Cameron has a go at Housing Benefit costs in SOCIAL HOUSING but ignores HIGHER cost of these in the private rented sector. Young people leave home, which they shouldnt he says, because of the availability of a council flat. This is a further step than the ‘girls deliberately get pregnant because they will get a council flat’ argument and his speech contains much of this. In short Cameron blames social housing for making accommodation available and therefore blames social housing for the cost – which he continually says is £2bn.
In the speech today he said that:-
“There are currently 210,000 people aged 16-24 who are social housing tenants. Some of these young people will genuinely have nowhere else to live – but many will. And this is happening when there is a growing phenomenon of young people living with their parents into their 30s because they can’t afford their own place – almost 3 million between the ages of 20 and 34. So for literally millions, the passage to independence is several years living in their childhood bedroom as they save up to move out. While for many others, it’s a trip to the council where they can get housing benefit at 18 or 19 – even if they’re not actively seeking work.”
Set aside that 16 and 17 year olds cant be tenants in law and this is just ignorance of Cameron and is I argue a minor point compared to the huge gaffe he made in that statement. His implication was clear a trip down the council is another albeit clever way of saying the council provides a flat…for the under 25s who really should be living at home with their parents or sharing. In this he is giving the rationale for the shared accommodation rate (SAR) which cuts HB rates for the UNDER 35s by about 50% .
This currently applies in the private rented sector but not in social housing. Yet the social rented sector still naively believe this wont apply to social housing!!
The total under 25 statistics according to official DWP figures released last week are 385,010. So 175,010 under 25s are in higher cost private housing then and this is the huge mistake of Camerons speech. It reveals that the ‘outrageous’ cost of HB on under 25s is not caused by social housing at all and more importantly the private rented sector receives about 55% – 60% of the overall taxpayers money that goes to under 25s who shouldnt have this benefit. The real abuse of taxpayers money sees this money go to private landlords in the private sector and NOT to social housing. It follows then if Cameron is seriously seeking a debate on HB to under 25s then its not social housing that needs to be regulated it is the private rented sector!!!
Either that or he is misleading the public over a debate and his speech today is clever rhetoric.
The average HB paid in social housing is £77.20 according to the official DWP figures. Yet that covers bedsits up to 4 bed+ accommodation. But lets be really conservative (no pun intended) and say its £70pw. This gives a social housing weekly cost of £70 x 210,000 or £14.7m and a yearly one of £767m (41% of total)
Yet the total HB spend on under 25s is £1.85bn per year. The official figures show (table 9a) 385,010 under 25s in receipt of HB and at an average of £92.05 (table 9b). Do the maths and this is £35.44m per week or £1.851 bn per year. This means £1.084 bn of HB spend on the under 25s is in the PRIVATE SECTOR and is 59% of the spend
Note well that even if we say the 210,000 under 25s in the social housing sector all get the average HB paid to a social housing tenant of £77.20 then this becomes at most £846m per year meaning that over £1bn per year is paid to under 25 tenants in the private sector!
The figures above all show that social housing landlord are not the recipients of HB – this tapayers outrageous largesse – it is the private rented sector.
Cameron goes on to suggest many changes to HB such as non-dependent deductions (rightly its a mess) and wider wefare benefits such as limiting payments for chilren to the first three children, Echoes there of old and long-held Tory views that many feckless benefit claimants simple reproduce to get more benefits and invariably feckless single mothers. And all of this is to be solved anyway by Universal Credit the great welfare reforms of IDS – Yes the same Universal Credit I exposed last week as having a systemic flaw – that it penalises larger families – what a coincidence!!
Cameron says: “There are more than 150,000 people who have been claiming Income Support for over a year who have 3 or more children and 57,000 who have 4 or more children. The bigger picture is that today, one in six children in Britain is living in a workless household – one of the highest rates in Europe. Quite simply, we have been encouraging working-age people to have children and not work, when we should be enabling working-age people to work and have children”
Theres no denying the cleverness of how he has put the point that we have been encouraging working-age people to have children and not work. But this is similarly no denying he is saying welfare benefits encourages people to have more children and that is what has happened. Or is he denying that Universal Credit will address this.
Far be it from me to take all the credit for the fact that Cameron is now finally admitting the systemic flaw in UC that I exposed is right though can’t help wondering why it has taken the Tories 2 years and more to admit this direct consequence!! Of course it also means despite the huge level of debate in the House of Commons, House of Lords and in the media, this matter was and never has been discussed and is a far worse direct consequence than any of the issues that were discussed. As well as being an outrageous impact that will see larger families become homeless and have nowhere to be housed even in the social rented sector and even if they are working it also means severe welfare benefit cuts too.
One wonders whether the compliant Liberal Democrats MPs and Lords would have abstained in such large numbers or even voted against this had they known.
So what Cameron has said today proves that the systemic flaw I exposed that Univeral Credit will penalise larger familieis is true and my doubts about there being some obvious schoolboy error I had overlooked were baseless.
UPDATE: – Link to official HB stats added above and here too – http://research.dwp.gov.uk/asd/index.php?page=hbctb
Tables 9a and 9b are the source for overall numbers and costs. Tables 4 and 5 show average costs of social housing HB