The benefit cap – I’ve only ever asked you think housing people!

Anyone who says they DON’T like to say I told you so is lying!

schadenfreude

Today, Thursday 11 June 2015 is the day when the social housing news is all about the abject horrors of the overall housing benefit cap and how it significantly affects the social housing model and the CORE operations of social landlords is in one view 1 day too soon.

It would have been fitting if the sector had waited until tomorrow as that would have been 3 years to the day since I first warned that the benefit cap is the death of social housing – Yes 12 June 2012 to be exact was when I first said this in one of my dozens of posts from this ‘mere blogger’ about the benefit cap being the death of the social housing model.

The housing news today is in an Inside Housing article and in a Nearly Legal blog and both are required reading for the landlord, the tenant and local councils and for politicians both local and national.  There is even a piece by a Labour MP saying the benefit cap sees 100’s of his constituents evicted because of it with no apparent irony that the Tory Party benefit cap is supported by his own Labour Party.

When I saw these articles I then sought out the first time I had raised this and that it the 12 June 2012 mentioned above and of course the first thing that came to my mind was I told you so, which of course I did utter under my breath!

Yet this opinionated / attention seeking / smart arse / foul-mouthed (delete as or even if appropriate reader) and mere blogger, despite a degree in politics and 22 years working in social housing, quickly turned his mind to a Thank God at last view.

The reality is it has taken the ‘sector’ 2 years and 364 days to agree with me over the benefit cap and I could unleash a torrent of I told you so references to the dozens of fact-laden detailed pieces I have written and how I have since late last autumn when the benefit cap reduction was first mooted by IDS, Osborne and Cameron that it is the death of the social housing model, which it is.

What I have said first and now today is being recognised with abject horror is, in no particular order:

  • Hundreds of thousands of CHILDREN will be made homeless
  • The taxpayer, locally and nationally, will see a huge increase in tax to pay for this offensive policy
  • Local government homeless departments spend will increase by BILLIONS per year NOT MILLIONS
  • The welfare benefit and housing benefit bill will massively INCREASE as a result of this cap reduction
  • The social landlord will not be able to afford to house the benefit tenant
  • The benefit tenant cannot afford even the cheapest rented housing option so where will he live?
  • The affordable (sic) rent model and all AR units are financially toxic
  • The benefit cap is an attack on the CORE of social housing leaving it in no position to develop new housing and so is a much more damaging problem to housing associations than the RTB
  • The social housing model is under concerted attack from this government’s policy despite what David Orr at the NHF or even the Guardian want us to believe

I could add literally dozens of more points to the above such as nuanced ones that social landlords who have relied upon DHP for bedroom tax tenants will see a bedroom tax DHP become as rare as hen’s teeth shortly as the DHPs will all, by financial necessity of the local councils who administer them, go to benefit capped households.

How may more households will be affected by the reduced benefit cap is hugely problematic to assess yet the Inside Housing piece above says a Greater Manchester social landlord predicts a 367% increase, a North East landlord estimates a 2500% increase and a Yorkshire social landlord a 1000% increase in benefit capped households.  Those three landlords alone are estimating an increase of 875 households at the severest risk of being evicted, households that will contain at least 3000 children who become the (massively increased) cost responsibility of their local council.

That is just 3 of the largest social landlords in their local authority area and just 3 out of 350 councils so 3000 children being made homeless times 117 other councils could be 350,000 children made homeless – and just in the first year of the reduced benefit cap policy.

It may not be that high, yet it could be more.  I have number crunched and number crunched and then number crunched some more as to the likely impact and I can carry on doing this till the cows come home and overlaying welfare benefit data with landlords tock profile data and adding in local factors such as Council A has 70% higher ESA claimants than the average so will inevitably have much higher levels of tenant households affected, and so on and so forth.

Yet that is all conjecture and fraught with problems and of course not forgetting pragmatic assumptions that will probably hold such as private landlords unlike social ones who have also been doing these complex projections, may simply just say sod it, it is easier to simply not house ANY tenant on benefit even if they are on DLA for life and exempt.

And just when social landlords have begun to openly acknowledge that their tenants have somehow managed to survive 2 years of the bedroom tax and there is no way they can afford another five years, the benefit cap DHP issue above makes that ten times worse a financial issue for social landlords and of course the shafted social tenant.

This is a bloody mess and a frightening bloody mess, a truly horrific and offensive mess, an amoral policy and much more deserved tags could be placed on this frankly horse’s ass of a policy that allegedly 78% of the general public support.

 

Above I have touched on perhaps 5% of the issues and all those involved with social and private housing need to urgently and radically rethink the overall housing benefit cap.  Throw in the mix the impacts and dynamics of the proposed withdrawal of housing benefit for those aged under 21; the impacts and dynamics of Job Seekers Allowance of £73.10 per week remaining at that figure until April 2018 as will all other benefit and tax credits while social housing will increase rents in 2016 and again in 2017.  The impacts that the inevitable huge rise in homelessness and child poverty will not just have on LA costs and capacity, but also what it will mean for poverty and the life chances of children being punished because their parent is unfortunate enough to be out of a job.

Throw in that as today also saw a projection that house prices will rise 25% in this parliament and so the now unaffordable housing ladder of home ownership has no rungs and that private rent levels will also rocket leaving social housing as the ONLY option for our children and grandchildren to live, yet that too will be unaffordable, assuming it actually survives.  Yes that reads as emotive but it is not it is the harsh reality of what the benefit cap policy does to the whole of society and not to the stereotypical perception of Joe Public that all social housing tenants are White Dee from Benefit Street.

It may also read as a form of ideological principle as to the social housing model which it is, yet it is the most cost effective way for the taxpayer, the Treasury and for the country at large to house its citizens.  However, when was the last time you heard social housing being sold or promoted on its huge economic benefits and financial savings it gives to the country?

Do nothing and continue with the negligent apathy and disdain that the social housing model receives and is seen in that light and boy are we all going to have to pay for the inevitable death of the social housing model.  How much more will its death cost the health service, the police, the education system, the individual taxpayer, the collective taxpayer, the country and just about every aspect of British society that it touches and interrelates to?

I have been way ahead of the curve on this and could easily gloat.  Yet I have lost count of how many times in my twenty odd years in housing I have heard the phrase – lets draw a line in the sand and adopt a lessons learned approach.  That phrase that conveniently comes out when the person saying it know that have been correctly challenged and they realise they have well and truly buggered up yet simply can’t or won’t say those words.  It’s a phrase very common in housing and so much so that it has lost its meaning!

Yet one of my first bosses in housing said something that has always stuck with me – Never bring me a problem unless you have a solution to it. There are viable and doable solutions to the benefit cap problems and that is one of the benefits of being so ahead of the curve in that I am well past the stage of merely moaning about the problem itself which is where social landlords find themselves today and solutions to the problems has been my principle focus ever since the reduction in the cap was mooted 9 months ago.

I have developed solutions. So do I take the Schadenfreude option and gloat or, do I look at what impact my perspicacity and being right all along and now proven to be right all along will have on the scale of the increase of my fee rates? Those that know me will know the answer to that and those that have thought about this issue will know it is not that simple at all.

Nobody can accurately say what the impacts will be (Not even me reader) and even if the government produces the most highly detailed revised impact assessment on the benefit cap reduction (Yes I know evidenced based policy from this lot!! Dream on!!) it will still be wildly inaccurate because it will deduce a national picture, an overall generic picture and nothing more.  Above I report that Inside Housing cites 3 all Northern social landlords who estimate the increased number of tenant households affected at between 367% and 2500% – a huge range.

Yet what that means is that the benefit cap reduction, the reduced overall HOUSING BENEFIT cap to be accurate, will produce radically different scales of impact in all 350 or so local authority areas and affect the 5119 social landlords that the regulator, the HCA correctly records in its Statistical Data Return as being just the 53% of social landlords we call housing associations, to which we have to add all the council landlords and ALMO and any other form of ‘social landlord’ construct we have.

The 5119 is because the HCA lists housing associations as they operate in different LA areas so while a larger HA may be 1 organisation it operates in very different housing markets in maybe 10, 20, 50 or 150 different LA areas and different housing market condition they are rightly seen in the OHBC context as being 10, 20, 50 or 150 different social landlords with different impacts in all these areas of the reduced OHBC.

It is time for the supposed sector not to think in such overtly simplistic terms as they all inhabit the same market or that its just as simple as London housing issues versus provincial housing issues and move on to extremely sophisticated yet correct analyses that there are intraregional dynamics and even very different housing conditions within the same LA such as one HA, typically a LSVT or former council housing department, having 60% of its housing stock as being 3 bed or larger and at risk as the council there only built family sized houses for decades as all councils did, and so they are massively more financially exposed than another HA who may only have 20% of its stock being the financially toxic 3 bed or larger sized properties.

In short we have thousands of different social housing markets in the UK and the welfare reform (sic) policies of bedroom tax, benefit cap, LHA and SAR caps and the banning of HB to under 21s and a range of other ‘austerity’ policies affect all social landlords and all private landlords and all local authorities very differently indeed.  Rented housing is not London versus the provinces it is a thousand times more complex than that and despite the acknowledged fact that the reduced benefit cap will impact more greatly in London than the provinces that level of analysis is way too simplistic and erroneous and frankly, dangerous.

That huge differentiation is why social housing is NOT a sector and cannot act as one lobby to challenge any government policy of today or (assuming it is still here) in 5 years time.  The supposed ‘sector’ regularly runs the most influential power players type of lists that sees Tony Stacey in Sheffield and Rotherham and Nick Atkin in Halton and others at the head of such lists alongside David Orr as head of the National Housing Federation.  Yet what are key ‘housing’ issue to Tony in Yorkshire may have less importance and priority to Nick in Halton and different again to Fred in Birmingham and Joan in Cornwall and different again to Matthew in Trafford or to Vicky in neighbouring Wigan – and different again to Rag as landlord A in Glasgow, to Tag as landlord B in Glasgow and to Bobtail in landlord C in Glasgow. (No I haven’t forgotten Wales or any other area!)

This huge differentiation of housing issues and their relative importance to 5119 housing associations prevents unity and a collective cohesive lobby for all housing association that enables all governments to play divide and conquer games extremely easily and sees no collective resistance from and no existence of a sector.  Yet all of the Freds and Joans and Tony’s and Nicks and the rest of the HA CEO’s and the council landlords and the ALMO landlords are underpinned by the social housing model which is the common theme of all of them.  Yet it has no voice, no representation, no cohesive lobby and so when we have a government which is hell bent on attacking the social housing model, as this government clearly is, that task is a simple one.

All of the welfare reform policies put the social into the term social housing as they assume changing behaviours or nudge theory of the social tenant – downsize, work a few extra hours, take in a lodger, etc – these are all personal (ie social) expectations and assumptions and bloody big expectations and assumptions too even if there was the ability to downsize which there is not.

The past thinking of the benefit cap doesn’t affect me as its a London issue and only then a private rent issue as my housing association is in a low rent social and private rented area oop North has been chronically negligent by the collective group of ‘housing people’ that falsely calls itself a sector.

The emergence of housing campaigns such as woefully ineffective Homes for Britain and even the most radical in SHOUT go nowhere near enough to see the social housing model survive and instead of genuinely harnessing any from of true sector to act as a lobby we see housing turn in on itself and either slavishly adhere to David Orr’s HfB and perceive SHOUT as just the mouthpiece of the warrior dinosaur Tom Murtha who is opening up old wounds in the traditionalist -v- modernist debates as to the role and ethos of what a housing association is or should be.  And I get labelled as a Maverick Radical for saying where the hell is this cohesive sector to boot!

All of these arguments and the over focus and myopia with RTB for housing associations or enhancements to the RTA for its tenants or whatever deflect from the two main problems social housing faces – that of not being a sector in the same way that any near £20 billion per year industry has a sector voice to lobby, and of being so enamoured with the we have always done it this way approach of not thinking, not challenging and not acting as any true sector should in fighting for the first principle of any business, ie survival.

I can hardly worry about my fee rates or Schadenfreude when it is stating the bloody obvious that the social housing model will very soon no longer exist if it carries on the way it has.

So instead I just simply call upon housing people to do two simple things – THINK and ACT,

Now surely that can’t be too much to ask….er…!!

 

UPDATE – and a really significant one! Thursday 19.40pm

For someone who prides himself on numbers and their priority I have just slapped myself on the wrist.  The 3 Northern landlords mentioned in the Inside Housing all SEEMED to have radically different estimates of 367% to 1000% to a 2500% increase – what the hell is all that about I asked myself!!

About 10 minutes ago I realised what it was.  Those figures as shown again below represent 4.1% of stock in New Charter, 3.5% of all CCHA stock and 3.1% of all SYHA stock – very similar figures that gives an average of 3.6% of social landlord stock affected by the reduction in the benefit cap.

IF that 3.6% impact was replicated nationally – and there is no reason why it should not and noting that over 4% of all HB claimants have 4 or more children – THEN the 4 million social housing properties would see 144,000 social tenant households affected

Let me say that again – ONE HUNDRED AND FORTY FOUR THOUSAND SOCIAL HOUSING TENANCIES AFFECTED

BENEFITCAP% NORTHERN SOCIAL LANDLORDS

 

The National Housing Federation whose figures were also quoted inInside Housing and the Guardian said it would be no more than 40,000 social households affected and here we have 3 Northern landlords – oop North where they keep whippets and wear flat caps and have ridiculously low rent levels compared to London – all saying it is as least 3% from their own independent and internal assessments.

The NHF figures of 40,000 equates to just 1% yet here we have oop North low rent social housing areas all saying it is over 3% and over 3 times the NHF early figures.  None of the 3 social landlords mentioned have any degree of AR model properties that would skew the figures and in fact all are well below the national average figures for AR units.  Tameside, Rotherham & Sheffield and Redcar are not high rent areas either, yet these 3 independently derived estimates all say over 3% of their stock is at risk.

Now what was I saying about the purported sector needing to think!!

Yes I have massively UNDERSOLD the scale of the problem and not over-egged the pudding at all!

 

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4 thoughts on “The benefit cap – I’ve only ever asked you think housing people!

  1. Tenants can simply pretend they’re working by claiming WTC, making them exempt. I suspect many formerly claiming JSA are doing this already, accepting a reduction in benefits in exchange for being able to stay in the properties they already inhabit. This means IDS can in turn pretend they’re working, which suits him politically of course, so I doubt he’ll be wanting to rock that particular boat for quite some time. It’s live from day to day now I’m afraid, but what else can you expect when you have a government creating its policies on that same basis?

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