664,000 MORE homeless CHILDREN – Does anyone give a sh*t?!

obc regions

Two plus two always equals four…unless you are a politician!

This is very true when it comes to welfare benefits and especially housing benefit and housing related ‘reforms.’

  1. Within a month of assuming office in May 2010 the Conservatives said they would cut nearly £2 billion from the Housing Benefit bill in real terms by 2014/ 2015.
  2. Their four Housing Benefit ‘reforms’ of bedroom tax, overall benefit cap, LHA cap and SAR cap – the policies to make this £2bn per annum cut – actually increased the Housing Benefit bill by over £1 billion in real terms according to the Institute of Fiscal Studies in March 2015.

Both of the above are facts, that most ethereal issue for politicians.  Both of the above contain numbers which are also facts as two plus two always equals four.

Here is the first bit of that- the Tory Promise

The extract below is from the July 2010 Housing Benefit Digest issued by the DWP in July 2010

The Chancellor announced a package of Housing Benefit (HB) reforms in his Budget statement on 22 June. It is the most significant and comprehensive reform programme for HB since the scheme was introduced in the 1980s. The background is the budget deficit and the reductions in public expenditure that the Government is making to tackle it. 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.There are also important policy considerations around fairness and work incentives that lie behind the reforms”

And here is the second bit of that from the IFS in March 2015: the Tory Reality

ifs hb real terms

So the HB reforms of bedroom tax, overall benefit cap, LHA cap and SAR cap (increasing the shared accommodation rate to under 35s from those under 25) instead of reducing the Housing Benefit bill by ‘nearly £2 billion per year’ actually increased the Housing Benefit Bill by over £1 billion per year IN REAL TERMS!!

The HB cuts cost £3 billion per year more than the Tories said they would!

The bedroom tax, benefit cap, LHA and SAR caps do not work!

Numbers for politicians mean deceit and particularly deceiving the public and when challenged the old expression of there are lies, damn lies and statistics comes to mind as well as tell a lie often enough and people believe it.

Numbers don’t lie, only politicians do.

The overall benefit cap (OBC) has somehow in all the multitude of policies and cuts and alleged reforms not received the scrutiny and attention it deserves.  The overall benefit cap reducing to £20k per year which begins in the autumn is THE most critical and THE most damaging policy of the lot yet NOBODY realises what it means and at the weekend I gave a talk in Leeds with some very specific local figures.  In Leeds:

  • It will put 12,000 children at imminent risk of eviction
  • It will affect 3623 families when now it affects 273
  • It will see a £14 million cut in housing benefit (HB & LHA) from families there
  • By contrast it now ‘only’ takes £0.8 million in housing benefit
  • By further contrast the bedroom tax is now a £4.8 million cut in housing benefit so is 6 times the cut of the existing overall benefit cap (OBC) yet from this October (?) the bedroom tax will become just one-third of the housing benefit cut from the OBC.

Nationally, the overall benefit cap at £26k sees a total housing benefit cut of £67 million per year with the bedroom tax cutting HB by £350 million or circa a £6 cut in bedroom tax for every £1 cut in the OBC.

Nationally it will make hundreds of thousands of families homeless in its first full year

The governments own (chronically understated) estimate for the OBC cut issued 2 weeks ago say it will cut between £358 million and £716 million per year in housing benefit – an increase of between 5.3 and 11 times what the OBC cuts now – and the consequences of even that woeful underestimate in terms of homelessness is there for all to see!

This woeful estimate from the DWP – where have we seen that before?! Ahem! – says it will affect between 129,000 and 164,000 families per year – which is still a huge increase on the 23,000 families it now affects at the £26k per year cap.

To stay with the numbers my very detailed research into how much housing benefit will be cut is £812 million per year which is 13% above the governments higher end estimate and that is a cautious estimate and a knowingly low one… and it excludes London!

London has almost 1 in 2 of all benefit capped households and that will move to just 1 in 5 when the OBC reduces meaning that almost 4 in 5 households affected in the UK will not be in the perversely high rent area that is the capital.

Everyone needs to change their mindset that the OBC is only a high rent area policy that only impacts in high rent areas such as London.  The OBC that now only affects social tenants with 4 or 5 + children will from the autumn affect social tenant households with 2 or 3 children and all larger families – and that is a huge increase

The Leeds example is more than a 13-fold increase in households affected by the reducing OBC and some areas will see an increase of more than double that and a few will have a 30-fold increase – or a 3000% increase.  In one respect Leeds is therefore lucky it will only have a 1300% or 13-fold increase in the number of households affected!

Liverpool has 111 households currently affected and the council has told central government this will rise to 1950 families – an 18-fold increase – yet Liverpool will have 1950 OBC affected families in the PRS alone with circa 1400 or so affected in social housing on top of that.

Those figures include an overly generous deduction for working age families who are exempt through being in receipt of Working Tax Credits, DLA, PIP and ESA (support group.)  These are very cautious figures.

BUT let’s stick with the woefully low government estimates to explain what the reducing OBC will mean in practice, and this is best explained if you firstly imagine you are the DHP budget holder in your local council.

In Liverpool the DHP budget of £1.6 million in 2015/16 sees a combined bedroom tax (£6.8m) and Overall Benefit Cap (£0.32m) demand of £7.12 million.  Ignoring all other DHP demands such as LHA and SAR cap and rent deposits and all the other DHP spend areas, you have £1.6 million in DHP to meet this £7.12 million DHP demand which is 22.47% of that demand.

Yet from October the DHP demand will be £6.75 million for bedroom tax and using government estimates £7.93 million of OBC demand for a total of £14.7 million…and have £1.9 million in your DHP budget which can cover just 13% of that demand.

In simple terms the DHP budget for Liverpool now can see 1 in 4 households get a DHP yet from October the DHP budget will only pay for 1 in 8 households because of the reducing overall benefit cap.

That means evictions and homelessness figures will skyrocket in every town and city across the UK not just Liverpool and Leeds.

Shelter have ran the same campaign each Christmas for a few years now which began with how outrageous it was to have 75,000 children homeless at Christmas which became 80,000 the following year and was 103,000 at Christmas 2015. Also I have just seen they have even have a 109,000 homeless children at Easter 2016 article out.

So imagine how nostalgic those figures will all look when it is 250,000 at Christmas 2016 and is 600,000 at Christmas 2017 – that is what the numbers say and while that reads as incredulous bear in mind that the governments risibly low figure of 164,000 OBC households affected will include 550,000 children at imminent and severe risk of eviction and homelessness.

But shhhhhh let’s not talk about the OBC is the norm and the OBC reductions are way underneath the radar! Why?!

Now imagine you are the Finance Director for Liverpool City Council and the homeless manager has just told you correctly, that because the overall benefit cap targets families with children, the council cannot escape its homelessness duties to families with children.

You have also been told that the bedroom tax households who are largely adults only have an average £15.29 per week cut in housing benefit yet the benefit cap average HB cut will be £76 per week and 5 times as high with 5 times the unaffordability and 5 times quicker to get to eviction and become a cost to the council in homelessness.

You then direct the DHP budget holder to move all DHPs away from the bedroom tax and into the benefit capped families to prevent much higher cost to the council’s budgets as the council will not recoup from central government the costs of putting the OBC families with children into temporary homeless accommodation and then have the ongoing much higher cost of this for far longer because it is impossible to find permanent accommodation for them due to the overall benefit cap!

To detail that a single parent with 3 children in Liverpool on ESA and in the WRAG will only get £63 per week in LHA to pay her private rent of say £123 per week.  So the council has the choice of (a) paying £60 per week in DHP and hope the private landlord will not evict and take the financial risk of a discretionary payment; or (b) have to pay £49 per night and £343 per week to put this family into 1 room at a Travelodge and only get back £63 per week of that £343 cost of the Travelodge temporary homeless cost.

Pay £60 per week to avoid an ongoing cost of £280 per week (£343 – £63)!

The same principle applies to the social tenant using the same figures as the single parent 3 child household will still get just £63 per week as the maximum HB yet will have a 3 bed social rent of £96 or so – a £33 per week shortfall; or be in a 3 bed at the affordable (sic) rent level with a rent of £110 per week and have a £47 per week HB cut.

That is why all DHP will shift from bedroom tax to benefit capped households which means all those bedroom tax hit families and their landlords who rely upon current and past DHPs to mitigate the bedroom tax are going to be in the brown smelly stuff!

Social landlords then have a double whammy of arrears risk.  The existing 9000 or so bedroom tax cases who will no longer get a DHP and in Liverpool at least a further 1400 cases of tenants who will have the much higher OBC cut of around £76 per week as arrears risks.

As well as 3 year old bedroom tax cases rapidly increasing their arrears and becoming immediately prone for eviction, the social landlords will suddenly have 1400+ cases of existing tenants who will very rapidly get to eviction stage due to the 5 times greater OBC HB cuts of £76 per week.

Currently we have social landlords in panic over the 1% imposed social rent cut and are seeing services and staffing being reduced by 15% down to this 1% overall rent cut.  Yet the OBC equates to a 2.3% overall rent cut for social landlords in the North West when we factor in the inevitable evictions they will have no choice but to do and the typical eviction costs all found of £3k plus the arrears level.

Summary

Why the hell are we not hearing and reading about the impacts on social housing from the reduced overall benefit cap?!!!!!

The figures and numbers above are very valid and the impacts are obvious in terms of evictions and increased landlord and local authority costs – even when using the government’s own woefully underestimated benefit cap affected household projections.

The silence from social landlords and local government is deafening on the overall benefit cap that will begin in the autumn presumably meaning October 2016.

The NHF and CIH and NHC and Placeshapers and LGA all other housing lobby groups as well as Shelter and Crisis and all other homeless lobbies and the usual national media suspects of the Guardian, Independent, Observer and all other paper media as well as all TV and radio media are all NOT discussing that the reduced OBC will see an absolute minimum increase of 500,000 homeless CHILDREN in its first full year across the UK and that could be as high as an added 800,000 CHILDREN being made homeless.

The Labour Party (who also had a reduced OBC in its 2015 General Election manifesto) and all other political parties are NOT discussing the OBC!  Yes that’s the same OBC that will make well over half a million more children homeless in its first full year and NO politician of any party is even discussing this issue!

Shhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh!!!!!!!

Have they ALL been taken in by the political hype of IDS and the scrounger narrative of ALL benefit households getting at least £500 per week as IDS very cleverly says to a largely supportive TV, radio and paper media?

What else describes why the country at large is so apathetic over at least half a million more children being made homeless directly due to the OBC?

 

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