I have just listened online to the House of Commons Work & Pensions inquiry into Universal Credit from Monday 17 September 2012. A 2.5 hour session in which Lord Freud and IDS answered questions and did give some new information on how supported housing will be treated under Universal Credit. The relevant bits start at 1 hour 27 minutes or so into this session.
I can from first viewing see a dozen quite lengthy blogs on what was said which I will cover in more detail over the next week or so. The short summary is we still dont know what will happen to exempt accommodation but we do know that IDS and Freud have just sanctioned a huge dispresal programme akin to a pogrom on homeless families in London:
- Supported housing that is exempt accommodation under HB regulations will be dealt with outside of the UC mechanism – at least temporarily.
- Freud and IDS clearly disagree on what should happen with the treatment of how housing costs are met for supported housing. (The issues not the politics of this is key and Freud has grasped far more than IDS yet Freud still has a steep learning curve)
- Temporary Accommodation used for homeless families will be paid at a flat rate of LHA + £40pw with slight potential for additional DHPs of £75m in Year 1 and £45m in Year 2.
- The lessons from the Newham to Stoke homeless diaspora debacle have clearly not been taken on board and council will be set against council as London councils WILL export even more homeless families to PRS landlords ‘oop North.‘
Time for some detail and comment.
1. Supported housing that is exempt accommodation under HB regulations will be dealt with outside of the UC mechanism – at least temporarily.
This is to be welcomed as it means homeless hostels, DV refuges and other accommodation-based services which are exempt will not have the necessarily higher rent payments included in Universal Credit and (presumably) not included and come under the overall benefit cap. It means the DWP got it wrong in the first place but at least shows they have listened and so for that latter point it is welcomed ….but with some huge caveats and concerns!
Note well that a distinction needs to be stated firstly between hostels, refuges and other accommodation-based services (known as exempt accommodation) and “Temporary Accommodation” (TA) used for homeless families such as private sector leasing schemes of B&B hotels. (see points 3 and 4 below).
Exempt accommodation services will have a different system to UC we are informed at least temporarily so that payment for the necessarily higher levels of rent there are made by either the preferred (a) IDS method of LHA + £40pw with a possibility of some additional top up through a diminishing level of discretionary housing payments of £75m in Year 1 and £45m in Year 2; or (b) the Freud preferred method of HB being paid direct to exempt accommodation landlords (or perhaps managing agents).
Both of these are vague and very short on detail though presumably will be released after the final UC regulations which themselves will be released Freud says after the autumn statement…and no he didn’t say when that will be either! So the detail we will have to wait for. Further, even when this detail eventually arrives we do know that this will only be a temporary system for the payment of HB in exempt supported accommodation as that was stated explicitly by both IDS and Freud
For now all we can say is that the supported housing sector should lobby Freud so that direct HB payment to exempt accommodation providers based on the current regime of transparency and actual costs being met and not having ‘service charges’ reduced to just three categories, – none of which would cover the necessary furnished accommodation in homeless hostels and DV refuges – as is the current proposal which would close 50% of hostel and refuge provision.
In summary it is clear that both IDS and Freud realise that their plans to change HB for exempt supported accommodation as put forward in their July 2011 consultation paper were unworkable and inept and didn’t consider the mass closure of refuges and hostels they would inevitably produce. It is also abundantly clear that IDS and Freud don’t have a clue on what should replace the exempt HB provisions and/or they are best left as they are. This leads directly onto point 2.
2. Freud and IDS clearly disagree on what should happen with the treatment of how housing costs are met for supported housing. (The issues not the politics of this is key and Freud has grasped far more than IDS yet Freud still has a steep learning curve)
I have touched on some of the elements above yet the real issue is this. As exempt accommodation residents will not have their rent levels included as part of UC and presumably the overall benefit cap then are they receiving positive discrimination?
Residents there would have a £350 or £500 pw cap set for just welfare benefits as their housing costs are not included in the cap. So for example in operational terms will this lead to people wanting to stay longer there? Come on Joe surely that can’t be the case, why would a homeless hostel or refuge resident want to stay longer than necessary?
Plenty of reasons. The major one is if single and under 25 then it avoids the SAR issue coming into play which already acts as a huge deterrent for the vast majority of hostel residents who are single and the 30% or so single refuge residents to move on. Secondly, there has been a huge trend in moving hostel and refuge provision away from communal living to self-contained units (which technically speaking are not hostels!) Thirdly, the (necessarily) higher rent costs in exempt accommodation remove the need or compulsion to find employment on the individual resident, whether that be a single person or lone parents which by default all women entering a refuge with children become. Note well I am not saying women with children will enter a refuge citing DV to escape them having to find work once their youngest child reaches 5 as is the case with UC and welfare reform steer, rather it may prevent them being keen to move on because of the much worse financial condition they will be in on leaving a refuge. In short welfare reform policy in this area actively provides a disincentive to leave a refuge. Fourthly add to that because of the necessarily high rent levels in exempt accommodation the choice which UC seeks to bring to those on benefit on where they can afford (or not afford) to live means exempt accommodation is a preferred rational choice for almost all who reside there.
All of the above creates problems for providers of exempt accommodation services as they have ‘throughput’ targets in SP contracts which cannot be met with increasing average durations of stay. Further, because of the increasing use of payment by results support funding (SP) then many would see reduced support income and become non-financially viable. Moreover, if IDS, Freud and DWP don’t understand these practical issues how do we expect SP commissioners to understand them? They wont and they will decommission such services in higher numbers as they will appear to the financial bean counters that hover over SP commissioners shoulders as inefficient services.
In summary exempt accommodation services were always likely to not fit in with the ethos of Universal Credit, OBC, welfare reform and HB reform. Unfortunately that continues with the temporary solutions suggested by IDS and Freud. Moreover, as I touch on above, other welfare and HB reforms such as the SAR issue make the position worse. The issues that made exempt accommodation not fit with UC and its underlying theories (and morality) have been worsened and highlighted with the other related reforms such as the SAR extension. So on being forced to look into exempt accommodation and finding a solution to fit with UC, the DWP has found it never can fit and have become aware of just how good the existing system is and become aware of the implications of other reforms which has made the exempt accommodation ‘problem’ even more intractable!
It also exposes just how incompetent they were in the original consultation paper of July 2011 that sought to change how rents in exempt accommodation services were paid. This leads into the changes announced for “temporary accommodation” below.
3. Temporary Accommodation used for homeless families will be paid at a flat rate of LHA + £40pw with slight potential for additional DHPs of £75m in Year I and £45m in Year 2.
Oh dear!! What a total fuck up! Apologies for the language reader but I am taking a leaf out of Grant Shapps book and calling a spade a spade. In fact I revise that statement as it’s a monumental fuck up that will have massive negative and offensive consequences for homeless families just so the system can seem easier to administer.
The original plan for exempt accommodation services was LHA plus a % and now the imbecile who dreamed up this dangerous plan and was wedded to it in the DWP has simply adopted it for TA for homeless families - and look at my comments above on who is wedded to this ease of administration and LHA+ ideas! Arise IDS you imbecile!
I first started blogging last August because of the exempt accommodation HB consultation which was and still is incredibly dangerous and incredibly offensive. I wrote numerous blogs then on why – http://wp.me/p1vuvL-g http://wp.me/p1vuvL-k http://wp.me/p1vuvL-o http://wp.me/p1vuvL-q http://wp.me/1vuvL http://wp.me/p1vuvL-D ) it was so dangerous and despicable and incompetent and commenting again on why is unnecessary except to work this idea through with TA specifically and remind the reader of the Newham to Stoke farce of a few months back which encapsulates the points a we need to revisit it now that IDS and Freud have sanctioned the pogrom of homeless London families to oop North.
NB – If you work in homelessness in a Local Authority please get some paracetemol ready (or a stiff brandy) and some smelling salts and surround your chair with pillows so you don’t hurt your head while you read this!
4. The lessons from the Newham to Stoke homeless diaspora debacle have clearly not been taken on board and council will be set against council as London councils WILL export even more homeless families to PRS landlords ‘oop North.‘
Many London councils were and still are exporting their homeless families cases out of area. Unfortunately for Newham it was their examples that received national condemnation when all London councils were doing it or looking at it and we all know how rare it is for housing news to be national news. Such cases have risen 28% the latest official homeless figures revealed last week from 12.4% of cases out of area up to 15.6%; a statistic many missed (see update at end)
The plan was simple. Pay 90% of the local LHA plus £60 to private landlords in Stoke to take Newhams homeless families. Now Freud and IDS have come up with 100% LHA plus £40pw – what a coincidence!!!….and what a monumental fuck up this is going to be!!
The numbers. At the time of the Newham to Stoke debacle I used the 2 bed LHA figure for Stoke which is £90pw. The Newham plan was 90% of this, £81, plus £60 pw making a total of £141pw and a 56% increase of the private landlord in Stoke who would of course evict his existing tenant making an additional homeless family in Stoke so he could receive the 56% extra rent.
Under IDS plan the same PRS landlord receives £90 + £40 making £130pw a mere 44% guaranteed increase in rental income with the potential for additional DHPs on top. The 44% increase is still plenty to make the PRS landlord in Stoke evict the sitting tenant and make 1 additional homeless family in Stoke for every 1 homeless family he accepts from London. An additional £2080 per property per year is good business sense after all and especially when it is guaranteed and less of a risk!
London councils instead of paying £500pw to accommodate a London homeless family will now pay £130pw – happy days for London councils!!
PS Stoke you are well and truly f- UC- ked aren’t you! Perhaps not as much as Kinston-upon Hull which has the lowest PRS rent levels in England but little consolation.
All private tenants in Stoke will be well and truly f -UC -ked by this of course as demand for private rented property there escalates and rents shoot up accordingly.
Stoke City Council, you are well and truly f -UC -ked by this too as you will have to rip up all your strategies and plans to accommodate the mass intake of London families and of course your homeless strategy will be blown apart and suffer a huge increase in costs (Though then again you can pass these on to Hull can’t you, after all homeless families are commodities in the f-UC-ked system. I mean is one additional move going to hurt these ‘units’ any more than being exported from London in the first place?)
So not only has the LHA cap fuelled HB diaspora fuelled huge increases in London it has now been rubber stamped by IDS to fuel the mass exportation of Londoners to Stoke and Hull..and of course line the pockets of private landlords in Stoke who will donate more to the Tory party as a result.
Oh bugger I missed out that house prices in Stoke are going to rocket too as PRS investors outbid one another for properties they can purchase under BTL mortgages. Clever IDS I didn’t initially spot the buying of owner occupier votes oop North for your Tory party…who needs RTB eh? Oh but that will increase too wont it oop North as the discounts get higher and former council stock can be used to house the London diaspora of homeless families – wow from HB diaspora to housing pogrom I can see you religious roots coming out so well!
And the coup de grace – Localism! The Newham to Stoke debacle caused outrage and national condemnation IDS BUT these are all local government choices aren’t they not central government ones. Or rather at least that’s how you can spin it. I’d advise against using the economic aspects for London councils, you know the £500pw down to £130pw as despite this being almost £20k per year LESS to house each (feckless, workshy, et al) homeless family for the state Joe Public wont take too kindly to that line of argument and of course you would then have to admit this was central government intent in the first place wouldn’t you? Nah, don’t touch that with a bargepole and of course it would expose your government as the one who change the homeless law to allow London councils to discharge their duties by this pogrom method.
A tip IDS, you know this £75m of new DHPs in Year 1 and £45m in Year 2, well you better give it all to London councils. I couldn’t see Stoke viewing these exported London pogrom families favourably can you? Of course they will need a shitload more money to pay for their own massively increased homeless families – yes the locals evicted by the PRS to make way for London families. Better to give it all to London councils as even these Northern PRS landlords are a bit savvy and will know the London councils are paying £500pw now hence why should they settle for just £130pw. No…hold on…before you spout the old myth that the North is full of empty properties we both now that’s not true and so do these savvy Northern PRS landlords. Available properties oop North will soon dry up seeing Northern PRS landlords wanting a bigger share of the £370pw savings London councils are making by your pogrom on each family. So London councils will need all of this DHP money wont they – (and after all London always gets more than any other area so whats the issue there!) – to pay their new-found PRS friends in the North.
When does this TA end is a puzzle and who decides? The London borough has the duty to get accommodation for homeless families (in Stoke) while they look for permanent solutions such as accommodation in london for these families. Does a homeless officer travel from London to Stoke to visit them or does the London homeless family now in Stoke have to go back to London to visit the prospective permanent accommodation? Presumably the latter. So does the London borough have to pay their travel costs to view this accommodation then? What if the London family say it means uprooting their family again to go back to London, changing schools etc? How many more appeals against this will happen?
Or does the London homeless officer have to seek permanent accommodation for them in Stoke? I can’t see that homeless officer being very welcomed in Stoke can you? Yet a bigger issue is when does the TA provision end? And who decides and on what criteria is used to decide? Can a homeless officer in London accurately and reasonably make a ‘suitable’ offer of permanent accommodation in Stoke? I cant see how! So hows does the TA provision end?
Is it likely that average lengths of stay in TA will increase? Yes it is bound to increase. So the London-based homeless officer makes a decision that a suitable permanent offer of accommodation has been made (either in Stoke or London) and the homeless family refuse? What happens then? Does the HB payment – the LHA plus £40 stop? If so what will the private landlord in Stoke do? Yes that’s right evict the London family, the same London family that is likely not to have a local connection to Stoke. I see so then Stoke homeless officer says yes you are homeless and in priority need but no local connection to Stoke so we are passing you back to London? I can’t recall whether that’s a 192 or 193 decision and whatever it is the London council is likely to say we wont accept Stokes decision anyway and its up to Stoke social services to pay for because they have got children. But Stoke SSD say this family originated in London and the London borough must pay, but the London boroughs SSD says no….yes you really have thought this through IDS havent you!!!
Meanwhile the ex London homeless family is now in B&B accommodation in Stoke (assuming they are not on the street) and they havent got a bloody clue what is going on or where they will be next. Note I’m assuming Stoke will have any local B&Bs for TA as they will be overloaded with local homeless families evicted to make way for the London homeless family in the first place…are you still with me on this reader?
So if you are thank you and I’m sure you will forgive my language in calling this a monumental fuck up wont you as it does accurately describe the situation that will inevitably happen. Just be thankful I havent thrown in the fact the legal aid is highly unlikely to be available for this London homeless family to appeal against either London or Stoke homeless departments decisions or indeed Stokes or the London boroughs social services departments as that would make this monumental fuck-up and Kafkaesque nightmare even worse wouldn’t it?
Finally as I said at the start, this is but one of a dozen or so blogs I can and will be writing over this monumental….you know the rest!
Pogroms, while that term is often used against Jews it can and has been used against other groups and cultures, it can be rightly used here against homeless families to describe the (HB) diaspora of homeless families from their established roots in London which is rising markedly as the latest official homeless figures confirm. This sanctioning by IDS and Freud makes this a pogrom.
Update: The latest homelessness statistics and I quote directly from them at page 6:
“Households in temporary accommodation in another local authority district
Of the 51,640 households in temporary accommodation on 30 June 2012, 8,080 were in accommodation in another local authority district. This is an increase of 28 per cent, from 6,290 at the same date last year.”
So we already have 8,080 vulnerable families being ‘placed’ in another local authority area from where they ordinarily reside!
A staggering 28% increase from this time last year!
Dig a bit deeper and we see that there is a 37% increase in the use of B&Bs for temporary accommodation and a 42% increase in B&B use in London!
4270 B&Bs are used now to accommodate homeless families nationally and 49& of these are in London at 2010
I wonder is the 27% increase in homeless acceptances in London could have anything to do with the LHA benefit caps from last year? (Yes I am being facetious!) Anyone remember this coalition government saying these LHA caps wouldnt lead to homelessness and this was scaremongering? In fact they said private landlords would reduce rents instead! Interesting that one major reason they said rents would reduce is that they would pay PRS landlords direct as an incentive to do that yet are fundamentally against social landlords receiving HB direct!