For his next trick IDS will make poverty and world hunger disappear overnight reader. He is at best an illusionist and more correctly he is a consummate liar and never more so than with the benefit cap.
The myth surrounding the benefit cap of IDS is unparalleled. He has persuaded the general public that the overall housing benefit cap to give it a name resembling its operation must mean a cap leads to a reduction in housing benefit bill.
Just as night follows day putting a cap must mean a reduction in cost right? It has to be the case surely? Yet the fact from the official figures released, ironically, by IDS and his DWP, prove without a doubt that the OHBC and the LHA cap and the SAR cap and the bedroom tax has resulted in an INCREASE in the housing benefit bill.
The detail is here and reveals the overall HB bill has increased by £440 million per year despite the four welfare reform policies which all set out to reduce it.
Unlike the bedroom tax which has had universal effect across the country the benefit cap, the overall housing benefit cap (OHBC) has had limited public scrutiny. The selling of it by IDS as nobody who is workless should get more than the average household income is deliberate sleight of hand.
IDS wants the public to believe that workless means lazy unemployed scroungers, yet the OHBC affects those who are unable to work, what the English Housing Survey labels ‘other inactive’ which includes those who are sick and disabled and more than two-thirds of other inactive live in social housing.
As the above shows 847,000 of those classed as other inactive live in social housing and just 388,000 in private rented housing and significantly these are precisely who is targeted in the soon to be reduced overall housing benefit cap and that presents a huge problem for social housing.
The OHBC applies to the tenant in the ESA working group and exempts those in receipt of ESA and in the support group. It means:
- all social landlords need to collect extremely precise welfare benefit data on all of its tenants which they currently do not have to assess risk of arrears through the benefit cap applying or not.
- landlords need to keep this welfare benefit data up-to-date and extremely accurate in order to assess risk of arrears from the 85% of social tenants – 3.3 million out of 3. 9 million – who receive housing benefit.
- landlords also need to know as soon as one of their tenants on housing benefit becomes pregnant as a new child gives the tenant £67 per week more in child tax credit yet reduces the residual maximum amount of housing benefit that tenant can receive as the OHBC is a zero sum game
There are many more consequences and most notably that social landlords cannot afford to accommodate the tenant with 3 or more children or the tenant profile risk; and the ubiquitous 3 bed social housing property becomes a toxic financial product for that reason, the stock profile risk.
Yet the knowledge deficit risk – that is what precise welfare benefits the tenants receive – is perhaps the hardest one for social landlords to assess the overall risk to arrears, eviction costs and homelessness from the reduced OHBC.
The ESA example above does means that in order to assess financial risk that ALL landlords need accurate, very specific and up-to-date welfare benefit data on tenants. The private landlord will not bother making any distinction and will refuse to house any tenant on ESA as the cost of collating that data is a huge one. The social landlord has no choice but to find out this very precise and very personal data on its tenants.
Therein lies the problem. The social tenant will have to volunteer this information that its social landlord desperately needs, yet the social tenant has a deeper mistrust of its landlord all down to the bedroom tax which directly attacked the landlord:tenant relationship, and in which social landlords bombarded its customers, the tenant, with red-inked letter saying pay your rent or else.
Yes a generalisation in part but nonetheless a very valid point and a policy I repeatedly attacked and called social landlords inept for adopting as it was always going to come back and bite landlords where it hurts. By contrast I praised the likes of Coast & Country (CCHA) who financially supported its tenants to appeal the bedroom tax and that now seems incredibly good and extremely perspicacious business practice.
CCHA tenants know their social landlord was always behind their plight unlike the vast majority of other social landlords and so when they approach their tenants they will get a much better response from tenants willing to share their precise welfare benefit data with the landlord because CCHA tenants have that prized issue – TRUST! CCHA tenants trust their landlord far more than other tenants and CCHA by this simple action and intent will fare much better than other landlords in acquiring tenant WB data and as was part of the original intent receive far more in rent payment when direct payment of HB goes to the tenant.
I am aware of other social landlords who are paying the bedroom tax for some tenants in return for an acceptable behaviour contract – mostly ensuring gas safety checks, avoidance of sanctions and ASB – though not limited to that and such conditional issues now have to be considered by all landlords. This can be seen as a something for something issue if you will, yet when it comes to the absolutely critical collection of tenant welfare benefit data very few social tenants will give it freely or trustingly on a something for nothing basis to the landlord.
To be blunt, the social tenant who is now asked by the landlord for its precise welfare benefit data is most likely to tell the social landlord to go **** themselves – and because of the way their landlords treated them in the bedroom tax with the red-inked bombardment of pay your rent or else, or even pay it or we will inform social services who will take away your kids in one extremely offensive letter from a very thoughtless social landlord.
Thoughtless? – Yes another of my consistent themes has been that social landlords do not think and the consequences of the red-inked bombardment and social services will take your kids communications will definitely impact with the critical knowledge deficit risk in the OHBC. The same social landlords will need their tenants to trust them now and frankly tenants do not trust their social landlords because of what has gone before with the bedroom tax.
Now social landlords have another 5 years of the bedroom tax and if that was not bad enough they now have the direct payment, monthly payment and so many more abject horrors of Universal Credit to deal with…but the OHBC is the most financially damaging and risky policy of the lot for social landlords and for the social housing model itself.
It is time they did think for once and then take decisive actions. Let me give them a little nudge…
Prior to May 2010 social landlords had no need to know the precise welfare benefits of their tenants. All they needed to know was is the tenant in receipt of Housing Benefit or not and if so the full rent would be paid. Many welfare benefits automatically passport the tenant onto Housing Benefit such as Income Support, Job Seekers Allowance and ESA and here is the official data from the DWP on which welfare benefit passported tenants onto Housing Benefit
Note the rise in ESA claimants passported onto housing benefit.
The latest HB figures published last week see ESA with 1,114,645 passported compared with 580,794 for Income Support; 395,955 from JSA and 925,559 from Pension Credit. The largest passported benefit to housing benefit is ESA by some distance and all social landlords need to know whether their ESA tenants are in the support group and exempt from the OHBC or whether they are in the working group and affected by the OHBC.
Cue social landlords now realising that they really really DO need to know and collect, at their own additional and significant cost, the very precise and full details of all the welfare benefits their tenants receive…and cue social landlords now saying why the hell did we bombard our customers (sic) with red-inked pay your rent or else letters (and texts and phone calls and doorstepping) for! We should have THOUGHT of that! Precisely!
How can we persuade our tenants (our – yes always the possessive) to give us their precise welfare benefit data? How do we keep this up-to-date and 100% accurate which we also critically need? How can we ensure our tenants inform us of a son or daughter moving out or even back in as the Tories banning housing benefit for those aged under 21 will see them go back to the family home and cause a whole host of non dependant deduction problems for or tenants? How the hell can our tenants trust us? How could we have been so thoughtless and inept to forget our purpose with the knee jerk get the rent in at all costs approach we had (and still have?) in the bedroom tax?
That’s not schadenfreude or yes I was right and now I am ramming it back down your throats housing people – it is a painful reality and yet another vital and necessary wake up call. You have lost the trust of the tenant and that was incredibly naive and foolish and extremely thoughtless. The focus on social landlords immediate needs to get the money in and with complete disregard to the consequences of that and especially how it was and still is perceived was taking your customer for granted.
It was a Ratneresque policy that your customer wants and needs did not matter. Carry on wrapping that up with but we need to get the money in and other other superficial rationale, it is HOW you went about it and what the very adverse consequences of that are now and now that you realise you need good tenant relationships based on the trust you have lost with your recent actions.
Social landlords can no longer adopt a wait and see policy, the same reactive but never proactive strategy they invariably adopt. The welfare reform (sic) policies are truly radical and require radical consideration and then radical and proactive actions. Simply tugging your forelock at what morsels government tend to throw at you and blithely saying there is nothing we can do will see you fold and become non-financially sustainable.
The subject here is just another of the not so obvious but highly significant impacts of the Overall Housing Benefit Cap policy and one of scores of very significant risks to your survival that you have acquiesced to by being silent and inactive and thoughtless. When you finally get rid of the closed mindset and the we have always done it this way one and stop patronising and taking for granted your customer, the tenant, then maybe you will be ready to consider the solutions to the above and finally think as you should have done in the first place.
In the past few weeks I have been speaking to many housing professionals at the highest levels who did not even realise the benefit cap means that the only benefit to be capped in the vast majority of cases is housing benefit, just 85% of the lifeblood of social housing. If anything confirms that social housing has not thought….
I can generally find and access official data quite readily yet for the past month or so I have been seeking a breakdown of ESA claimants into the Support Group (SG) who are exempt from the OHBC and for ESA claimants in the Work Related Activity Group (WRAG) to whom the OHBC applies.
I have found the first few years of ESA from 2008 to August 2010 (below) which shows that 72% of ESA claimants are in the WRAG and therefore liable for the OHBC. This would mean if the same percentage of initial ESA cases remains the same that 72% of the 1,114,645 ESA claimants passported onto housing benefit are liable for the benefit cap.
In numbers that means 802,544 ESA claimants on housing benefit are potentially hit by the OHBC and 312,101 are exempt. You see the scale of the issue and why all social landlords need to have very precise data on tenant welfare benefits!!
Yet I suspect and there is very strong anecdotal evidence to suggest that there are more than 72% in the WRAG and that it has been overt DWP policy to place as many as possible in the WRAG group and as few as possible in the SG for ESA. Anyone got any official data they can share?
Meanwhile here’s the original data which shows a trend in any case of placing more and more in the non OHBC exempt WRAG