The Tories £12 billion welfare cut is brilliant – oh and a 10% HB cut across the board!

Subtitled: If IFS and cuts were pots and pans…

The Tory plan to find £12 billion of welfare cuts is brilliant – brilliant political strategy I hasten to add.  Especially clever was the decision to announce it pre general election and even more brilliant NOT to say where such cuts will come from. In doing so it has seen everyone speculate on where these £12 billion of cuts may come from and that is also a brilliant political move as it sees this speculation become the world and his wife flying Tory kites for the Tories.

The latest one is the IFS saying that the Chancellor could cut all housing benefit payments by 10% in his 8 July budget as one element of achieving the £12 billion of welfare cuts!!

 

This post is long but in summary argues:

(a) the IFS speculation is dangerous nonsense at least in legal terms and they haven’t a clue what they are talking about and they clearly have no housing or homeless knowledge so frankly shut the f*ck up;

(b) despite that the 10% across the board housing benefit cut may well come in and totally bugger up housing for the social tenant and the social landlord;

(c) the Tories are stupid enough to do this despite it will cost more; and

(d) social landlords really do need to get their heads out of their backsides and challenge instead of being resigned defeatists and simply shrugging their shoulders.

Read on..

Yesterday the left leaning and Blairite think tank the IFS speculated that one policy may well be to reduce all housing benefit by 10%.  This was further reported on by the BBC website today and also mentioned yesterday on 24Dash from which I first learned of the IFS speculation.

In simple terms the issue is out there because of (a) the need the Tories created for others to speculate upon; (b) others doing the Tories ‘dirty work’ so to speak for them and (c) becomes a known issue so that IF such a policy does in fact come out of the Chancellors emergency budget on 8 July, a mere 4 weeks away, then it is no surprise.

Additionally, and regardless of the merits of that decision to which I will turn shortly, it also by putting this kite flying ‘out there’ enables the Tories a chance to assess what hostility or challenge there is to such a policy without having even mentioning such a policy in the first place.  Of course should there be howls of derision to any such policy flown by these kites the Tories can say it was never our policy in the first place and just the speculation of in this case a LABOUR leaning think thank!

The political strategy of saying we will cut £12 billion yet steadfastly REFUSING to say where those cuts would fall is quite simply brilliant.  In this digital age that sees just a valid 1 per cent of any rumour being seized upon by social media and spread like wild fire across the world then it is also a tactic and strategy we will see more of in the future.

Will there be hostility?

We know and I have commented on this many times that the social housing lobbies could not lobby their way out of a wet paper bag.  They are truly inept when it comes to lobbying and my view on that has only hardened after the hyperbole and 100% lack of any substance the Homes for Britain rally engendered.  That is the one full of passion and fire in the belly of social housing professionals about how important (generic) housing is as an election issue which within 24 hours saw the Tories drop the we are going to give HA tenants the right to buy as council tenants policy which sees the ‘sector’ go into apoplectic moan mode yet actually DO nothing of substance to fight it

So let’s have a look at what this kite flying proposal to reduce housing benefit by ten per cent would mean and the obvious first conclusion is this is the end of the social housing model as social landlords (council and HA’s) between them receive £15 billion per year in housing benefit.

Therefore a 10% cut across the board is a £1.5 billion per year cut to social tenants and social landlords.

Even if the government excludes the pensioner from this 10% cut it would still mean a £1.11 billion per year cut to working age social tenants and the same £1.11 billion per year cut to social landlords. To put that into perspective the bedroom tax cuts on average £14.90 from some 462,000 social tenants or about £360 million per year.  A £1.11 billion cut to working age tenants through this 10% cut would be THREE TIMES the cut of the bedroom tax for the social tenant and for the social landlord.

IF this 10% cut to housing benefit is made then the social tenant and the social landlord are quite simply f*cked.  The social housing model is also well and truly f*cked and there is no counter argument to that.

The likelihood of a 10% cut to HB?

That is the key question and on balance it could well be likely for a number of reasons.

Consistency – The Tories have sold the bedroom tax and the benefit cap on the (very) superficial notion of ‘fairness’ to the general public and to anyone who dissents to these welfare reform (sic) policies.

• The bedroom tax superficial spin is it is unfair for the state to be subsidising shirker to have spare bedrooms, this is a nationally scarce resource and also unfair that the shirker can have spare bedrooms paid for by the state when the ‘hardworking- family’ cannot afford.  It is also unfair that these shirkers can live at the taxpayer expense in prime real estate areas that the same ‘hardworking-family’ cannot afford…blah, blah, blah!
• The benefit cap has been sold on the superficial basis that it is unfair that the shirker gets more than the average wage of the ‘hardworking-person’ (noting of course that the overall benefit cap is a household cap being compared to just the wage and not the in-work benefits and tax credits of just one individual in any household); yet the public lap this up as do the opposition as Labour support the benefit cap and proposals to lower it.

However the bedroom tax was also sold on the unfairness of it cannot be right that a social tenant receives housing benefit for spare bedrooms when the private tenant cannot.

Despite that being a myth and an easily disproved myth that errant assumption is perceived to be correct and largely because in London it is correct, yet it is not in the rest of the country.  For example a single person in Liverpool can receive up to £396 per calendar month in LHA, the private sector variant of housing benefit, and a quick look at any website such as Zoopla or Rightmove reveals that there are about 60 or so 3 bedroomed properties available from private landlords at £400 per month or less.  This is common outside London and the South East.

However, the myth is not only that private tenants cannot have spare bedrooms paid for by housing benefit, which they can, it is that (a) the bedroom tax was sold to take away that inequity in the system; and CRITICALLY (b) that private tenants have to make a top up to their LHA as it does not cover the full private rent. Ergo, if the private tenant has to top up their housing benefit from other sources, it is only right and equitable and fair that the social tenant should top up their rent and receive only 90% of the full rent through housing benefit.

• We can all see IDS and the rest running those arguments and also saying this is an incentive to find work and there are thousands of available jobs (blah, blah, blah!) and we need to become leaner and fitter as a country (blah, blah, blah!) and we need to make the benefit system less of a dependency culture (blah, blah, blah!) and so on and so forth.
• No I hadn’t forgotten we need make social tenants more responsible with the direct payment of HB to them which of course is only what the private tenant has and so is also equitable and fair (blah, blah, blah!)

Yes the direct payment of HB to the social tenant rather than direct to the landlord has caused kittens for social landlords and especially when the pilot programmes of this UC change saw a non payment of rent figure at 6.6% which compares with a 0.5% non payment rate now or 13 time as great.

The DWP (I kid you not) has said don’t worry this will settle down at around 2% after 2 years which is still 4 times as bad as the current 0.5% figure!! And of course the inept housing lobbies have failed to say and especially do anything about this – quelle surprise et plus ca change – Now imagine if the direct payment of housing benefit to the social tenant is now only 90% not 100% of the rent and just how big is that proverbial fan then!?

Yes social landlord you are out of business as your core business model is well and truly f*cked whether you are a council landlord or a housing association – so just why the hell HAs are going apoplectic in words at least over RTB2 and not doing a bloody thing about challenging the welfare reforms just shows how incompetent social housing landlords truly are and how they do not have a clue how to challenge even if they had the insight to see what will happen and they actually grew a set of balls to challenge.

That is not the venting of my spleen, it is all very simple and very obvious good business practice – a concept which escapes social landlords whether they are in the modernist camp or the traditionalist camp  – and the time is too late for mere words it is time for actions and urgent action to challenge the massive attacks the welfare reform policies have on your CORE business.

But that is not the housing way.  We don’t do such things and never have done and even when we have attempted it we never get it changed and most recently in a blog from one social housing Chief Executive…How can you challenge a government with a majority? I will not fight a battle we can only lose!  Aside from the last 5 years being the first time since 1976 that we have had any form of coalition government in the last 70 years which destroys the premise of that defeatist position(!!!) this is not pragmatic resignation this is 100% defeatism and sadly those views are commonplace.

If social landlords won’t fight to save the social housing model then who the hell will?

Social landlord strategy and especially that of housing associations is sod it, we will simply pass on the shit to local councils.

To explain sees the huge increase in evictions that will happen as a result of

(a) bedroom tax accumulation – 2 years many tenant have barely survived another 5 they have no chance;

(b) the massive increase in evictions that the reduced overall (housing) benefit cap will create – and this will be huge as is now recognised finally; and

(c) the likely (?) 10% cut to housing benefit and direct payments and monthly payments will see a huge rise in homelessness – which become a problem for local councils homeless and social service departments to deal with.

This is a buck passing exercise by housing associations and will also include council landlords and ALMOs simply passing the financially headache onto local councils.

Some of the ‘traditionalists’ amongst social landlords are saying..Where will tenants live?  The majority however are saying who gives a shit that will be the council’s problem.

Councils whether the homeless department and/or social services have mandatory duties to find the homeless somewhere to live and to pay for that as well.  When the council comes knocking on the door to take a homeless family if they cannot guarantee the rent will be paid then housing associations – as purportedly social landlords! – will say bugger off or guarantee the rent of the homeless family will not have a roof with us!

Of course it is not quite that simple yet that does describe the valid reality of that position with Sorry old chap we can’t help you this time (and ever subsequent time) being said instead of bugger off!  Local councils will NOT be able to find temporary accommodation for the huge increase in homeless families with children the overall benefit cap will directly cause.  There simply is not enough supply and so local councils will have to pay a premium for that in the first place.

The only way to reduce this huge cost is to find permanent housing for the homeless families yet IF housing benefit is reduced by 10% then there is a huge legal question as to whether any permanent accommodation can be deemed as ‘suitable’ in legal term and so the council’s mandatory duties here can never be achieved.

Yes that does expose a huge flaw in the IFS speculation that such a 10% cut to housing benefit will happen and of course also exposes that the IFS just don’t have a bloody clue what they are talking about when it comes to housing and homeless law and operations.

Reader you decide if the 10% cut will come in across the board.  We know that the Tories despise social housing. We know that all of their welfare reforms are noticeably absent of any evidenced based decision making and are back of a fag packet politically motivated and politically sold superficiality.  We know from the above that a 10% cut does conform to all of the previous welfare reforms (sic) of the Tories and they can and will sell it on fairness and equity based on flawed assumptions.

Yet we also know that the Blairite IFS is doing the Tories dirty work for them and that this supposed think tank simply has not thought at all and that is has not got a Scooby Bloody Doo as to what the implications are of its speculations that are intended to get the IFS some column inches and further the IFS aims and nothing more.

Finally, social housing and alleged sector, please wake the hell up and realise that the social housing model IS under attack and get your lazy consensus finger out of your lazy consensus arse (assuming you can extricate your lazy consensus head out of those lazy consensus arses first) and actually DO SOMETHING.

Oh sorry, I am being too emotive is saying what you have no choice in doing is you want to stay in a job housing colleague?  I do apologise old chap!