Late last week a letter regarding the welfare reforms was sent to all Chief Executives of Local Authorities by Bob Kerslake, Head of the Civil Service and Robert Devereaux, Permanent Secretary at the DWP regarding the welfare benefit reforms. In terms of provenance it doesnt get much higher than this as to what is to come
The letter was interesting for many reasons which I discuss below:
1. SAR and the bedroom tax.
Under the section entitled ” Social Sector Size Criteria” it says:-
From April 2013 the applicable maximum rent will be reduced by a national percentage rate depending on how many bedrooms the household is considered not to require. A 14% reduction will be made for those who under occupy their home by a single bedroom and a 25% reduction for two bedrooms or more. “
This national percentage – the bedroom tax – has been known about for some time though it has always been discussed as £14pw for underoccupying by one bedroom and £28pw for two bedrooms, although this will vary from area to area.
“..how many bedrooms a household is considered NOT to require…” is the principal criterion for this bedroom tax. We need to bear this in mind when we look at how the social sector size criteria will work. The letter goes on to say:-
“The assessment of requirements will be against the same criteria currently used for LHA: a bedroom will be allocated for a single adult or couple; every two children under the age of 10 or each child over 10 if they are different genders.”
The same criteria currently used for LHA is the new (social housing) bedroom tax in other words so a single pensioner occupying a three bed property after the children have flown the coop will receive HB based on a 1 bed just as LHAcriteria does this in private rented housing. Yet LHA also includes for the private tenant the shared accommodation rate or SAR for a single person aged 34 and under and the criteria there is even a 1 bed property is 1 bedroom too many. So when Devereaux and Kerslake say above that the LHA allocates a bedroom for “…a single adult..” they either do not understand how the LHA system operates or they are proposing to implement a variant of LHA for social tenants under 35.
Which one is it? Incompetence or an exemption for social housing?
Hopefully its the latter as if the SAR which applies to the private tenant now and the same criteria is used for social housing tenants, which it will be after April 2013, then how can SAR not apply to social tenants? I discussed this in many terms last week here and here and here and finally sent an open letter to the Housing Minister Grant Shapps. How can the same (LHA) criteria apply to social tenants yet somehow exclude the SAR for social tenants? It makes no sense at all. It is not equitable in any sense and so the rationale to apply the bedroom tax is compromised, and as the stated purpose is to save the HB bill the savings would triple as there are 177,000 single social tenants aged 25 – 34 on HB to add to the 88,000 single private tenants on LHA. The ‘added’ savings would be some £430m per year – not an insignificant amount.
I emphasise the ‘same criteria’ in the same way I emphasised the term ‘replicate‘ in the bedroom tax impact assessment in my first post on the SAR issue.
That impact assessment said: –
““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”
If its the same criteria to be introduced and this same criteria is replicated then SAR must apply and the Devereaux / Kerslake letter confirms that!
Since I rasied the possibility of the SAR applying to social tenants (through the backdoor of the bedroom tax) there has been unanimity across the sector that if it does apply then its a highly significant change and one that leaves the single under-35s with no viable housing options.
One of my biggest gripes with this is that the matter has never been discussed throughout the Welfare Reform Bill at all. In reading the impact assessments for the SAR and the ‘bedroom tax’ separately I can see why it hasn’t been discussed in the Commons or the Lords. Yet reading them together does reveal that the ‘bedroom tax’ using the ‘size criteria’ of LHA and ‘replicating’ LHA rules to the social sector means that SAR can apply to social tenants.
The housing sector must now assume that SAR will apply to social housing from April 2013 along with the rest of the bedroom tax cuts and only be dissuaded from that view by clear and unambiguous guidance to the contrary from the DWP.
Hopefully, I am wrong in this and an exemption will be applied to social housing and/or Devereaux and Kerslake have got this wrong. The rest of the letter does reveal candid incompetence which I comment upon elsewhere.
On the Nearly Legal blog site I am being hargangued on this by “Bea” – No idea who this is and they are saying rather condescendingly have I ever spoken to the DWP who Bea is saying (verbally of course) that it wont apply. Moreover the latest comment from “Bea” is that the shared accommodation rate is not part of LHA! Perhaps reading the definition on the governments directgov website under the title “What is Local Housing Allowance” would change her mind:
“If you are renting a property or room from a private landlord the Local Housing Allowance is used to work out how much Housing Benefit you get. The amount of Housing Benefit you get will depend on where you live and who lives with you. Local Housing Allowance rates are set for different types of accommodation in each area. The rates range from a single room in a shared house, up to properties with four bedrooms.”
If the view of “Bea” is to be believed then “…rates range from a single room in a shared house…” does NOT refer to SAR!!!
The SAR is an integral part of LHA and not siome adjunct or indirect addition that some would like to believe. So when LHA criteria is replicated and applied to social housing from 2013 the SAR will apply.
Unless of course DWP take the ridiculously hard step of putting what they say verbally into writing happens!!
PS – Take the above LHA definition and read again with the following fact added:
If you are renting a property or room from a private landlord (and after April 2013 from a social landlord) the Local Housing Allowance is used to work out how much Housing Benefit you get. The amount of Housing Benefit you get will depend on where you live and who lives with you. Local Housing Allowance rates are set for different types of accommodation in each area. The rates range from a single room in a shared house, up to properties with four bedrooms.”
Anyone still not worried that SAR could or will apply next year to social tenants? Anyone still believe the DWP dont need to clarify the above in writing?