Tory overall benefit cap means the social landlord cannot afford the tenant on benefit !!

IF the Tories are NOT voted out on 7 May 2015 then the social housing model is dead and (a) social landlords will go bust, and (b) the social tenant will be evicted and become homeless and all due to the Tory benefit cap policy.

That hugely bold statement is not as political as it may appear as the proposed benefit cap reduction to £23,000 in London and 10% less than than in the rest of the UK in the regional overall benefit cap planned WILL mean that social landlord, yes that is SOCIAL LANDLORDS, will be unable to accommodate so many household groups if they are on benefit as they are too much of a financial risk.

That opening bold statement is true and valid and it is horrific!

The bedroom tax reduces housing benefit is the property is UNDER OCCUPIED yet the Tory benefit cap is to reduce housing benefit by even more that the 14% or 25% bedroom tax cut if the property is FULLY OCCUPIED and the household is not working or even a disabled household.

In May 2010 when the Tories took office the social housing benefit tenant would get 100% of their rent paid in Housing Benefit and there were no deductions as the bedroom tax or the benefit cap had not been introduced.  The chart below shows this:

Regardless of the household size denoted in the left-hand column (1P1C = 1 Parent 1 child etc) full housing benefit was paid.  The area is 100% coloured in green as this meant then that the social tenant would be accommodated by the social landlord as the financial risks of the bedroom tax for UNDER OCCUPATION and the benefit cap for FULL OCCUPATION had yet to be implemented by the Tory-led coalition.

Yet now look what happens to the same graph if the Tories are not voted out and they implement the reduced overall benefit cap and the regionalised benefit cap

All of the areas shaded red represent when full housing benefit will NOT be paid due to the Tory benefit cap and these households become a financial risk too far for social landlords to chance.  Note well that the reductions to HB from the benefit cap in the above are far higher than any bedroom tax deductions.

So we find that a social landlord in London cannot afford to accommodate a household larger than a 2 parent 2 child household and on benefit in a property at a social rent level.  For the London social landlord operating the Affordable (sic) Rent model (AR) the 2 Parent 1 child household is a financial risk too far as is all other larger household sizes.

For the provincial social landlord, that is everywhere bar London, they cannot afford to accommodate any household size bigger than the 1 parent 3 child one on benefit at social rent levels.  At AR levels they cannot afford to accommodate a larger household than the 1 parent 2 child one on benefit.

LET ME HAMMER THE POINT HOME SO THAT EVERYONE CAN UNDERSTAND

The 2 parent 3 child (2P3C above) in London will get a maximum HB of £106.23 per week.  A 3 bed social rent property there is circa £135 per week meaning they will have to find over £1500 minimum per year from their welfare benefits to pay the cheapest social rent.  They cannot afford to do this and will be evicted and made homeless

The 2 parent 3 child household in Liverpool or Hull or Newcastle or Birmingham, that is anywhere outside of London, will get a maximum of £63.52 per week in Housing Benefit and typically will have a social rent of £100 per week.  They will have to find £1900 per year to pay towards rent from their welfare benefits and will also be evicted and made homeless.

The benefit cap applies to all those of working-age.  To be exempt from it you need to be a pensioner or working at least 30 hours per week and earning £12k per year.

If you are disabled and unable to work but not in the support group of ESA it still affects you, so this policy does not just affect those out of work, that is those called unemployed, it affects the sick and the disabled who are unable to work.

Yes sick and disabled households will also be evicted and made homeless and cost the taxpayer so much more in taxes!

Hundreds of thousands of social tenants will be evicted because of the benefit.  Even more will be evicted from privately rented too and there will be nowhere they can live except in unsuitable temporary homeless accommodation provided to them on a take it or leave it basis by their local council.

That means a 2 parent 3 child household will have to live in two rooms of a Travelodge at best and more likely temporary accommodation not even up to that standard.  It means the 3 children’s education and life chances have been inflicted a mortal blow and they will not succeed at school and note too that temporary unsuitable accommodation could be miles from their schools as well.

Get a job or lose your home, even if you are sick or disabled, is what this outrageous benefit cap policy means.

Every social housing professional reading this has just gone ashen from the lowest housing assistant to the Chief Executive.  The finance directors have all just slashed their wrists as it does mean that the social housing model is non financially sustainable and many social landlords will go bust if the Tories are not voted out of office on 7 May.

They will also know that because private rent levels are higher than social rent levels and at least 25% above social landlord ‘affordable’ (sic) rent levels that the private sector landlord will be evicted all benefit tenants and refusing to take any benefit tenant other than the single tenant.

If you think the social landlord finance director has it bad, the finance director of every local council in the country has slashed both wrists and given birth to multiple litters of kittens!!  Temporary homeless provision will need to increase ten-fold due to the Tory benefit cap proposal and so will its cost which will be at a conservative (no pun and pun intended) estimate at least £5 billion per year more than this benefit cap policy could ever save.

But let me put this in the simplest words possible that a member of the general public with no idea whatsoever of how housing or housing benefit works:

The Tory overall benefit cap policy will see half a million children in temporary homeless accommodation next Christmas and will cost every taxpayer at least £200 per year more in tax 

Dear housing colleague – the Homes for Britain rally said you have never made a fuss before but now need to.  Bloody well hurry up else you won’t have a job in 6 months time

Dear Tory (and all other) local councils, Are you happy that Tory central government has just transferred massive additional cost and additional workload to you yet giving you less money!

Dear Joe Public, Are you happy to pay hundreds of pounds more in tax to see hundreds of thousand more children in unsuitable and life-damaging temporary housing and tens of thousands more people on the streets because you think a cap on benefits leads to a reduction in your taxes?

Dear Labour Party – What the hell are you doing saying you will keep all of the Tory welfare reforms such as this benefit cap with the exception of the bedroom tax?  Are you capable of seeing what the above means and that should you take office and adopt this policy you will see the welfare benefit bill skyrocket and totally bugger the economy for which you will be blamed!!

Dear everyone,

Note too that the current political row that sees the Tories saying they will make a further £12 billion of welfare cuts yet will not say where from will have to be increased because they wrongly assume the benefit cap policy will save money yet will cost at least £5 billion per year more.  As such that £12 billion target now becomes £17 billion and note well the £12 billion cuts is just for the first two years of a new Tory administration and not £12 billion over the full 5 year life cycle of a parliament.

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Notes

To those who will ask about the workings out of the above two simple graphs

(a) The amounts of welfare benefit and child tax credits (that is all bar HB) each household unit gets that table is in my blog here entitled The benefit cap equals 1 MILLION men women and children evicted from social housing! 

(b) The illustrative figures used for social rent and AR rent in London and the provinces are below:

BEDROOMS	LIVERPOOL SOCIAL RENT	LIVERPOOL  AR ‘AFFORDABLE’ RENT	LONDON SOCIAL RENT	LONDON AR ‘AFFORDABLE’ RENT
1	80	95	95	200
2	90	105	120	250
3	100	115	135	300
4	110	135	150	350

The figures above are illustrative of typical rents in and out of London.  Yes a 3 bed social rent in Hull may be £10 pw less but in Birmingham or York or Norwich it may be £10 pw more so while they do differ the figures are perfectly valid ones when averaged out.

For everyone in social housing please please please do not say to me what you did when I presented the benefit cap to the CIH SE conference over three years ago that regardless of cost social landlords will always accommodate those in need.

I appreciate and love the sentiment people but no social landlord can afford to do this as the figures clearly show and it is time to make one hell of a bloody fuss as your job and your sector depends on it.

 

 

 

 

 

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