Yesterday I started some outline thoughts on the LHA Maxima Cap consultation and began:
The current consultation paper on the funding for supported housing is not just a mess it is dangerous and in the four following areas:
- Is Sheltered Housing supported housing?
- Why no consultation on the affects on general needs social housing
- The commissioning process
- Universal Credit
Part 1 is hyper linked in red above and should be read first. In overview it questioned whether Category 1 sheltered housing, those schemes with no resident warden and potentially de minimis levels of support, are covered by the proposals.
If they are not then any rent that is now charged over and above the local housing allowance or LHA rate will NOT go into the proposed commissioning pot and thus we see a massive cut in funding that makes such services non financially viable.
Take the scenario which is very common across the North of England of the 1 bed LHA rate being £86 per week and a 1 bed category 1 sheltered flat now having a rent of £110 per week. Currently the full £110 is paid by housing benefit.
(A) If this is covered by the proposals then £86 is then paid in housing benefit and the £24 above this goes into the local commissioning pot;
(B) If this is not covered by the proposals then £86 is then paid in housing benefit and the sheltered tenant needs to make up the other £24 per week.
Option (A) still means that what is now paid out as a right to the sheltered tenant is now dependent on the local council (who is given all these £24 per week elements in a support pot of funding) commissioning that service and continuing to re-commission it and as yet no detail has been given as to whether this is yearly, 3-yearly or any other commissioning duration which is decidedly worrying.
If the local council decides not to recommission or even imposes constraints as to who is allocated a property there by some form of gateway service then this is hugely problematic and I will take this up in Part 3 of this series.
Option (B) means the proverbial hits the fan and the sheltered tenant who is primarily the pensioner or pensioner couple will have a deduction of housing benefit yet will not under occupy their 1 bed sheltered property and why this has wrongly been dubbed the bedroom tax for pensioners – As the facts show it is much worse.
Option (B) also means that the category 1 sheltered housing is not supported housing because of its negligible support but is simply general needs housing of which this consultation fails to discuss at all as to how the LHA Maxima will impact and to which I now turn.
Why no consultation on the affects on general needs social housing?
This is perverse as the LHA Maxima cap will wreak havoc and lay waste to the provision of general needs housing across the English regions as it will become the bedroom tax for pensioners in general needs social housing.
The pensioner / pensioner couple will be affected if they under occupy and even in some areas if they do not under occupy – and note well outside of but not in London and other high private rent areas.
Ever since the bedroom tax began we have been told there are over half a million pensioners / pensioner couples who under occupy yet these are exempt from the bedroom tax because they are pensioners. The Telegraph ran such an article (often misinformed in parts) here in February 2015 that I commented upon and revised again back in December 2016 here that provides much detail.
Pensioner / pensioner couples will be entitled to the 1 bed LHA rate in their local authority area which in some cases such as Hull can be as low as £69 per week and that is the total amount of housing benefit they will receive. This will apply to all new pensioners from 2016 and to all existing pensioner / pensioner couples when Universal Credit is rolled out. It will not affect pensioners in London given the 1 bed LHA rate that they will qualify for is as much as £262 per week there.
So the pensioner in Hull and other low private rent areas will have a form of bedroom tax imposed despite not under occupying their social housing property.
The 500,000+ pensioner / pensioner couples who do under occupy will also be hit and these typically are the family homes that a couple has raised their families in and where the children now are adults and have families of their own. The place where the grandchildren go to get spoiled by these social tenant grandparents of a Sunday.
Many of these pensioner / pensioner couples will live in 3 bed properties, the family homes in which they raised their families, yet currently are exempt from the bedroom tax despite under occupying. Now they get their full rent paid in housing benefit yet under the LHA Maxima policy they will only get the 1 bed LHA rate as they only qualify for a 1 bed property.
Below is a table that shows the areas in England where the 1 bed LHA rate is less than the average 3 bed social rent level and in which the pensioner / pensioner couple who do under occupy will be hit by the backdoor bedroom tax which the LHA maxima cap policy introduces.
The above table is far from exclusive as it only details those areas where the 1 bed LHA rate is below £96 per week which is the national average 3 bed social rent level. So this backdoor bedroom tax in the LHA Maxima will apply in areas with higher than average social rent levels too
I stated above that this will apply to all new pensioner / pensioner couples from 2016 and then to every under occupying pensioner / pensioner couple when Universal Credit fully rolls out. That is valid yet not entirely true as it applies to all new pensioner tenancies from 2016 not just new tenants.
By that I mean a pensioner couple with a joint tenancy for 20 or even 50 years and then one member of that pensioner couple dies or has to go into a care home which means the former joint tenancy becomes a sole tenancy and thus a NEW tenancy.
Those circumstances are quite common and certainly foreseeable which makes the total absence of any consultation on how the LHA Maxima cap policy affects general needs social housing tenants perverse and shameful by this Tory government.
It is also political suicide as no political party wants to threaten the grey vote which is crucial to all political parties and thus reveals just how ill-conceived the LHA Maxima cap policy is.
To continue on the ill-conceived nature of the policy my article on this in December 2016 said, correctly, that it means the pensioner / pensioner couple in London can have 4 or even 5 spare bedrooms all paid in full by housing benefit and even when it rolls out fully under Universal Credit … yet the pensioner / pensioner couple in Hull will not get even in housing benefit / housing payment under UC to cover the cost of a 1 bed property!
I think we can safely say that the Tories do not want to incentivise that the regions all send their pensioner / pensioner couples to London so they are the only social housing tenants there! Yet that is precisely what this truly perverse pig’s ear of a policy does!
The LHA Maxima cap policy and how it affects general needs social tenants is, regrettably, just another example of the Tory government not knowing what it is doing when it comes to housing and housing benefit policy!
Finally, if you really want to see just how the government does not know its humerus from its rectum with the LHA Maxima Cap policy, I can assure you that the final part of this trilogy as to the consultation which covers both the commissioning process and UC is going to hammer that home with the biggest sledgehammer possible.