The facts, realities and impacts of the heinous Overall Benefit Cap (OBC)
The extremely cautious Chartered Institute of Housing (CIH) has issued a report to say the reducing overall benefit cap will affect 116,000 families which is 32% more than the DWP or government estimate. That figure is bullshit.
Their report is on the front page of the Independent and is referred to in all the main national newspapers with many focusing on its claim that over 300,000 children will be affected by this.
What a pity that the analysis is wrong and still significantly understates the numbers affected and says absolutely bugger all about the impacts of the worst ‘welfare reform’ of the lot.
The CIH numbers only detail families with 1 – 4 children and DOES NOT INCLUDE single people, couples or families with 5 or more children. They are therefore a significant underestimate of the households that will be affected.
My cautiously low projection is the OBC will affect 157,973 families that will contain 527,630 children.
More important than the numbers is the fact that the average cut per family to their housing benefit will increase from the current average of £58 per week to £76 per week which gives an acute and immediate risk of eviction and homelessness to these families.
Why don’t these lazy so and so’s get off their backsides and get a job will probably characterise the public and right wing media response from those who do not realise that just 1 in 7 of households affected sign on the dole … and 6 in every 7 are not able to find work easily – and yes they are the official figures which reveal just 2,930 of the 20,124 currently capped households claim JSA or dole – a mere 14.5% and thus over 85% of capped households are not unemployed.
Worst of all is that children, over half a million of them will pay for the alleged sins of their parent(s) in the OBC and characterises the policy.
Could you find an extra £330 per month to pay for the roof over your head or lose it?
That is what the average £76 per week cut means and equates to. Remember too that this cut and £330 per month shortfall is being asked of families who are on subsistence level benefit income as well which means the answer is a definitive NO and also reveals just how much that children will pay for the sins of their parents!!
What none of the reports or articles state is that of the current 20,124 capped households is that just 1 in 7 of them are unemployed and claim Job Seekers Allowance. Put another way the official figures show that 6 in every 7 capped households are not on the dole as just 2,930 of the 20,124 claim and receive JSA.
Given that the only practical way to escape the OBC is to work then this is of huge significance.
The capped households need to work 16 hours per week for a lone parent family at £7.20 per hour the so-called National Living Wage which would then exempt the family from the OBC. The couple would need to work 30 hours per week.
Yet – as the official DWP figures reveal – the vast majority and more than 1 in 2 of capped households are those with pre-school age children (the not expected to work cohort) and then 1 in 6 families who receive what we used to call Incapacity Benefit now called ESA WRAG (the unable to work) and then there are the 8% who now receive Carers Allowance (the not allowed to work) as getting CA means you provide 35 hours per week of care and are excluded from working by the fact you receive it!
Q) Why don’t these lazy scroungers get a job you say?
A) Because they can’t at least not immediately, as the government knows full well
In short of the 20,124 currently capped 17,194 families or over 85% of them cannot readily find work (not expected to, unable to, not allowed to) and so cannot escape this heinous policy which gives the average £330 per month cut in housing benefit.
As an aside if all families could work the minimum hours to escape the policy they would receive around £5,260 per year more in benefit too and there would be zero tax take for the Treasury and the UK welfare bill would increase by £800 million per year!
So what the OBC incentivises and allows as the only escape from this heinous policy is a massive increase in the welfare bill!
CIH Analysis and why it understates
First, the CIH figures are only for those families with 1 – 4 children and exclude those with 5 or more children. While the 5+ child households will already be capped and indeed there are 6,725 such families they need to be added into the total figure.
This takes the 116,000 up to near 123,000
Secondly, it also excludes the single person household who make up 6% of the current total and so this would add a further 7,500 or so households to take the total over 130,000.
Single persons? A a fair number will be caught by the OBC reduced level of £296.35 per week in London in the private rented sector:
- Single person on JSA receives £73.10 thus the maximum housing benefit (LHA) will be £223.25 per week. The 1 bed LHA rate in London can be £260.64 per week and thus we see a £37.39 per week cut in housing benefit … that the tenant is expected to pay out of £73.10 per week income!
- Single person on ESA WRAG receives £102.15 per week which means a maximum amount of LHA will be £192.20 which is a cut of £66.44 per week and £288.70 per month
- Outside of London the single persons cap is £257.70. This means the maximum housing benefit for a tenant on JSA is £184.60 and £155.55 per week if they receive ESA WRAG. In Guildford for example the 1 bed LHA is £170 per week and gives a shortfall to the PRS tenant. Other high rent areas where single persons will be capped include much of Hertfordshire and Surrey e.g. Walton in Surrey has a 1 bed LHA rate of £173 per week. While this may be in comparative terms just (!) a £18 per week or £78 per month cut, what it will mean is that private landlords will both evict single tenants and not take on any new single benefit tenants.
While the numbers involved will not be huge they will run into four figures and of course the private landlord will evict post haste which is one of the principal impacts this policy has and which the CIH say little if anything at all about.
Thirdly, the CIH chooses to use two polarities to arrive at those households that will be affected and this is fundamentally flawed and misses many tens of thousands in the numbers affected.
In using council rent and gross market rent – the two polarities – the CIH analysis misses (a) that housing association rents are 13% more than council and they receive 13% more in housing benefit which perhaps explains why CIH chose not to use (?); and (b) that affordable (sic) rents are set at 80% of gross market rents and will see many more captured than the CIH analysis suggests.
- For example a 2 bed affordable (sic) rent in a high rent area such as Brighton, Guildford, St Albans and any other places in the South East outside of London will mean that the lone parent or couple with 1 child is hit by the cap and the CIH projections fail to include these numbers. There are even some places in the West Midlands where a 2 bed affordable (sic) rent property will see the 1 child household hit by this cap as well as some areas of the South West and again these do not appear in the CIH projections
The CIH figures only puts projected family numbers into boxes based on the very much lower council rent levels and this means their analysis fails to capture the true number of families who will be affected because their rents are higher in housing associations in both social rent and in affordable rent.
The numbers will me much higher than the CIH figure of 116k as the above briefly touches on some of the reasons why. My cautious figure of 157,973 households containing some 527,630 children are far from dystopia, hyperbole and scaremongering.
Jules Birch also comments on the CIH report and gives some other figures in an article here that includes detail on St Albans which says “The council says 211 families will be affected, double the DWP estimate.” My estimate for St Albans is 171 families and more than 20% below the councils own local estimate. My figures are thus not hyperbole or exaggeration, they are a cautiously low number and I expect the to be higher than my 157,973 affected households.
The DWP estimate given in their impact assessment in September of 88,000 families is so risible and false and also uses the same November 2015 HB data that saw DWP put out an estimate of up to 177,000 on that same data in February 2016!
DWP estimates are always way off. The original benefit cap would affect 56,000 households they claimed yet has only ever exceeded 28,000 or half of that estimate in one month since its full October 2013 implementation.
Same DWP said 670,000 would be hit by the bedroom tax and the first figure was for 524,000 and is now 430,000. Same DWP, and IDS and Lord Freud in person all said the pre 1996 bedroom tax loophole would only affect 4,000 households (3,000 – 5000) yet it affected more than the 40,000 I said it would affect and was called a scaremonger for saying.
The impacts are what matters!
Sod numbers. Sod DWP’s proven incompetence. Sod the woeful and incomplete CIH analysis as to numbers. The real issue is what impacts the heinous OBC policy will have.
The average amount of housing benefit cut – now £58 per week and I project to be £76 pw and £330 per month – in the context of 6 in 7 will not be able to work instantly yet still having the cut imposed will see a huge increase in evictions and homelessness.
The overwhelming majority of those capped will be evicted and hastily as 59% of them are now private tenants. The private landlord will, undoubtedly and inevitably, issue s21 possession notices like confetti.
The so-called social landlords who reacted to the average £15 per week cut in the bedroom tax with a red-inked bombardment of social tenants will do what reader given the average HB cut in the OBC of 5 ties that figure!!??
Frankly both council and housing association landlords have little choice but to evict the 2.01% of their housing benefit claiming tenants caught by the OBC (its 6.53% of PRS tenants who claim LHA) as the risk of arrears is so great and is almost £4000 per year.
The following explains
Death of Social Housing Model in the 1948 Welfare State?
As the amounts of base benefit (JSA, IS and ESA) as well as Child Benefit and Child Tax Credit are set national figures we know precisely how much each household type will receive as the maximum housing benefit.
The figures are exact and for a presentation I did at the weekend I produced a table of the average monthly shortfalls for a couple with 3 children living in a 3 bed property is below.
None of the capped households can afford the above monthly shortfalls which they need to do in order to keep the roof over their heads and their childrens heads.
The OBC reduction is £500 per month in the regions (£6000 per year) and £250 per month in London (£3000 per year) and so read the first column and where the figure is below £500 in the regions and £250 in London it means the couple with 3 children are not affected currently. This is all cases yet starting from next Monday the figures reveal the typical average monthly shortfall. It is a staggering and swingeing level of cut.
The second column shows the level of cut if the couple and 3 children live in a housing association affordable (sic) rent property and the final column is a 3 bed private rented property.
The real impact here is that the social housing 3 bed property becomes financially toxic. The benefit tenant cannot afford as the monthly HB shortfalls above reveal; AND the social landlord cannot afford the risk of accommodating the benefit tenant household in a 3 bed social housing property even on a social rent level!
In England, 36% of social housing properties are 3 bed or larger and thus the overall benefit cap makes them a no-go zone for the benefit tenant!
Where the f*ck will they live becomes the question with the only answer being in very costly an unsuitable temporary homeless accommodation and on a permanent basis to boot!
It also means that the social housing model one of the five pillars of the 1948 Welfare State that sought to slay the giant of squalor and to house those who could not afford to buy or live elsewhere becomes defunct as from Monday 7 November 2016.
RIP Welfare State!
In many areas many social landlords have way in excess of the 36% of their stock being 3 bed and larger. For example in Merseyside we find:
- Liverpool: – The three largest social landlords sees LMH have 56% of stock being 3 bed+, Riverside having 55% and Cobalt having 765 of all their stock being financially toxic to the benefit tenant household!
- Knowsley MBC sees Knowsley Housing Trust (KHT) have 59% of their stock being 3 bed or larger and financially toxic and KHT has 79% of all social housing in Knowsley
- Sefton sees One Vision Housing (OVH) have 52% of their stock being 3 bed + and they have 65% of all social housing in Sefton
- Wirral sees Magenta have 60% of total stock being 3 bed+ and financially toxic to the benefit tenant and Magenta has 70% of all social housing stock in Wirral
A further problem is that Merseyside has no council housing and in the North West region of 39 local authorities only 3 have council housing. In the North West 93% of councils have no council housing and social housing is owned and managed by PRIVATE Registered Providers, aka housing associations – who by virtue of NOT being public bodies cannot have any mandatory housing / rehousing legal duties … which remain with the councils … who have no housing stock!!
Housing Associations will evict and evict quickly and they have no financial choice but to do so, and hence they will in essence dump the evicted tenants on the local councils homeless department. When the council asks the HA’s to accommodate, those HA’s will say sorry we cannot afford to do, which renders any nomination agreements between HA’s and councils as less than useless even if they are 100% nomination agreements.
I could go on and on about the impacts on homelessness, child poverty, children’s life chances being irreparably damaged and say where the hell is the homeless outcry over this from Shelter and/or Crisis? Or ask why the hell the overtly London centric media decides just 7 days before this policy begins to show an interest and not 12 months ago. Or why the National Housing Federation has been oh so quiet on this issue too!!
In fact the NHF silence can only mean tenants can pay up or go an we have millions waiting to replace you from waiting lists and whom they can charge the affordable (sic) rent level to as well!!
Yet what you will clearly gather from the detail above – which is about 2% of the research I have put into this – is that many of the facts, such as individual social landlords stock profiles in each local authority, play a part in my detailed analysis as to why the minimum number of families this will affect (and put at acute imminent risk of eviction and homelessness) will be at least the 157,973 that will contain 527,630 children.
Oh what a huge opportunity missed by the CIH in their pitiful research in saying it will be 116,00 households and just over 300,000 children. The CIH also chose not to include any discussion at all as to the impact of this heinous policy, that is not surprising as it will see social (sic) landlords evicting the benefit tenant hand over fist and makes no mention of the 13% higher rents housing associations charge or the disgraceful misnamed affordable rent model that is also dead for the benefit tenant even if they have just 1 child in some parts of the country.
Its now 5pm on Monday 1 November and despite coverage of this issue in the Independent, Guardian and Daily Mail there is still no mention of this policy on the BBC website despite the fact the policy will quadruple if not quintuple the number of homeless children.
Half a million children to be made homeless by the heinous overall benefit cap policy and that is not newsworthy BBC?
Half a million children having their life chances irreparably damaged for the sins of their parents of which 6 in 7 cannot simply start work tomorrow as the policy insists they do to keep a roof over their heads.
Do I need to remind the reader that reducing the benefit cap level was (and still is?) Labour Party policy and contained at page 47 of their 2015 General Election manifesto? If anything describes the timidity and lack of opposition under Labour that plays a huge part in allowing this policy to sneak in under the radar and fuck over 500,000+ children …. Truly shameful!
This is not political it is so much more than that. It is rightful apolitical outrage that children are being directly targeted in this policy and the awareness level of what the policy means is abysmally low among the general public.
Are we going to wait until we see children being evicted by bailiffs in every city, town, village and hamlet until we wake the f*ck up and challenge this ideological bullshit policy?
I expect and project that my home city of Liverpool will see at least 1992 families affected and will see at least 1500 families with children evicted in the first year of this policy that begins in Liverpool on Monday 9 January 2017.
There are 52 weeks in a year. Each has 5 working days which makes 260 working days. Take away the 8 bank holidays and we see 252 working day per year. Those 252 working days will see 1500 minimum bailiff evictions or in simple terms 6 families with children every working day of the year.
Across what is called the Liverpool City Region (Merseyside and Halton) my cautious figures suggest 18,000 children will probably be evicted – which is 600 school classrooms full of children evicted. Yes this policy has huge adverse educational impacts too that have had no consideration whatsoever.
We like to form ‘rings of steel’ around evictions in my fair city and the eviction of children for the alleged sins of their parent(s) when their parent(s) have no sins for their children being evicted and made homeless, and losing their support and familial networks and having their life chances well and truly fucked over …. will definitely see this happening.
So 6 rings of steel per day and every working day to prevent children being evicted is what this policy means in Liverpool. Good luck to anyone in Birmingham as you will need 15 such rings of steel every working day next year to prevent children of the most marginalised families being evicted.
A ring of steel in the Bedroom Tax from Knowsley in Merseyside
I’ll stop there reader, if indeed you are still reading this far down. The above barely touches the full impacts and consequences of this heinous policy and I could easily draft a further 30,000 words to the 3,000 or so here I have spewed out in 63 minutes off the top of my head.
So apologies for the way the above rambles and how less than acceptable its structure may be … but I will never apologise for telling you that children are being abused by this policy, which is abuse and not just abusive, and yet the wonderful general public have a 70% approval rating for this policy according to pollsters and we see a general public who clearly believe the IDS and Poverty Porn TV narrative and don’t have a Scooby Doo what the facts and realities are.
With that provenance isn’t it time we Brexited the overall benefit cap?!