When IDS was appointed the Work & Pensions Minister in 2010 the Housing Benefit budget was the largest area of welfare benefit spend the after state pension.
In June 2010 there was a budget and in that four new Housing Benefit policies were announced of (a) bedroom tax; (b) overall benefit cap; (c) the LHA cap; and (d) the SAR ‘cap – and collectively these are the HB reforms that the government said would save £2bn per year to the Housing Benefit bill by 2014/15.
Yet the Housing Benefit bill did not reduce by £2bn per year, it actually increased by over £1 billion per year in real terms according to the IFS. This means that the HB reforms failed and it also means that IDS’s 4 policies of bedroom tax, benefit cap, LHA and SAR cap cost £3bn per year more than he expected. In short they collectively failed abjectly.
These 4 HB ‘reform’ (sic) policies also directly led to a 55% increase in homelessness and rough sleeping and saw many families evicted and have to move and still sees many families have the choice of eat or heat and often much worse in order to keep a roof over their heads.
I have no need to overstate the misery the bedroom tax, benefit cap etc caused to so many hundreds of thousands of households, many of whom are disabled households; rather the point is all of this policy-induced poverty and misery actually cost £20 million per week more and there was no saving whatsoever to the Housing Benefit bill.
An outrageous experiment that has massively failed is a summary of the Housing Benefit reforms of IDS.
So what did IDS then do?
He made those policies even worse by extending their scope and this will see even greater added costs just in financial terms never mind the offensive consequences they have for many vulnerable families.
(a) Bedroom Tax – was largely not affected in increased scope but it will apply to pensioners in mixed-age couples when Universal Credit hits, and it is harder to appeal the distinctly unlawful bedroom tax decisions which under UC have to go through the additionally vetting stage of mandatory reconsideration.
(b) Benefit Cap – IDS reduced the cap level by 12% in London and by 23% in the rest of the UK from £500 per week to £384.62. This when it begins in the autumn, presumably meaning October, will cut the Housing Benefit of households with 2 children whereas now it only cuts the Housing Benefit for families with 5 children – in very brad terms.
The current £500 pw cap affects 23,000 households. The £384.62 pw cap will affect over 200,000 households – and that excludes those affected in London.
The reduction to £384.62 per week puts at least 664,000 children at severe and imminent risk of eviction and homelessness, from both private and social landlords, as the average amount of Housing Benefit cut will be £76 per week and evictions are inevitable.
In financial terms the benefit cap not cuts Housing Benefit by circa £67 million per year which compares to the current £354 million of HB cut in the bedroom tax. Yet while the bedroom tax HB cut remains fairly constant this year, the amount of Housing Benefit cut in the overall benefit cap will rocket to over £850 million per year – and that excludes London and is just for the regions.
This is a massive transfer of cost from central to local government who will be overwhelmed with massive rehousing and temporary homeless costs that all local councils cannot avoid as the benefit capped evicted households contain children and LA’s will have to shell out huge amounts for temporary homeless provision that could easily cost well over an additional £5 billion per year if not an extra £10 billion per year.
Temporary homeless already costs local councils around £1.5bn to £2bn per year (a very low estimate as the figures are difficult to pin down) and with homeless presentations about to increase by at least 6-fold with the reduced benefit cap do the maths!
I have done some detailed work on this huge transfer of cost to local councils and note it affects all councils and whichever political party is in control and then presented these figures to LAs and at public meetings. Here is the quite perverse rub …
When I explain these huge additional costs are ones that councils cannot escape and mean that bin collections may have to go from weekly to fortnightly and that libraries and leisure centres will have to close or even that those lovely floral displays councils put on roundabouts and verges will have to go, the reality of what the reducing benefit cap alone will do finally hits home with the audience. Whether that audience is the activist, the councillor, the campaigner or just your average Joe Public individual, it is ONLY when the inevitable consequences affect the general public ill they sit up and take note!
I could easily have a rant here at so many middle class Guardianista activists who have real concern over benefit cuts and other welfare state attacks, yet only actually GET IT when they realise the abject horror of the council only collecting the bins fortnightly and the pony trekking paths they use will no longer be maintained by their council!
I could also draft a strong argument that the severity of the reduced overall benefit cap is one reason why IDS has scarpered! In very short, the time lag between policy and consequence, the slow burner impact of the average £15 per week bedroom tax cut now becomes the fast burner of an average £76 per week cut and means all private landlords will evict post haste and only shortly followed by social landlords.
(c) LHA cap – This is not the LHA maxima cap it is the LHA cap which set an absolute maximum limit on LHA (private sector housing benefit) that can be paid out and introduced in January 2012. Largely this only affected London and other high rent areas such as Surrey and Hertfordshire yet it created the homeless diaspora. In short all 33 London Boroughs were faced with private tenants immediately evicted and had duties to house temporarily and then permanently and incur huge costs of this.
In February 2013 BBC London did a 2-minute long article on the direct consequences of the LHA cap and found that LB Westminster were paying £153,000 per year per family in temporary homeless costs. That video is here and has always been required viewing in order to understand the HB ‘reforms’ of IDS and why they cost so much more.
This same LHA cap and overall benefit cap was necessary said IDS to prevent the ‘hardworking taxpayer’ having to fork out £100k per year in housing benefit and subsequently, it was discovered at most that 5 households received £100k pa in housing benefit – 5 too many I agree – yet the LHA cap and overall benefit cap saw LB Westminster alone pay out more than £100k pa in over 30 cases as the BBC London programmes reveals by showing the invoices!! In short IDS’s policy massively increased the numbers of households receiving these obscene amounts of housing benefit and had the direct opposite effect of what the policy was supposed to achieve!
These impacts were all heavily foreseeable and predicted yet IDS believed his policy to be right and he failed in all of them to consider what the policy change would manifest even the bloody obvious that private landlords would evict en masse which they did.
For IDS, the spin and what could be sold to the public was enough and to hell with the inevitable reality!
(d) SAR cap
In 2012 IDS increased the upper age limit for the shared accommodation rate (SAR) from those under 25 to those under 35. This caused an increase in homeless and added cost that goes with it and many other impacts such as an increase in Houses in Multiple Occupation in the private rented sector which was only where the SAR applied.
The SAR did not apply in social housing and I was assured by the then Housing Minister Grant Shapps (and still have the letter) that the government had no intention whatsoever of extending the SAR to the social rented sector.
Yet that is now what has been done which (a) creates apoplexy in social landlords, and more practically (b) encourages those under 35 to have a baby to escape the SAR and then also be paid much more in child tax credits, child benefit and of course housing benefit!
Stating the bloody obvious or STBO is an alien concept and always was to the incompetent buffoon and zealot IDS!
Further – there are a range of new HB reforms such as the LHA maxima cap which limits the amount of housing benefit paid to supported and sheltered housing in the social rented sector to the maximum payable for general needs / unsupported housing in the private rented sector. That is a policy with the STBO and inevitable impact of closing every single homeless hostel and every domestic violence and abuse refuge in the UK – and they will never reopen as they cannot afford to operate due to this HB ‘reform!’
The same LHA maxima cap will also close all extra care or high support level sheltered housing and no new ones will ever be built. This means that when parents get a bit infirm and can’t live independently that this very empowering and cost-effective extra care sheltered provision is not there at around £180 per week and instead the only opinion is registered care at around £600 – £1500 per week for which mum or dad will have to sell the family home to pay for!
That last point is also what the general public and home owning general public who think that HB reforms do not affect them really do need to know. Yes, you will have to put Mum in a home and it will cost you your inheritance dear Middle Englander!! That is another IDS complete and utter f*ck up!
I could so go on with incompetence upon incompetence upon increased cost upon increased wider taxpayer cost upon wider home owner much reduced local council services and so many other direct consequences of the idiotic zealot IDS.
Instead here are the facts and sources for all of the above.
£2bn HB saving from HB reforms and actual £1bn+ increase?
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
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!!
664,000 children at imminent risk of homelessness here
All of the above sees IDS directly responsible for this catalogue of abusive practice and abuse and for the ‘hardworking taxpayer’ having to pay more for it!
As I have said for the past 5 years, IDS has got away with any scrutiny of his record and abject performance while being portrayed as a heartless bastard and pantomime villain and hopefully his record will now be seen for what it is.
How long before the new Secretary of State says the immortal line when challenged over any DWP policy of …….
I am dealing with the mess of the last CLOT!