This Government in its infinite lack of anything approaching wisdom has decided to evict thousands of pensioners in Liverpool who live in sheltered housing – and in almost every other area of the country too – apart from London.
The LHA maxima policy also means that the sheltered housing model is defunct – apart from London – and from its basic low level form right through to extra care or assisted living call it what you may.
Let’s begin with ‘bog standard’ sheltered housing in low rent Liverpool to begin with to explain why the sheltered housing model is dead and social landlords who operate it are at huge financial exposure and risk (and as usual the poor tenant is well and truly shafted which goes without saying obviously!)
Government Policy of the LHA maxima
The housing benefit paid to sheltered housing social tenants in Liverpool is around £50 per week higher at £140 than the housing benefit paid to a private tenant, called LHA, in a 1 bed property broadly equating to sheltered housing and which is set at a maximum of £90.90 per week.
The Government has decided to limit the maximum housing benefit paid to this LHA maxima of £90 per week from 2018 and this will affect all new sheltered tenants from April 2016 who will then have to find the £50 per week difference from their state pension, other income or savings else be evicted for arrears.
For a comparison the average bedroom tax in Liverpool is less than £15 per week.
How many sheltered housing tenants in Liverpool?
This is hard to be fully accurate about yet we can see (below) from the official 2011 census that Liverpool has 57,485 social tenants and we know from the latest official housing benefit figures that 41,051 social tenants receive housing benefit which is 71.41% of them to which I will return
We also know from the English Housing Survey which is the most comprehensive annual survey of housing that 26% of all social housing properties are headed up by a pensioner. This would suggest that we have 14,946 pensioner social households in Liverpool (26% of 57,485.)
However not all will be living in sheltered housing and I would cautiously estimate that there are around 7000 sheltered housing tenancies in Liverpool or less than half this 14,946 figure. That’s an educated guess only though will be pretty accurate nonetheless. If the same 71.14% of those receiving housing benefit – and it is likely to be higher in sheltered housing maybe 90%+ in parts – then this sees around 5,000 sheltered tenants in receipt of housing benefit in Liverpool.
The Government LHA maxima policy ONLY applies to new tenants from April 2016 and only applies from April 2018 and so will only affect new tenants from 2016/17 and from 2017/18 when it begins on Monday 4 April 2018.
So how many new sheltered tenants are there each year receiving housing benefit becomes the question as these will be the only ones affected.
A good rule of thumb is around 9% of churn – or new tenants per year in sheltered housing – which given we have 5,000 sheltered tenants on housing benefit in Liverpool means 450 new ones in 2016/17 and a further 450 in 2017/18; thus 900 sheltered housing tenants who will have their housing benefit reduced to the LHA maxima on day 1 which is 4 April 2018.
How much will it reduce?
By approximately £50 per week or £2600 per year is the answer as we know from the social housing lettings scheme operating in Merseyside called PropertyPool that advertises all current lettings. Looking here we see so many 1 bed sheltered housing properties averaging £140 or so per week and here are a few examples.
I could list many more and also note that Bootle is in another Merseyside council area called Sefton which also has the LHA maxima of £90.90 per week and that is all that sheltered housing tenants will receive as the maximum amount of housing benefit….yet as their rent is £140 per week and they will need to find £50 per week to make up the difference or be evicted for arrears.
So £50 per week is roughly £2,600 per year and on 4 April 2018 in Liverpool alone we will see 900 households affected which is a housing benefit cut of £2.34 million.
Additionally, we will see a further 450 new sheltered housing tenants on housing benefit during 2018/19 and this is an additional (up to) £1.17 million cut in housing benefit making a total housing benefit cut of £3.51 million.
The Government’s policy is that Liverpool City Council will award a Discretionary Housing Payment (DHP) to make up this shortfall. However, Liverpool City Council has a £1.7 million per year DHP budget so cannot cover this £3.51 million DHP demand just from sheltered housing alone.
Further that £1.71 million DHP budget currently attempts to mitigate a £6.8 million per year bedroom tax housing benefit cut, as well as further HB cuts to private tenants and from April 2016 also to use to pay for what could be a £12 million per year cut in housing benefit from the reducing overall benefit cap policy to both private and social tenants. Then add a further £3 – 4 million per year cut to homeless services housing benefit from this same LHA maxima policy as I explained and detailed here as well as yet to be defined added housing benefit cuts from DV refuges, supported housing for those with a mental health or disability issue and all other forms of supported housing.
The DHP as making up the shortfall created by the LHA maxima is hogwash.
Note well that the Government has also confirmed in parliamentary written answers that exemptions to this will mirror those currently in place for private tenants who receive LHA – and there are no LHA exemptions for pensioners so pensioners WILL be affected by the LHA maxima policy.
The DWP also confirmed this applies to the gross rent and the LHA maxima cap does include service charges (see below for Barnsley example.) For completeness because this is a housing benefit not a welfare policy or housing policy it also affects all tenants in Scotland and Wales over which the devolved authorities have no powers.
Wales is also likely to be highly affected given the 1 bed LHA rate is £65 per week or less in Blaenau Gwent (£65.00) and Brecon & Radnor (£64.62) and in North Powys (£64.62) and £65.00 per week in South Gwynedd. It is less than £70 per week in Merthyr and Neath Port Talbot too and it is only Cardiff that has a 1 bed LHA rate of over £100 per week in all of Wales.
While Wales still has Supporting People and generally lower rents than the rest of the UK I cannot see 1 bed sheltered housing properties having a rent and thus housing benefit entitlement of less than £70 per week and so Wales will probably be the worst hit area statistically in the UK.
A quick search reveals that Blaenau Gwent sees Tai Calon (I think) as the largest social landlord in the three valleys with 6000 or so properties and they are currently advertising 1 bed properties for over 55s at £85 per week yet the LHA maxima will kick in in 2018 at £65 per week leaving the tenant with a £20 per week housing benefit shortfall. Others are advertised at £64 per week with a £21 per week service charge which amounts to the same £85 per week in housing benefit.
The LHA maxima policy will affect all UK areas with a low-level of Local Housing Allowance rates as the 1 bed LHA maxima is lower than the social rent level for a 1 bed sheltered housing property.
In England the lowest 1 bed LHA maxima rate is in Barnsley at £72.72 per week and below is an example of an extra care sheltered service in Barnsley as advertised on the councils website (pdf) from just another quick search online:
Housing Benefit will currently pay the two figures highlighted of £87.38 plus the service charge of £41.46 per week (HB eligible charge) and this comes to £128.84 in housing benefit. YET that will reduce to just £72.72 for new tenants from April 2018 as the 1 bed LHA maxima kicks in and so we see this does mean even the sheltered tenant with assessed care needs (as that is what extra care means) will need to find £56.06 per week from their other income or savings to pay the rent.
That’s a £2,923 per year cut in housing benefit to a very vulnerable pensioner and yes this is the official policy of this Conservative Government as they themselves confirmed in parliamentary written answers on 15 December 2015.
All housing professionals still reading this will realise the above discussion and factual illustrations means that sheltered housing and especially its extra care variant are non-financially viable models of social housing due to the LHA maxima policy.
One point which flows from my post yesterday over all forms of supported housing is that we all need to find a new way to challenge policies such as this.
Are we going to see mainstream social landlords focus just on sheltered housing issues or just on extra care issues alone (as David Orr of NHF did in his blog not realising it affects ALL sheltered housing not just extra care ) when he said:
This seemingly minor, technical amendment could lead to virtually all supported housing for people under 35 to disappear. And how about extra care for older people? This table shows the impact for one housing association in three extra care schemes:
Local Housing Allowance per calendar month Rent and service charge (currently tenants can claim housing benefit to cover these costs) Shortfall per month £392.77 £498.84 £106.07 £392.77 £518.39 £125.62 £373.66 £461.56 £87.90
How on earth can these costs be met without the continuation of a benefits system that properly reflects the cost of providing them?
The £2,923 pa cut in Barnsley illustrated above is almost double the £125.62 pcm shortfall above at £243.58 pcm and Barnsley will not be the highest LHA maxima HB cut by a long way. You think it may be time for NHF to see – at least for once – what and how Government policy affects HA’s outside of the South East? Or will your organisation continue on its myopic London, London, bloody London focus as it always has done?
To return to the fragmented typical challenges will we see landlords with a supported housing but little sheltered housing focus on supported impacts of the LHA maxima and then see further fragmentation of challenge as Opposition MPs focus on point scoring using politically sensitive only persons such as the pensioner and women fleeing violence?
If we don’t change the way we challenge then that is precisely what we will see and why challenge will inevitably fail. It is this tired old fragmentation that is divisive and typically holds sway that allows this Government and indeed ANY Government to even think they can get away with policy by dictat and without any scrutiny such as the LHA maxima deserves.
It is the challenge or narrow self-interest that avoids the greater good and undermines that greater good by being so fragmented and that simply has to stop and especially given the far reaching impacts of this policy.
Dear Housing / Health / Social Care Professional – how many times have you heard or said or discussed holistic services / joined up thinking / combined health and social care and all other such pithy phrases in the last 20 years? Thousands of time yet here in the LHA maxima are consequences and impacts so devastating for all of you that command such commonality of purpose to fight and challenge and to work together. So will you? I won’t be holding my breath!
Very finally if I must go this deeply into what the LHA maxima policy means as to impact then look no further than the CIH submission to the pay MORE to stay consultation paper which said:
Yes that does mean that in some areas of the country your bread and butter general needs properties at a social rent level will see this LHA maxima housing benefit cut so its not just sheltered and supported housing properties that will be hit by the LHA maxima it is every form of social housing.
UPDATE – Some numbers for you
If we accept Placeshaper numbers that there are 440,000 sheltered housing residents and turnover is 9% per year then this is 39,600 new sheltered tenants per year of which 75% will be on housing benefit or circa 30,000 per year hit by this £2900 per year HB cut.
- In 2018/19 this is 90,000 (3ok from 16/17, 17/18 & 18/19) and a HB cut of £261 million taken off the pensioner
- In 2019/20 this is 120,000 and £348 million taken off the pensioner
- In 2020/21 this is 150,000 sheltered tenants hit and £435 million taken off the pensioner.
This parliament that means £261m + £348m + £435m = £1.044 billion taken off the pensioner in housing benefit.