Around 625,000 children in 188,000 households will be at imminent risk of eviction and homelessness from 7 November 2016. That is the number of households and children who I maintain will be hit by an average weekly Housing Benefit cut of £76 per week.
The government estimates suggest between 88,000 (Aug. 2016) and up to 177,000 (Feb. 2016) – that bizarrely both used the same data – and we also saw a point-in-time scan figure of 120,000 in May 2016.
Two very different views.
Here I begin to explain my view of the numbers affected which also casts huge doubt on the DWP figures AND more importantly, what this policy means through discussing its impacts and consequences.
Let me be crystal clear that (a) the number of households affected will be a minimum of 188,000, and; (b) that is what the numbers say, and; (c) I further maintain that more than 188,000 households will be made homeless because of the inevitable impacts of the policy, and (d) I maintain strongly that my figure of 188,000 households is an under estimate.
I begin on the sole issue I agree with the DWP on and that is the £57.69 per week reduced cap level in London and the £115.38 per week reduced cap level in the other 87% of the UK will mean that the overall benefit cap policy is no longer a London / high rent area phenomenon.
The current position is 44% of all affected live in London and 56% in the regions. The DWP (Aug 2016) impact assessment says the position after the reductions take place will by 22% in London and 78% in the regions. My view is between 17% and 23% in London and between 77% and 83% in the regions and so is fairly similar.
That change is a seismic one with huge implications right across the UK as even the cheapest areas to live will see council and housing association landlords be unable to afford to accommodate households with 3 or more children if they are workless in the governments offensive terminology.
Workless? … means those who are unable to work and those not expected to work not just those who are unemployed. For example the households currently affected by the existing benefit cap include more families receiving ESA – the replacement for Incapacity Benefit – than existing families receiving JSA, (dole.)
More capped households on ESA than on JSA!
Let that sink in as that statement of fact which comes from the existing official DWP data with 15.5% of capped households on ESA and 14.5% on JSA (see Table 6 on the DWP May 2016 data.) This not only shows that disabled / sick households are affected but will make every landlord sit up and take notice as these 15.5% of households currently affected get £29.05 per week more in benefit and therefore get £29.05 per week LESS in Housing Benefit due to the zero sum way the policy works.
To highlight what this means from November the 1 parent 3 child household in the regions will only receive £92 per week as the maximum amount of HB in the regions and £149 per week in London if on JSA and both figures are broadly in line with the rent levels of a 3 bed property in social housing and/or would have a cut of a few pounds per week.
However, because more capped social households now receive ESA than JSA and there is no reason for that to change we find the maximum amount of HB from November becomes £63 per week in the regions and £120 per week in London. That means a sharp increase in the number of lone parent three child households hit by unaffordable £30 per week HB cuts than landlords have anticipated and planned for.
The same issue means the 2 parent 2 child household on JSA will get a maximum £117 in HB (regions) and £175 per week (London) yet will only get a maximum of £88 and £146 per week on ESA and a number of that cohort will be affected in social housing at a social rent level.
A couple with 2 children become unaffordable for a social landlord even oop North due to the reducing overall benefit cap and in just 10 weeks time!
Another point on the offensive workless label concerns those not expected to work and a good example is the lone parent with children under three years of age and again using official DWP data on the current households affected we find that 55% of all capped households of lone parents have children aged 3 or under and 39% of two parent households have children aged 3 and under.
Taking the point to an extreme the childless lone parent who gives birth to triplets will be hit by the benefit cap reduction and becomes expected to work from the second they are born as this is the only way to escape the reduced benefit cap. It also means any parent with the youngest only child under school age HAS to work else they are hit by the benefit cap reduction from 7 November 2016 just ten weeks away.
While the additional £29.05 paid for those on ESA and in the work-related activity group (wrag) ceases from Monday 3 April 2017, that is still 21 weeks after the reduced benefit cap levels begin and so during this time the ESA capped households will all receive £610.05 less in housing benefit and are at a £610.05 additional financial risk of rent arrears and eviction and homelessness which flow from that.
Keeping with social housing tenants, albeit loosely termed as social, tenants who are living in the misnamed ‘affordable rent’ properties of housing associations are also at a high financial risk of arrears eviction and homelessness due to the reduced cap.
At the end of March 2015 there were 102,000 affordable rent properties of housing associations in England and by now there will be many more (the figure for 2015/16 due in September 2016) and while there are no figures I can see of how many of this cohort are on benefit and could be affected the number will be significant and I strongly imagine has not figured into any DWP estimates of those to be affected.
Even the single person on ESA who has a maximum housing benefit of £156 in the regions can be affected in many places in the South East such as Broxbourne, Elmbridge, Guildford, Harrow, Hertsmere, St Albans, Vale of White Horse, Watford and Windsor from a cursory glance at affordable (sic) 1 bed rent levels; as will all in London where 1 bed affordable (sic) rent levels exceed not just the £194 pw maximum HB when on ESA, but in some London councils where the maximum HB is £223 per week for tenants on JSA and Income Support.
In almost all of the UK the affordable (sic) rent level will mean that social (sic) landlords cannot afford to accommodate those tenants who fully occupy a 2 bed AR property and so the affordable rent property cannot afford the benefit tenant at all from November 2016 and that’s new AND existing tenants.
For all the above reasons and the table below is why the numbers affected will be far higher than the DWP maintain. I have devised another table at Figure 1 below to show how much the maximum level of housing benefit (HB or LHA) will be by household type and to show which household types will be affected by landlord type.
Figure 1 – Max Housing Benefit by household type and landlord
Private Landlords as the table reveals will see tenants hit in all household types and in many cases right across the UK even for the 1 parent 2 child and all larger households. This has for me a very disturbing consequence as I believe that private landlords will hastily begin to evict all benefit tenants even those who are not hit by the reduced cap from November!
The benefit tenant becomes too great a financial risk for the private landlord.
The lone parent with two children who can receive £159 pw or circa £690 pcm in LHA will not be affected in many low rent areas for a 2 or 3 bed property come 7 November 2016. Yet get pregnant and the maximum LHA reduces to £92 per week or get a new partner and reduces to £117 per week and hence private landlord will take flight now.
Many times before it has been said that private landlords will flee the benefit tenant market and this has been correct in piecemeal and small numbers. Yet the overall benefit cap policy is radically different and will be THE catalyst for private landlord flight out of the benefit tenant market en masse.
Private landlords will stop taking new benefit tenants AND will evict many existing benefit tenant households … including those who are NOT affected by the reduced benefit cap. I do not think that point is even contentious as it comes down to financial risk to the private landlord and especially as greater than 90% of the private rented sector is landlords who have less than 5 properties.
Do affected household numbers correlate with evictions?
NO! I maintain there will be MORE evictions than the number of households affected. That may seem a ridiculous assertion but it is not for many reasons.
Firstly, as the scan figure for Leeds reveals the average weekly cut for a council tenant and the housing association tenant is over £70 per week and for the private landlord is over £100 per week. Note well these are average figures based on the risibly low DWP figure for Leeds and not even a council landlord can not evict given that level of rent shortfalls per week.
Note too that the council tenant average household according to DWP scan figures has an average of over 4 children which also means that such households can easily be hit by the reducing benefit cap AND be hit by the bedroom tax as well which reduces the maximum HB payable even more – and just another factor the risible DWP analyses and estimates fail to factor in in addition to the ESA factor I have concentrated on above.
All housing associations who have nomination agreements with councils even those with 100% nomination agreements can, and will refuse to accommodate new tenants when their maximum HB will not cover the rent. This is a huge issue in the North West of England region which has 39 local authorities yet only 3 council landlords. It will also be in play in every local authority area where the former council housing stock has seen a Large Scale Voluntary Transfer (LSVT) to newly formed housing associations since 1988 and that is over 1.4 million tenants.
When councils are approached for housing by families and find that private landlords and LSVT and other housing associations will not accommodate then councils will have to find very costly and temporary housing for them and logically in B&Bs and hotels … where such families will stay on a permanent basis until they escape the reducing benefit cap.
IF housing association and private landlords realise what the reducing benefit cap means now, in terms of maximum HB payments, then the refusal to accommodate such families will begin now (if not already!) and will happen ahead of the reduced cut in November.
Homelessness figures will rocket ahead of the reduced cap yet still be directly related to it!
In terms of existing housing association tenants – which is 2 in every 3 social tenant households – HA’s given the over £3,500 per year benefit cap cut on average will start using Ground 8 arrears evictions as the norm in order to reduce losses and they have little alternative but to use Ground 8 for evictions.
Ground 8 is a mandatory eviction process that gives the judge no discretion but to evict if the arrears are more than 8 weeks rent (around £800) and HA’s will be forced to use it rather than all other discretionary arrears grounds which take much longer and with arrears costs typically 4 to 5 times this amount. That is an inevitable consequence of the reducing overall benefit cap and regardless of how much Ground 8 is despised and frowned upon.
As Ground 8 will quickly become the norm its use fro non benefit capped households will also increase in usage too leading to even greater numbers of arrears evictions. An indirect but probable consequence of the reducing benefit cap.
Local councils are going to be bombarded with evictions and homeless presentations from families with children, and because these homeless cases have children then councils cannot escape rehousing the in expensive temporary accommodation. That is why I titled my analysis of the DWP scan figures for Leeds as “….A £93k added cost PER DAY to the council!”
Is that bin collections once a month rather than once a week and/or a dozen library closures reader? Yes that does mean the overall benefit cap reductions of 23% in the regions affect home owners and non benefit recipients and every local tax payer not just the Benefit Street poverty porn scrounger the media feeds us with!
245,000 adults and 625,000 children evicted and made homeless is a regrettably low figure and equates to more than all the children in Liverpool and Manchester having their life chances well and truly f*cked over for this ideological policy that was also part of the 2015 Labour Party manifesto (page 47 if you want to check!) which only goes to prove that all politicians do not have a clue what this policy will mean.
I am 90% plus confident it will affect 625,000 children and I am 100% confident that my many recent posts (here, here and here) that say the policy will quintuple the current scandal of 100,000 children living in temporary homeless accommodation is a deliberate underestimate.
The overall benefit cap is THE culmination of the Tory narrative that any one who receives ‘welfare’ or ‘benefit’ is a bone idle scrounger who should get off their lazy arse and get a job.
It is by far the worst of the Housing Benefit reforms that are lazily and wrongly labelled as welfare reform.
It is the epitome of the austerity programme as it will see homeless children quintuple as a minimum and by Easter 2017 if it has a full roll out on 7 November 2016 (which the DWP and government generally are extremely coy about informing us on) – and it is violence and it is abuse.
It has to be stopped.