Housing Benefit Facts (as at 19 January 2012)
1. Latest overall HB bill is £22.4bn at the end of October 2011 the same as at end of September 2011 HB bill has risen by £1.6 billion since May 2010 (16 months HB figures) and has risen by £100m per month since the coalition took office
2. National averages:
Council house in-payment figure is £71.27pw up from £70.95 last month and there are 3,410 less claimants
Housing Association in-payment is £80.43pw up from £80.32 last month and there are 3,710 less claimants
Private rent is £173.60 pw – HB pays £111.69 down from £112.25 and there are 3,920 fewer claimants
The first notable aspect of the figures is that the claimant numbers have fallen from 4,934,110 to 4,921,920 a fall of 12,330 and 0.25%. Other similar tiny percentage falls occurred in April and June 2011 and yet the yearly figures have risen by 132,430 since October 2010.
The claimant in-payment numbers have risen by 170,390 since the last election.
Looking at the 170,390 increase more carefully we see that 47,150 new claims are in social housing (a 1.435% increase) yet 122,950 are in the private rented sector an 8.4% increase in PRS tenant numbers.
In percentage increase terms the higher PRS claimant numbers could be argued that they come from a much lower base and percentage of tenants claiming HB than the social sector. However, more significantly 72.2% of the yearly increases in claimant numbers come from the private rented sector. That is not a statistic that can easily be dismissed in the same way.
There is no reason why private tenants will suffer more from the recession than social tenants after all so the rise in private sector claimants is undoubtedly a trend and not a statistical blip. As I stated in my comments on last month’s figures the percentage of PRS tenants claiming HB has risen from 34% to 47% in the last three years or from a third to half of all PRS tenants.
Because the PRS is the principal tenure for new claims and because LHA pays on average £111.25 per private sector claimant which is £35.48 more per week compared to the average HB payment to a social tenant the HB bill has rocketed. The LHA payment is 46% more per claimant from the public purse than a social tenant receives.
One genuinely interesting aspect of the 170,390 increase in claimant numbers since the election is that 75% of them, 126,960, come from people in work.
One would expect the numbers of unemployed to increase in a recession as indeed they have yet just 25% of the additional HB claims since the last election are from people not working and 3 times that number are from people in work. So what does this tell us?
1. It tells us that an increasing number of those in work are so low paid that they need to claim housing benefit
2. That those who are in low paid work are increasingly claiming HB.
This is a separate point and must be as the numbers in work have reduced as the number of HB claimants has increased. Further, as the DWP admit in their official statistics from June 2011 reveal that up to £6.7bn of HB is known to be unclaimed which I discussed last month. So whether that huge amount of money that would add 30% to the overall HB bill is not claimed through pride or lack of awareness it would show that a trend is emerging to claim the HB that the claimant is entitled to and take-up rates will increase from the 77% – 86% rates and edge closer to full take-up.
3. This is a serious trend and one that will have very significant implications for the overall HB bill. It also provides significant counter-argument to the politicking and the blame labelling culture of this government. This consideration and investigation into the rising HB claimant numbers reveals that those claiming HB are not workshy feckless ne-er do wells after all. They are in low paid employment.
As I commented on last month we are working with landlords on cost-effective ways for landlords to ensure the HB take-up by their tenants increase.
The current HB bill is £22.4bn and up to a further £6.7bn is known to go unclaimed. In figures the real known HB bill is £29.1bn, the current £22.4bn plus the £6.7bn unclaimed.
Statistically it means on average that landlords seeking to ensure all their tenants get what they are entitled to will increase their HB income by 23%. These figures mean one thing.
That if you are a landlord from the smallest private one to the largest social one, and you are not seeking to maximise your tenants claiming HB now, you will be very soon.
I wonder if Grant Shapps the housing minister still feels that letting HB take the strain is a good policy when the HB bill rockets even further. I wonder whether the sector will finally realise that this policy is in fact ongoing revenue subsidy replacing the initial capital subsidy of the traditional social housing model … and all to pay for low paid employment.
19 January 2012