They don’t like it up em Mr Mainwaring? No I’m not comparing social landlords to Nazis or myself to Corporal Jones for that matter but social landlords raging about HOW I rage they are inept at lobbying and not a sector and haven’t looked at welfare reform properly and their response to the bedroom tax has been truly inept, rather than WHAT those criticisms are, is pathetic and has clearly hit a few raw nerves amongst the ‘great and the good’ of social housing.
Let’s try a different tack and with regard to the overall benefit cap proposed change to reduce it from £26k per year to £23k per year.
For a year or so before I started discussing the bedroom tax to a wide audience I posted many pieces on the overall benefit cap, but to a fraction of that audience. The bedroom tax audience includes the tenant the general public, the activist as well as the housing professional while the OBC arguments were only read by a small part of the housing sector.
Yet when invited to speak at conferences in the Midlands and the South East those housing audiences fully accepted the figures and accepted the systemic flaw in the OBC but were of a view that social housing’s ethos would not see social landlords turning away the mos vulnerable despite the fact the figures proved they could not afford to house these groups. This then led to a ‘view’ that oh the OBC only affects private landlords with high private rents and mainly in London but not social landlords across the UK.
Yet all of these typical social landlord ‘views’ and positions were wrong then and are especially wrong now that we have proposals to reduce the overall benefit cap to £23k outside of London.
Firstly it has always been the case that 46% of households affected by the OBC reside in social housing.
This was stated in the original and purported impact assessment of the DWP and despite the overall number of households affected reducing sharply – more down to naive and political posturings of the coalition than anything else – it still remains that 46% of those affected live in social housing. Therefore the OBC has never been just a private sector issue and has always been one that affects social housing.
Secondly, there is a fundamental misunderstanding of how the OBC works amongst the apathethic response of social housing.
The key variable in the OBC is household size not rent level and the larger the family size the greater the chance of the OBC applying. There is some contention in that which I will clarify below yet most larger sized households now live in social housing not in the PRS and the way the PRS impacts will see ALL larger sized households can ONLY live in the SRS which means the OBC is a huge transfer of larger sized households from the PRS to the SRS. This is especially the case when the overall cap figure is reduced as it now being proposed which only hastens on the systemic flaw in the process it has always had.
At this point let’s look again at what the overall benefit cap is and how it works.
We have a national welfare benefits system in the UK and so all welfare benefit levels are the same in London as they are in Land’s End of John O’Groats or Cardiff or Belfast hence we know with some certainty that a couple with 4 children will get the same level of welfare benefit and child tax credits wherever they live in the country. This is £396.69 per week for the two parent four child household (2P4C)
The way the OBC works is to start with the cap figure currently £500 per week form which we deduct the welfare benefit / child tax credit amount of £396.69 which leaves £103.31 as the maximum amount payable to that household to pay towards rent or housing benefit. The sum of £103.31 per week is not a huge danger or change to social landlords from existing social tenants.
Yet the proposal to reduce the cap figure to £23k per year or £440.80 per week sees the 2P4C household have a maximum housing benefit of £440.80 less £396.69 for the couple with 4 children gives a maximum HB entitlement of just £44.11 per week and that is a huge problem for social landlords.
Put simply a social landlord cannot afford to accommodate a household of a couple with four children anywhere in the UK. That means existing tenant households and new proposed tenant households and that is going to have an inevitable affect on social housing allocation policies.
So instead of my raging about how the social landlord response to the reduction in the OBC to £23k per year was ONLY this will affect development, which deserves to be raged against, perhaps this softer approach will make social landlords wake up and smell the coffee over what the OBC means by consequence. Social landlords have to challenge this absurd and highly damaging proposal for the sake of their own bottom lines and for the sake of social housing per se. Yet as I have ‘raged’ many times social housing is extraordinarily inept at lobbying and is highly reticent to challenge despite ‘challenge’ being one of the four C’s of Best Value and despite the fact that all all industries (or sectors) lobby against any policy which adversely affects them but social housing does not.
Yet this is more than just existing social tenant households as this proposed reduction in the OBC clearly affects existing private sector tenants and of course affects smaller household sizes in the SRS who now and in the future have an affordable (sic) rent model tenancy at a much higher rent level.
The average AR rent level is £134 or so per week and a couple with 3 children will only receive a maximum HB payment of £110.48 from the reduced £23k / £440.80 per week OBC level. If the AR household loses its employment then that household cannot afford the AR rent. Given that everyone has been pre-warned that interest rates will rise the likelihood of a working SRS household losing a job rises too (and is just one contextual factor that needs to be considered) and the non-working AR household has less chance of securing employment as well.
What if the wife of the 2P3C household gets pregnant? Excuse the dumbing down of this but many pregnancies do happen by accident and are common circumstances that now become far more likely to mean existing tenant households are no longer able to afford the cheapest form of rented accommodation in social housing and social landlords are, in financial terms, unable to afford to accommodate the larger household? What does that mean for social housing and social landlords?
Frightening stuff yet what the really scary aspect of this proposal to reduce the overall benefit cap I have yet to discuss; namely the private renting household.
A couple with two children (2P2C) household receive £263.96 per week in welfare benefits and child tax credits leaving £176.84 per week as he maximum they can receive in housing benefit or LHA. A look at the the 3 bed LHA rates across the country -and bearing in mind LHA tends not to cover the full rent in any case – reveals that with the OBC reduction proposed the couple with two children cannot afford a private let in all of the Home Counties and much of the South East as well as Berkshire, Hertfordshire, Bath, Southampton, Bournemouth and Edinburgh. Such households will be evicted and made homeless.
The local councils have a duty to find suitable accommodation for such unintentionally homeless households and as such they cannot discharge that duty into the local PRS and only into the local social housing sector which massively increases demands on the social landlords there. Yet across the areas above, and unlike the North, there is no surfeit of larger sized social housing properties to accommodate these PRS families.
These relatively small PRS families with two children cannot simply be bussed ‘oop North’ as these Southern councils will want to do to avoid high temporary homeless costs as London councils are now doing, simply because the suitability of such moves with children in local schools denies that route, at least in the main and without consent.
I cant help myself from commenting that this coalition and especially McVey who tells social landlords hey should be sub-dividing larger empty properties and build 1 bed units will shortly be telling the same to abandon that and start building larger sized SRS properties!
Social landlords are going to face huge demands to accommodate the larger sized households with the proposed reduction in the OBC yet they simply cannot afford to accommodate them as I explain above as the arrears risk is far too great for them and a risk way too far. Or, indelicately put, the private landlord is going to dump its problem cases on social housing and refuse to take any benefit claimants in far greater numbers than they do now.
You can see why I want to rage like crazy at the typical social housing response to the proposed reduction in the cap figure from the OBC. It is a seismic change with huge consequences for social housing (and for LA’s too) yet the only response has been this will reduce development. Combine this truly back of a fag packet policy proposal with Brandon Lewis the housing minister saying social landlords should no longer receive grant and you see just how badly thought through policy is.
Taking away grant is coalition speak for bring more AR units to market. Yet that will just exacerbate the affordability problem outlined above and bring more SRS households into being hit with the reduction in the OBC. Joined up incompetent policy.
Hopefully, the above ‘non-raging’ discussion above will bring social housing to its senses. It must make them realise they truly have to become a sector, a unifying body not a collection of individual social landlords, and start to lobby government on a proactive as well as reactive basis. I despair at social landlords and the CIH and NHF who simply say policy X is wrong but do not say WHY it is wrong and do not say WHAT the often horrific consequences of the latest ill-conceived policies are vis-a-vis social housing. I despair at the crass ineptitude of the “sector” which resolutely fails to do this and fails to challenge the latest hare-brained housing policy coming out of this coalition especially but also evident in previous administrations.
Social housing if it continues on its naive way with its lack of thinking its lack of lobbying will die and die quickly and the above is without mentioning the really big danger of direct payment of housing benefit to tenants.
One final point. This morning I read a blog from John Popham on this issue of social housing lobbying which said perhaps landlords should not lobby and instead encourage their tenants to register to vote as the way to challenge (social) housing policy. John is excellent at what he does in terms of using social media and technology and is becoming very influential in social housing along with his adherents in social housing who believe that only innovative blue-sky thinking such as drones and free tablets to tenants and the telling of stories and not of facts is the only way to influence and the only way forward.
Yet as the overwhelming majority of those not registered to vote are the under 35s the simple facts that 2.1 million or so of them reside in the PRS (51% of all PRS tenants) but only circa 0.7 million of them live in social housing (just 19% of all SRS tenants) then those pesky facts raise their annoying ugly heads again.
Social housing is far too beneficial for the country at large to be left to being supported by ill-conceived responses just because it accords with the latest fad! Social housing has been around for over a hundred years and deserves far better than that by way of response to the devastating and radical attack the welfare reforms of one coalition government which seeks to kill it stone dead in just 5 years.
Rage? Yes rage is deserved and needed and needed now. Social housing needs to react to these radical attacks with radical responses and needs to fight and challenge. You never know just maybe if it does it may even promote proactive messages some time forward just to remind whatever government is in power and to educate the general public that it saves the country a bloody fortune and is not populated by 4 million White Dee’s!