Housing Benefit has increased IN REAL TERMS since May 2010 yet the Tories and the BBC are determined to deliberately mislead over the reasons for this in a Radio 4 Analysis broadcast this evening.
It’s time to put on make-up, it’s time to light the lights…
The BBC website trails this total U-Turn and heap of pigshit from the Institute of Fiscal Studies (IFS) here and very specifically it gives the following reasons for the increasing Housing Benefit bill:
The cuts mean that spending is more than £2 billion less than it would otherwise have been but total spending actually rose over the period after 2010 when the cuts were introduced. That’s because rents rose, the number of renters rose, and earnings fell.
The ‘cuts’ refer to bedroom tax, benefit cap, LHA cap and SAR changes and collectively called HB reforms. In June 2010 the government boasted these changes would SAVE “…nearly £2 billion by 2014/15” in the HB digest magazine the DWP released shortly after Osborne’s first budget in June 2010.
The Chancellor announced a package of Housing Benefit (HB) reforms in his Budget statement on 22 June. Ministers are clear that the overall cost of HB, forecast to be around £20 billion this financial year, must be controlled and reduced. The package of reforms will save nearly £2 billion by 2014/2015
The HB reforms all aimed at reducing the overall Housing Benefit bill by nearly £2 billion by 2014/15 to be an actual after adjustments for inflation figure of £21.91 billion for 2014/15 and an actual and ‘real terms’ figure of £22.43 billion for 2015/16
This is shown in the House of Commons Library in SN/SG/5699 published in November 2010 gave nominal figures for this estimate of the coalition and beyond as you can see in the table below.
The latest official figure as released in August 2015 and had the overall HB bill at £24.024 billion as shown below.
The actual HB bill is £1.594 billion more than the Tories said it would be and in real terms!
This is despite the HB reforms of bedroom tax, benefit cap etc seeing HB deducted at source.
This means the bedroom tax and benefit cap et al actually COST MORE and have definitively failed as policies. All the bull, bluster and political spin and lie coming from IDS and the Tories over ‘savings’ are totally refuted by the facts, and the only facts that count – the actual cost figures!
The woeful article on the BBC website also says this:
Paul Johnson, director of the Institute for Fiscal Studies, explains the history of the payments and how government funding for house-building has gradually moved into subsidies for rents, especially to private landlords.
This is factual nonsense as the official figures prove as well as an analysis that would get a D minus for a first year GCSE student. The HoC table above was a government estimate up to today and let’s zero in on that:
Note it projected that LA tenants would receive £5.482 bn; HA tenants £8.290 billion and PRS tenants £8.660 billion. The actual figures that we can take from the official HB data released by DWP in August 2015 reveal:
- Expected LA HB £5.482 bn – Actual: £5.842 – UP £400 Million
- Expected HA HB £8.290 bn – Actual: £9.304 bn – UP £1.14 Billion
- Expected PRS HB £8.660 bn – Actual: £8.860 bn – UP £200 million
The IFS analysis which the BBC as is their want swallow hook line and sinker is that the HB bill has increased due to private rent levels. The DWP projected that social (ie LA and HA landlords) would receive a total of £13.772 billion (1 & 2) above yet they actually receive £15.146 billion and £1.374 billion more than expected. By contrast the PRS landlords receive just £200m more than expected.
The reality is NOT that the overall HB bill has increased as “…building has gradually moved into subsidies for rents, especially to private landlords.” The reality is that the HB bill has increased to SOCIAL not private landlords.
When we drill that down we see the real reason for this and that is low paid work not profligacy by social landlords such as the Affordable (sic) Rent model or by social rents increasing by 24% as Osborne claimed the other week – social rents are set by central government formula not by social landlords and they still average about 50% of the extortionate private rent levels.
The REAL reason that the overall HB bill has increased is due to low paid workers realising that they earn so little they qualify for Housing Benefit …as the DWP’s own data reveals if you know where to look.
The above shows how much HB was paid to working claimants at May 10 and at May 2015 and you can see this has increased by £2.61 billion in nominal terms and almost doubled since the Tories took office.
We pay £5.511 billion per year in HB to those in work and for comparison the total JSA bill stands at £4 billion per year. That is the real reason for the increase in housing benefit and when we look further still it is social tenants who have gained this additional HB as the breakdown of who gets HB clearly shows.
It appears social landlords have been advising their tenants to claim what they are entitled to when it comes to HB (though not for other welfare unclaimed that does not directly benefit social landlords!!!) and as I stated here the DWP still admits that up to £4.27 billion due in Housing Benefit goes unclaimed each year!
Finally, the IFS analysis in this article for the Radio 4 Analysis programme (yes I note the irony in that too!) sees the IFS not only wrongly say the increase is the result of greater PRS receipt of HB, they also say the total bill is over £25 billion when it is just gone back over £24 billion and, more importantly, they disgracefully say that over £2 billion savings have been made.
Let me remind you what the very same IFS said back in March ahead of the General Election:-
Yes the HB bill is £1 billion higher in REAL TERMS. Wow the DWP must be giving them oodles of public money to sell their integrity and soul for this woeful analysis which is replete with schoolboy error and a piece of paid political bullshit.