Benefit Cap – 50% of social housing NO GO ZONES for the benefit tenant!

The majority of social housing in Merseyside is a BENEFIT TENANT NO GO ZONE due directly to the swingeing £500 pcm cut to the overall benefit cap!

To explain the (OBC) means that the 3 bed and larger social housing property is financially toxic as:

  • The benefit tenant fully occupying the 3 bed cannot afford it, and
  • The landlord cannot afford the benefit tenant due to the risk of arrears that leaves the fully occupying tenant with just £0.50 per week in Housing Benefit

Across Merseyside over 50% of all housing associations properties are 3 bed or larger properties. Note well that Merseyside has no council housing whatsoever (nor has 36 of 39 North West councils) and all social housing is provided by housing associations.  This is the majority situation across England yet not in Scotland or Wales.

At a social rent level the average weekly rent on a 3 bed in England is £98 per week and the Merseyside average is very close to this too at fractionally under this level.

Below is a list of household types who qualify for a 3 bed social housing properties and as you can see they will all get less in Housing Benefit than the social rent level of £98 and with cuts up to £97.50 per week.

  • The lone parent with 3 children will get £91.96 in HB (£62.91 if on ESA)
  • The couple with 3 children will get £50.21 in HB (£21.16 if on ESA)
  • The lone parent with 4 children will get £24.95 pw in HB (£0.50 if on ESA)
  • The couple with 4 children will get £0.50 per week in HB as will larger households

The OBC makes the benefit tenant household financially toxic and, critically, they will not be allocated a social housing property because of this.  Prospective or new tenants number 385,000 each year in social housing and any focus just on existing social tenants is a narrow and false one.

The English Housing Survey says that nationally 36% of all social housing properties are 3 bed or larger which means that 36% of all English social housing is a no-go zone for the benefit tenant and that IS the death of the social housing model created in the 1948 Welfare State to slay the giant of squalor.

The 36% figure is a national average for England and it varies from place to place and it can be much higher and with the five local authorities that comprise Merseyside we find that:

  • Sefton has 47.94% of its entire social housing being the financially toxic 3 bed property or larger:
  • Wirral has 51.93% of all social housing being financially toxic:
  • Liverpool has 52.11% of all social housing being a no-go zone for the benefit tenant and
  • Knowsley has 58.28% and
  • St Helens at 58.71% is higher still.

MORE THAN HALF of all social housing in (low rent) Merseyside is now a benefit tenant no go zone due directly to the overall benefit cap.

I have analysed the stock profiles of all housing associations and specifically where they are the only social housing provider in the local authority area as in Merseyside.

This is not just a Merseyside issue as more than half of all social housing stock is the financially toxic 3 bed and larger properties in for example Cheshire West, Copeland, Daventry, Erewash, Gedling, Halton, North Hertfordshire, Ryedale, Teignbridge and Wyre Forest.

Thus in many areas of England the overall benefit cap makes more than half of all social housing a NO-GO ZONE for the benefit tenant not just Merseyside!

Where will the benefit tenant live if they cannot access social housing?

Merseyside as a region or sub-region is the worst affected area in England.  If we look at the proposed devolved Liverpool City Region – the 5 councils of Merseyside and Halton – then Halton also has 51.21% being the financially toxic benefit tenant no-go zone gives huge cause for concern for housing in the Liverpool City Region.

Liverpool City Council is setting up a local housing company – a private housing concern with much higher rents than HA social rent – that will make its 2 bed and larger stock being financially toxic for the benefit tenant

As none of these 6 councils has any council housing the Liverpool City Region will be 100% dependent upon the co-operation of housing associations for any housing powers it obtains.

Yet the housing associations in LCR cannot afford the benefit tenant in over half of their properties and their financial imperative will mean they will refuse to accommodate the benefit tenant household due to the OBC consequences.  The housing associations have no choice because of the scale of the OBC cuts.

That means you can add Localism being well and truly buggered by the overall benefit cap too, as well as revealing that the OBC is extremely multi-dimensional and wide-ranging and not just an existing social tenant matter at all, it is much more that that!

Where will the benefit tenant live if they cannot access social housing?

That is not just the obvious moral question, it is a question of social, economic and political importance.  This one change to housing benefit policy – that gets even worse and holds a larger cut when the current system goes into Universal Credit  – has seismic implications in relation to housing and homelessness an many other areas.

A housing association (and a council) landlord can and will refuse any nomination made to it from the local council in regard to the council’s housing and homeless duties when the benefit tenant household fails the affordability tests due to the overall benefit cap.

All nomination agreements even 100% nomination agreements are nothing more than goodwill and good intention so when the nomination is the financially toxic benefit tenant the OBC creates, that household will be refused social housing by the housing association and council landlord.

Where will the benefit tenant live if they cannot access social housing?

I recall as an undergraduate reading Politics being taught that a key criterion of any western democracy, in fact any democracy for that matter, is that it’s government provides shelter for its vulnerable citizens.

The overall benefit cap does the exact opposite and denies its most vulnerable citizens and their children a permanent roof over their heads.

Note well that I choose that word vulnerable very well here as the official DWP data on the current capped households reveals that just 1 in 7 is in receipt of Job Seekers Allowance or unemployed.  The remaining 6 in 7 or 85%+ are unable to work, not allowed to work or not expected to work and see here for detail on those figures and that terminology and see Footnote 1 below.

In very short the only way to escape the inevitable eviction and ensuing homelessness of the overall benefit cap is to work … yet 85% of those currently capped cannot easily and readily take up a job.  More of them are in receipt of what we use to call Incapacity Benefit (a very self-explanatory benefit) than receive dole being just one aspect.

Where will the benefit tenant live if they cannot access social housing?

The swingeing 23% cut to the maximum amount a household can receive – the overall benefit cap – is the death of the social housing model that was put in place in the 1948 Welfare State in that the UK will fail to house its most vulnerable

This is one of the impacts it has, just one and one of many that I will be writing about.

This death of social housing aspect is more damaging to the social housing model than any previous policy and in that I include the right to buy!

That statement will raise huge eyebrows across the housing world yet it is more than a valid posit and here and in further posts as to its impacts I will demonstrate just how damaging this policy is to the social housing model and concept.

The OBC is seismic in its consequences that are not just on housing and homelessness but on government (local, national and devolved) on health and social care and on employment and unions and on taxpayers and many other spheres and actors.  (Wait till I discuss the impact on employment, employees, employers and unions as this is staggering.)

Part 2 will follow in the next few days and then Parts 3 and 4 etc of the seismic implications for all UK society and economy of this ideologically driven policy.

I will also be discussing the full impacts on what we now call social landlords and in some detail and not just the obvious question of How can they call themselves social if over half their stock is a no go zone for the benefit tenant?

I will argue that a number of housing associations will fail completely: They will go under and not merge or be rescued by a larger HA and precisely because their stock profiles makes them too financially toxic!  Due diligence will deny any such moves to rescue them and that is how serious and seismic this overall benefit cap policy is and will be on housing.  Yet now we see its great and good tending only to see the policy in arrears terms to just existing tenants!

Finally, for now, I can’t help but wonder whether the general public would be so blasé about a concerted attack such as this with any other pillar of the 1948 Welfare State than social housing?



Footnote 1 – See the proposed solution to the OBC here from Frank Field MP to the Guardian. Frank Field is the chair of the All Party Working Group on Work & Pensions so he should of all MPs know what this policy means by way of impact yet he is clueless!
His letter says the solution is for local councils to give jobs to benefit capped households and Frank Field is clearly unaware that just 14% of capped households are deemed ready and available to work by virtue of receiving JSA and over 85% of them are not!!      This fact can be found at Tab “6” at cell D10 and says 2,930 of the current 20,124 capped households get JSA that can be accessed here.  Is it any wonder reducing the overall benefit cap was also Labour policy at page 47 of the 2015 General Election manifesto!

Further reading on the impact and scale and why the Chartered Institute of Housing figure of 116,000 households affected is bunk can be found here

For reasons unknown the CIH chose to only give numbers for households with 1 – 4 children and not for single persons (and 6% currently are single and the new cap will see more) or for families with 5 or more children that currently sees 6,725 households already capped and of course need to add to the CIH figure as does a further minimum of 6% for single persons and my analysis which also critiques their pitiful effort explains in further detail why the actual figures will be higher still.
That last point on 5+ child households is also a minimum 33,625 children alone that also needs to be added to the CIH inept and misleading figure!  Yet surprise surprise the Guardian, Independent, Shelter and Uncle Tom Cobleigh and all use the CIH figure which by their own choosing excludes this minimum 33,625 children who are already affected and their parents will have a further £500 per month cut from their houing benefit

Why the overall benefit cap is a case of No Job No Social Housing is here.

Google “Speye Joe Benefit Cap” and you will find literally scores of blogs I have drafted for the last 4 years on the OBC and which I predicted would reduce to £20,000 over 4 years ago (it was announced 12 months ago)

I could say so much more about actual conversations and meetings I have had locally and nationally over this issue yet I will always keep professional confidences.

I have been researching this policy – the worst of all the HB cuts and by some distance – since it was first mooted in 2010 – So when you shortly begin to see Shelter’s 2016 Christmas campaign which you will which will say 120,000 children are in temporary homeless accommodation this Christmas – a national scandal and outrage – just think that at Christmas 2017 this may be 500,000 and four times that and all due to the overall benefit cap policy!

Where will the children of the benefit tenant live if they cannot access social housing?  Yes that means the overall benefit cap sees CHILDREN paying for the alleged ‘sins’ of their parents!

Believe me reader I have only begun to scratch the surface of the overall benefit cap and its impacts.  There’s plenty more to come!


6 thoughts on “Benefit Cap – 50% of social housing NO GO ZONES for the benefit tenant!

  1. I wonder how many articles we’ll see in the newspapers of evicted families? Just like we see many articles about disabled victims of the farcical WCA for ESA.

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