Now its Philippa Roe misleading on HB – AKA doing a Cameron

Philippa Roe of Westminster City Council has been up to her usual statistical sophistry concerning the HB cuts and caps in an article in the Telegraph, the voice of the Tory Party as it is rightly known.

The usual opening of the article is fire and brimstone as to how outrageous it is that the public purse is paying huge amounts of HB for ‘some’ properties, and of course not stating:-

• it is private landlords that set rent not tenants and,
• that private landlords have the choice whether to allocate the property to a HB claiming tenant or not.

So much for Shapps comments on tenants playing the system this week!

Ms Roe then goes on to say: -

“Much has been reported about the potential impact of the caps upon families living in the capital due to fears they may be priced out of their current area; Westminster in particular has been highlighted because the rents are substantially higher than elsewhere in the UK. We have 50,000 rented properties in Westminster and, of those, 5,000 households are affected by the new caps. However, not all of these households will need to move. There is substantial evidence that rent levels have been driven by the Housing Benefit levels.”

This needs some further investigation:

(A)   “We have 50,000 rented properties in Westminster and, of those, 5,000 households are affected by the new caps”

Here we see Ms Roe intimating that just one in ten will be affected by stating 5,000 out of 50,000 rented properties. What she doesn’t say is that would be 5,000 out of the 8510 HB claims in the private sector that the official HB statistics released by the DWP show for Westminster.  The HB caps of course don’t affect social lettings it is only the private rented tenant and only then if they are claiming HB/LHA.  Surely Ms Roe knows that the HB caps only affect private sector lettings, she has just highly conveniently forgot to say that! An error both of omission and of commission or in common parlance a deliberate lie.

The fact she is attempting to hide is that the HB caps will affect 59% of the private rented properties in Westminster that are claiming HB / LHA – the same ones that the HB caps target and ONLY affect.

(B)   “However, not all of these households will need to move. There is substantial evidence that rent levels have been driven by the Housing Benefit levels”

The assertion that not all of these households will need to move Ms Roe has cleverly stated after and directly following her errant intimation that it affects just 10% of HB claimants in Westminster.  It affects 59% of the private tenants, the ONLY ones the caps affect.   That’s a huge non sequitur Ms Roe as well she knows.

Ms Roe then goes on to say “Whilst we do not doubt some households may need to move, they may not have to move very far.” So tell us what number of the 59% affected will need to move then Ms Roe?  Of course she doesnt do that as it would expose the extent of this benefit diaspora

Ms Roe goes on to say “Even if larger families do need to move further afield, Westminster has excellent transport links which will allow those who move an easy trip back to visit friends or to go to work.”  No comments or discussion on the added costs of getting to work Ms Roe?

All of these comments come after Ms Roe has deliberately misled the reader to believe it is only 10% of people that will be affected but as I’ve explained above its 59%.  She goes on with some succour and comfort for the 59%

“The council is committed to offering support to households affected by these changes wherever possible through our Housing Options Service, which provides advice to families to find suitable properties both within Westminster and other London boroughs, will help negotiate rent levels with landlords and assist parents with changing schools. “

So her council is committed to offering support, ‘wherever possible’ then? When is it possible and when is it not Ms Roe.  She goes on with some other caveats

“For those families that have a genuine need to remain in Westminster, such as those with children at crucial stages in their education or those with social care packages, we can allocate a discretionary Housing Payment to them to allow them to stay in the borough.”

So the caveats then are families, and do we assume that WCC is not going to offer support to single persons?  And within these ONLY families it is only certain families in certain situations!  To those families with social care packages (Nice to see WCC uses unregulated PRS to house those it has a duty of care for!) And even then this limited succour to 6 times the number of persons than Ms Roe admits, it is limited to DHPs that ‘can be allocated’ and not will be allocated I note!

Ms Roe has been deliberately engaged in sophistry in this article to downplay a problem that is six times higher than she is making out.  She and her council know:

• HB caps ONLY affect private sector tenants that are claiming HB/ LHA.
• They DON’T affect social housing tenants and tenants not claiming HB
• That 5000 WILL be affected by the HB caps in Westminster and
• That 8510 private tenants in Westminster (59%) claim HB/LHA
• So the percentage affected by the caps in Westminster is 5000 of 8510 or 59%

Philippa Roe has misled her constituents and the general public just as David Cameron misled parliament and the general public this week at PMQs.  Like Cameron her dissembling over HB is easily proven as the above discussion shows.

Shapps Private rent plans – bizarre and unworkable

The consultation paper on RTB issued late December had a draft impact assessment (DIA) attached and it contains some serious implications for rented housing. I blogged about the 41% increase this holds for council tenants a few days ago which is three times the RPI inflation rate by 2015.  Here I look at the impacts on the private sector which has massive implications for social housing.

The DIA is a turgid document, written in economic jargon and with as much technical data and tables as possible. On Page 15 we find Table 3 ‘Macroeconomic assumptions’ – the expected rent increases from now until the end of this Parliament in 2015 and beyond till end of next Parliament in 2010. The inflation figures adapted to current national average rent figures are in a simple table below incorporating the policy the DIA states.

” Policy

• RPI + 0.5% beyond

• • Local Authority rent = RPI + 2.5% to 2015 as      part of the Local Authority rent convergence criteria,

• • Local Housing Allowance rent = RPI + 0.5%      2012, beyond, CPI 2013-15
• • Market rent = RPI + 0.5%“

HB   FIGURES	COST	2012	2013	2014	2015	2020
COUNCIL	£70.95	£77.07	£83.23	£89.89	£99.44	£119.25
HA	£80.32	£85.37	£90.27	£95.52	£99.44	£119.25
LHA	£112.01	£116.27	£118.71	£121.08	£123.50	£136.36
GMR	£168.86	£175.28	£181.24	£187.76	£195.46	£234.40
PTMU	£56.85	£59.01	£62.53	£66.88	£71.95	£98.04
LHA   % GMR	66.33%	66.33%	65.50%	64.49%	63.19%	58.17%
LA   % LHA	63.34%	66.28%	70.11%	74.24%	80.52%	87.45%

GMR – gross market rent:

PTMU – Private tenant make up – the difference between LHA benefit and the gross market rent figure

LHA % GMR – what proportion of total rent the LHA benefit will pay as a national average

LA % LHA – council and HA rent HB as a proportion of LHA which is HB paid to private tenants /landlords

Comments:

The rent inflation assumptions are all about convergence of rent levels.  The forced convergence of council rent up to housing association rent levels are well known yet what isn’t and id new in these official government plans is the convergence of social rent with private levels, albeit on a much slower basis.

By 2020 social rent HB levels will move from 63% of private HB levels (LHA) to 87% and this is planned by keeping LHA levels below market rent inflation and increasing social rent benefit levels way above inflation.  This is a significant trend of increasing social rent to meet private rent levels in simple terms and something that the publicity hungry housing minister Grant Shapps has kept very quiet about.

However, what the table above exposes is the fact that these government plans or rents won’t come to pass as if they did private sector landlords would stop taking tenants on benefits.  They may like to do this but with the latest official HB figures showing nearly 1.6 million HB/LHA claimants in the private sector they can’t suddenly stop taking them.  If they did it would see many more properties being sold yet this would have to be at below the already depressed market rates.

Maybe that catch 22 situation is the coalition government’s cunning plan for their oft-stated assertion that private rent levels will come down.  I doubt it as while they are that cynical, they are not that clever.

One of the factors in the current rental system that is not often discussed is private landlords maintaining a cost differential between their rent levels and that of social housing ones.  The above government rent plans show that differential being wiped away and PSLs will be seeking to maintain or even increase that differential.  Yet for all government power or influence the fact remains that PSLs have the supply of property that government and the country needs and so I fully expect PSL rent levels to increase by far more than the government plans, which in reality is a wish list that can’t and won’t be achieved.

Even arguing against myself here look at the PTMU in the table above.  Currently as a national average the private tenant makes up £56.85 of the market rent, the difference between the market rent and what HB or LHA pays.  This is planned by government to rise to almost £72pw by 2015 and to a staggering £98pw by 2020.  It’s as much as case of tenants not being able to afford to live in private rented properties as PSLs not wanting to accommodate them.

Private sector landlords (PSLs) will not allow these official coalition plans to come to pass as they are incredulous and beggar belief in the ‘market’ they laud on a daily basis.  The market will always win out is another of the governments dogmatic mantras so why is their plans for rent levels and the benefits they attract the exact opposite in thinking?

I do expect an increasing percentage of PSLs will stop accommodating benefit claimants yet it would be a stampede and mass fleeing of that market if these plans come to pass.  Even if they do the increased pressures it would place on social housing landlords, already pressed, will be astronomical.

In summary, the rent inflation projections and attempts to limit LHA to below market rent figures just won’t happen and this just exposes that the government plans are built on sand and have no credulity whatsoever.

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.