This is a very well informed rant in which I explain why the media and the Labour Party are ignorant of, and housing associations are apathetic to, the inevitable closure of all DV refuge, hostel and supported housing that will never reopen.
The Daily Mirror has a story today that is also picked up by BBC and is based on the little knowledge is a dangerous thing principle. It is titled Rent costs to soar for half a million disabled and elderly as Tories wield axe on housing benefit.
The story chronically underestimates the issue, it’s cost and is full of half-truths, errors of omission and error of commission and it is clear the writer does not have a clue what he is talking about, that Labour still don’t get it, and that housing associations, stupidly, don’t really care too much about it for many reasons.
The huge problem with this is that the agenda is now set at:
- a £400 million HB cut when it is a £5 billion HB cut, and
- it doesn’t mention the really big political stories that this will close all domestic violence refuges and cut th benefit and even evict pensioners from sheltered housing
These are huge political issues that the supposedly Labour-leaning Daily Mirror fails to mention and now the BBC has picked up this story then the agenda is set and can’t be changed. The fact that the Labour Party and Housing Associations go along with this charade only reveals how stupid and ignorant they are of the real costs and real issues with this outrageous policy of the LHA maxima.
Once refuges and hostels and sheltered housing closes it will NOT be replaced as there is no capital or revenue funding on a sustainable basis for it and housing associations are fully in bed with Government on only building quantity of new housing AND critically new housing developments on the most profitable basis for HA’s which by definition excludes supported and sheltered housing!
God help anyone who ever has a vulnerability and a vulnerable housing need as you are well and truly fucked by the LHA maxima policy and especially by this pitiful ignorant crock of shit article of response to the LHA maxima which sets the agenda!
The Mirror spiel
Nearly half a million disabled and elderly people face a huge rent rise following the Tories’ cuts to housing benefit. They will have to pay £3,000 a year more on average to stay in their specially-adapted homes, or face eviction. All council and housing association tenants are to have their housing benefit capped at the market rate, saving the Treasury £400 million. Most will not be affected as their rents are usually lower than private ones. But analysis for Labour says there are 440,000 elderly and disabled people whose rents are higher because they live in adapted properties or need care and support.
Assuming we accept both figures, since when has a £3000 per year cut for 440,000 equalled £400 million? 440,000 lots of £3000 per year is £1.32 billion per year.
We have 5 full financial years in this Parliament (2016/17, 2017/18, 2018/19, 2019/20 and 2020/21 which begins a month BEFORE the next general election so benefit rates are set until end of March 2021) and 5 years @ £1.32 billion per year is £6.6 billion. Yet it only applies to new tenants from 2016 and so will be a percentage of that figure, however £400m of £6.6 billion is just 6% and average new tenants in sheltered housing runs at around 8% per year meaning 40% in 5 years and £2.64 billion alone this Parliament and supported housing has a higher still turnover than 8% meaning the cut will be far higher than this £2.64 billion.
The Mirror’s talk of disability is limited to adapted properties – £3,000 a year more on average to stay in their specially-adapted homes – which is total hogwash as most physically adapted properties will not face a cut in housing benefit and they are not in supported housing. The cuts to disability this policy – the LHA maxima – affects refers to a tiny part of physically adapted properties and mainly relates to learning disability and mental health services and some sensory disability services for those who are D/deaf.
Around 2% of all supported housing is physically adapted and 40% of it or 20 times as much is for learning disability and mental health services. This policy will also affect homeless services and refuges which are not mentioned in this woeful article and they account for about 24% or 12 times as much as ‘adapted properties’ and the 36,000 or so homeless properties will alone face an average £5,892 per year cut which alone is around £200 million and part of a £4.944 billion cut over this Parliament as I explained here.
In short the Mirror conflates, plucks figures out of the ether, and frankly does not have a bloody clue what it is on about. Now let’s look at the political comment.
The Political view
Shadow Housing Minister John Healey said: “(George) Osborne’s cuts to housing benefit support for thousands of elderly, disabled and homeless people will be a catastrophe for those who can least afford it. “There is no way these people or the organisations who support them can make up the yawning shortfall these cuts will open up. “If nothing is done, vital supported housing across the country will close, and the people who rely on them will be forced out. “George Osborne must put a stop to these plans, publish a full impact assessment and consult fully with supported accommodation providers to safeguard this essential housing.”
These changes will NOT just affect supported housing but also sheltered housing as well as a small proportion of general needs housing and of course the so-called ‘affordable housing model’ housing, though at least John Healey includes ‘homeless’ though no mention of the far more political sensitive ‘domestic violence and abuse’ – and this policy will close all DV refuges.
The call for a full impact assessment is welcome though ‘consult fully’ is a joke as The Conservatives have been doing that since the Autumn of 2011 when this ridiculous policy was first mooted in a consultation paper and quickly put to bed without even a consultation response being published! So 4 years of existing consultation has still produced this crock of shit policy and much of that when John Healey was the Shadow Housing Minister and probably the most knowledgeable one too and yet he has allowed this whitewash of an article that is hugely factually and politically deficient to be put out in his name!
The Housing Response?
Charlotte Norman, PlaceShapers Board Member and Chief Executive of St Vincent’s Housing Association in Manchester, added: “These changes in housing benefit entitlement look like having a more detrimental impact than any other recent housing and welfare announcement. “Supported housing provision fits clearly with our vision and purpose and makes a huge difference in communities up and down the country. “Over 440,000 vulnerable people live in schemes provided by housing associations and their homes are now at risk.
Let me correct that – the housing association response and HAs have 63% of social housing- which says 440,000 yet of course that excludes the supported housing and sheltered housing in council housing and so the 440,000 figure is just for one part of social housing so the figure is a clear underestimate.
The language of “These changes …look like having a more detrimental impact…” hardly inspires confidence in a housing association response and HA’s can simply reprovision these properties for other uses and indeed will have to if the LHA maxima policy goes ahead. In short, the vulnerable tenants who need these sheltered and supported housing services will suffer permanently while landlords will have a temporary short term loss while they re-provision.
Far more importantly, no social landlord under any of the current funding regimes will ever develop supported housing ever again as it is just not financially viable and so all supported housing for all vulnerable client groups will be lost for good.
The final piece of the housing (association) response is fine as there is no way on Earth the multi BILLION housing benefit cut over this Parliament can be mitigated or ameliorated by DHP
“The current response that Discretionary Housing Payments will cover the gaps is clearly nonsense and unworkable. “We cannot believe that Government understands the consequences of these changes and the vast extra costs that would fall to the public purse as a result of scheme closures.”Nothing short of exemption for all such housing will be adequate and we very much hope that common sense will prevail.”
Yet note what I said above – Government, and its the same people from the Conservative coalition, have been talking with supported housing providers since the autumn of 2011 when this policy was first proposed in a consultation paper of July 2011 that included limiting housing benefit in supported housing to the LHA maxima rate
This was just for supported housing and not sheltered housing and it sought views on limiting housing benefit in supported housing to the LHA maxima or the LHA maxima plus a given sum and the Government (same people as now) accepted that there were higher necessary costs in supported housing that HB funded, and the Government further presumed that other funding (Supporting People) was also available for such services yet Supporting People funded has reduced by about 50%!
How could the same DWP of this Government today be convinced that supported housing necessarily costs more and requires much more than the LHA maxima in 2011 yet today says that is all it will get?
The same consultation paper also said this was NOT a cost cutting exercise and they simply wanted to redistribute existing funding for supported housing better yet now the same Government are saying we are making a cut which they know full well will see vital supported housing inevitably close?
The argument that THIS Government does not realise what it is doing is a ttal crock of shit.
Note well a key purpose of this was to see how housing benefit costs for the very same supported housing fit into Universal Credit. Four years of talks later and the Government still don’t have a clue, and in fact supported housing costs are still excluded from and outside the scope of the Universal credit programme! Just how anyone can call for more consultation and believe it could possibly work beggars belief … and this ALL stems from the fact the Government totally forgot about supported housing when designing Universal Credit!
Finally I shall end with some numbers of those affected. The consultation paper above admitted that the HB recording system does not lag up whether a rent is a supported or sheltered one, the system didn’t do that then or now, so the numbers are plucked out of the air.
There appears some consensus that between 110 – 130,000 live in supported housing in the UK and a further 400,000 need support and live in sheltered housing (not all sheltered tenants need support) and so that is at least 530,000 affected. Then there is an unknown number, perhaps a further 200,000 or more, of those without a necessary support need who live in sheltered housing and as I stated here with detailed and accurate figures the sheltered tenant in Liverpool typically has a rent of £140 pw yet will only receive the LHA maxima of £90 per week and have to make up the £2,600 per year rent shortfall from their pension or savings.
While the LHA maxima only affects new tenants from April 2016 and only then applied from April 2018 this is still a huge number as sheltered housing has an 8% per year turnover typically and as it has a minimum of 600,000 properties this suggests 48,000 per year will be affected.
In 2018 it will affect 48,000 from 2016, 2017 and 2018, a total of 144,000 who if they each have a £3000 shortfall is a HB cut of £432 million just for sheltered housing in 2018. In 2019/20 we can add a further £144 million to this making £576 million and in 2020/21 another £144 million making £720 million that year – and just for sheltered housing this Parliament that is £1.728 billion.
To challenge this LHA maxima policy is everyone’s job as its impacts are huge and irreparable. Refuges for domestic violence and abuse will close and not re-open as there is no funding for them on a capital or revenue basis in the future. The same will happen for homeless hostels and for supported housing for those with mental health, learning and sensory disabilities and all other support needs.
The housing associations, who unlike council landlords have no mandatory housing duties to vulnerable people at all, will simply reprovision the refuge and hostel and group homes for those support needs into flats and so HA’s are only temporarily inconvenienced while the poor vulnerable tenant once again gets well and truly shafted.
Note well the housing associations may well provide the majority of supported housing’s bricks and mortar, yet they do not provide the support services in the main and these are provided by small independent charities (eg every Womens Aid) who deliver the support and will go out of business. The buildings themselves given they have far higher wear and tear and maintenance costs are lucky if they break even for housing association owners and can often be an actual cost to them so reprovisioning is not going to hit HA’s bottom lines at all except improve them in the long run.
Some housing associations have large supported housing departments and do deliver support themselves rather than use the small charities to run, known as managing agents, and so will be massively affected. The financial risk of the LHA maxima policy to Home Group and Riverside as the two largest providers of supported housing will be monstrous.
[Update inserted 11am – I note the Labour Party has issued a news release on this issue saying it got the information for this from Placeshapers, an umbrella body for housing associations that does NOT include Home Group which incorporates Stonham the largest supported housing HA provider and does not include Riverside who incorporate ECHG which was the 2nd largest supported housing provider in HAs both of whom I mention above]
Yet they are exceptions to the rule of the 1700 or so principal housing associations and the typical housing association has very few supported housing units and the average is just 76 units (130,000 supported housing units between 1700 principal housing associations) and 130,000 out of 2.73 million total stockholding is less than 5% of all their housing stock.
Those figures confirm why this LHA maxima for supported housing (which the Mirror errantly reduces to disability adapted that only accounts for less than 2% of supported housing in this woeful article) is being taken so apathetically by housing associations. Sheltered housing cuts are another thing altogether and will see a huge cut to housing association bottom lines, though they will also be reprovisioned just as they were when Supporting People funding shrank and was stopped and then decimated when the last Labour Government took away the ringfence from it in 2009!
So in summary, the media don’t understand this issue; the Labour Party don’t and have huge adverse form in supported and sheltered housing;and the housing associations will belch at this hiccup and reprovision supported and sheltered housing.
Surprise, surprise the vulnerable tenant will once again get well and truly fucked over!!