentage will need to claim HB.  Let’s be very conservative and say the 67% figure only increases to 75%.  This means 128,000 will be claiming the £134.68 pw – an increase of £912m per year to the HB bill.

Take away the £68m saving and the overall effect is HB bill will rise by £844m per year.

So, let’s assume Shapps and the Coalition achieve their best option and that RTB2 stacks up financially and 170,000 RTB2 sales materialise to be replaced with 170,000 new AR properties.   Even if it does me, you and Uncle Tom Cobley and every other taxpayer will be out of pocket to the tune of £844m per year as the Treasury needs to find this additional money in HB.

Wow £844m for 170,000 votes – thats about £5k per vote… well no its £5k per year per vote – £25k per parliament and rising.  Oh hang on I forgot the initial £75k bung… thats £100k per vote…for the best off social tenants of course not the majority.  But hey turning feckless workshy scum into aspirational citizens overnight what a result at any cost.  Hang on, £100k a pop!  Bloody hell bring back Dame Shirley at least she did it for far less than that!!  Hey Minister you can call it Porter House Blue, nice and snappy