Housing Benefit – the myth and the facts and how IDS dupes the Grauniad!

Yesterday the Guardian Housing Network – usually a very reliable source of housing and other data – became the conduit for the Tory led coalitions strategy of saying they have controlled the ‘burgeoning’ HB bill. The HB bill has increased sharply under the coalition despite the bedroom tax, despite the LHA caps, despite the overall benefit cap and other welfare ‘reforms’ introduced by this government to reduce the bill.

Below is a simple graph of the HB costs from 1997 and using official government figures:   The above can highlight a number of simple ‘knowns’ such as:

• The HB bill has been allowed to ‘take the strain’
• The HB bill increased from £11.64bn which the Blair government inherited in May 1997 to £20.44bn when they left office. An increase of 75.6% in 13 years and a yearly increase of 5.8%.  It did not double under Labour as has been claimed by Shapps, IDS, Freud, McVey and Hopkins (he is the scarlet pimpernel and the current housing minister in case you want to know) – Though it did triple in the 10 years before that under the Tory governments of Thatcher and major from 1987 when it was £3.8bn
• The overall cost of the HB bill has increased and increased more under this coalition who maintained in June 2010 that their welfare reforms would reduce the HB bill by £2bn per year by 2014/15.
• The HB bill is currently £3.5bn per higher than when the coalition took office and therefore £5.5bn over the coalition target!

Hence the bill has increased and the welfare reforms have failed to reduce the HB bill. Yet what do the Guardian publish yesterday?  An article which says in its opening paragraphs that:

The housing benefit bill will reach a new high of £25bn a year by 2017, according to new government estimates. The bill is estimated to have decreased by £425m last year, during which a number of welfare reforms affecting housing benefit took effect, but is set to increase again before reaching £25.4bn in real terms by 2019. However, the increases are significantly less severe than those that occurred before last year’s fall: the bill increased by more than £800m between 2011-12 and 2012-13, but the average annual rise for the next four years will be just £212m.

Make no mistake reader the Guardian are saying the HB bill is under control and even fell last year and they even put in a nice simple graph to evidence this :

Notice the apparent dip reader from an alleged peak in 2012/13?  They say a picture paints a thousand words and the Guardian picture above suggests that the HB bill has. at least temporarily, been brought under control by the coalition; perhaps you may think the LHA welfare caps introduced in 2012/13 have worked to explain the Guardian’s dip above?  The dip that in fact never happened as the DWP’s own official statistics show The Guardian has been duped by the DWP release of projections of future HB costs here which includes some highly ‘convenient’ re-writes of previous official HB figures which they have released. A quick look at the HB graph published by the Guardian suggests the HB bill peaked at just under £25m in 2012/13 yet the actual HB bill according to the official statistics was £23.3bn and this explains the apparent dip the graph shows. I have commented on the HB bill for the last 4 years and noted its rise and rise each month and then each quarter as the DWP has changed the frequency of the official data.  Every release says how many claimants there are and how much is the average HB paid and so at May 2010 we see the claimant count at 4,751,526 (table 4) who on average received £84.20 per week (table 5).  Multiply the two and the HB bill a May 2010 was £20.88bn Using the same simple and obvious way to compute the overall bill we see the following total figures:

Date                Claimants         Weekly average          Total Bill

May 2010         4,751, 536         £84.20                   £20.88bn

Dec 2010         4,817,161          £84.58                   £21.26bn

Dec 2011         4,952,255          £86.91                   £22.46bn

Dec 2012         5,038,044          £89.17                   £23.44bn

Nov 2013         4,985,508          £89.91                   £23.39bn

(Note latest figs go to Nov 2013 and published Feb 2014) The absolute peak since the election was in May 2013 when there were 5,072,264 claimants each receiving £89.91 for a maximum HB bill of £23.77 billion.

However yesterday when DWP published the projections for the HB bill they have “revised” old figures so that it shows an overall HB bill for 2012/13 at £24.445bn when the actual maximum figure was a full £1bn less than this at £23.44bn. The same ‘revised’ figures then show the actual costs for 2013/14 which magically produces the dip in the graph in the Guardian article!!!  How jolly convenient!!  How politically astute as the Guardian is seen as opposed to the coalition and the public believe their figures (and graphs!) Yet as the figures clearly show the Guardian has been duped by the machinations of IDS’s spin through the deliberate lies and deliberate politicking he has his DWP department put out!

However, duping the Guardian to reproduce these errant figures and allude that the HB bill is under control, despite being a political masterstroke is not the issue.  The real issue is that the £20.88bn Housing Benefit Bill the coalition inherited at May 2010 has increased to £23.44bn  – it has increased by £2.5bn and has not fallen despite all of the welfare ‘reforms’ (to reform means to improve hence the parentheses) which the coalition said would reduce the HB bill by £2bn per year.

The reality is the HB bill is £4.5bn per year over the coalitions own target and the reforms are costing the public purse £4.5bn per year more in Housing Benefit alone. You may also note that the DWP welfare benefit bill for all benefits ‘inherited’ by the coalition was £143.38bn and af the end of 2012/2013 some three years into the coalition it was £161.84bn. The DWP’s own figures show the welfare benefit bill increased by £18,500,000,000 in their first 3 years Yet this is the same DWP presided over by IDS who states over and over again he has corrected and got to grips with the burgeoning and unaffordable and unsustainable bill he inherited from the last lot!

The welfare benefit bill increased by 13% in his first three years and that is well ahead of inflation in that period.

The HB bill is one small part of the overall welfare benefit bill and exemplifies the overall picture of chronic incompetence and back of a fag packet policies wrapped up in the most Machiavellian of spin and rhetoric – the old tell a lie often enough and people will believe it strategy.  And in this case the Guardian unwittingly did and fell for it hook line and sinker!! _________________________________________________________________

I would encourage all to look at the DWP expenditure figures broken down by benefit from 1997 to 2103 as they are fascinating and reveal some very interesting hard facts and especially on disability benefits which our old friend IDS says he has under control and has reduced….Really IDS? Incapacity Benefit has reduced by £2.77bn since the election yet other ‘disability’ benefits we find sees ESA has increased by £5.5bn and DLA by £2bn and Carers Allowance increased by £0.48bn and Attendance Allowance by £0.3bn.

So the £2.77bn reduction in IB is more than countered with the £8.28bn increase in other ‘disability’ benefits making a £5.5bn per year overall increase!

Just one of the issues in the same data that the Guardian did not see or report but far more importantly where are the £25bn worth of cuts to the welfare benefits bill IDS says he has made…you know the welfare benefit bill that has increased by 13% and by £18.5bn per year!! The public as well as the Guardian are believing the IDS hype that he has cut welfare benefits when the figures reveal he and the coalition simply have not done so. IDS is engaging in the cult of personality to hoodwink the electorate, creating a persona of a brave politician taking on the unsustainable and burgeoning welfare state and is aided and abetted by the media in this smoke and mirrors operation. Whats the tagline of the Guardian….”Facts are sacred?” Indeed they are!!

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PS – Below is what the Tories said a month after taking office that welfare reforms would save £2bn per year to the HB bill as I said back in September 2011: Housing Benefit reforms were first outlined very soon after this coalition took office in May 2010.  The extract below from the July 2010 Housing Benefit Digest issued by the DWP explains:

The Chancellor announced a package of Housing Benefit (HB) reforms in his Budget statement on 22 June. It is the most significant and comprehensive reform programme for HB since the scheme was introduced in the 1980s. The background is the budget deficit and the reductions in public expenditure that the Government is making to tackle it. Ministers are clear that the overall cost of HB, forecast to be around £20 billion this financial year, must be controlled and reduced. The package of reforms will save nearly £2 billion by 2014/2015. There are also important policy considerations around fairness and work incentives that lie behind the reforms”

So have the HB welfare reforms worked reader?  Or is the actual figure now at £23.5bn not £2bn less than the £20.8bn the coalition inherited? No its not is it, it is £4.7bn more than the coalition said it would be. Take your pick. Believe the facts or believe the cult of personality, and remember facts are sacred!

 

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Sorry dear reader on a bit of a roll here and thought you would like to see another simple graphical representation of the total welfare benefit spend of the DWP from 1997 to 2103.  Yes that one that IDS says he has cut!

Oh no not IDS the cult fibbing again reader?