Industry news


Thousands on 50p-a-week housing benefit, Panorama finds


More than 7,500 households have lost their housing benefit and instead receive a nominal 50p a week because of the welfare cap, a BBC investigation has found. The tenants affected are concentrated in


cities in the North and Midlands. Birmingham has the highest number of households on 50p a week housing benefit - 578 out of 2,968 that are benefit-capped. Leeds is second (223 out of 993) and Manchester is third (179 out of 833). A Panorama survey of hundreds of


councils shows at least 67,600 homes in England, Scotland and Wales have lost some money due to the policy of capping benefits at £23,000 in London and £20,000 in the rest of the country. The nominal sum of 50p is paid so that


those households can claim access to an emergency fund if they need to. Without this, they would receive no discretionary help with their housing costs.


“There is recognition that the current policy needs to be relaxed, with housing associations given greater incentives to increase their housing output“


Homelessness risks


Alison Garnham, chief executive of the Child Poverty Action Group, said: "Removing people's housing benefit basically means that people can't afford their home, so it puts people at risk of homelessness. It also means that they have to use money that's intended to buy food for their kids and for their other living expenses - this has to be used to plug the hole in their rent." Where someone finds work - 16 hours a


week for single parents, 24 hours for a couple - their benefits are reinstated, and research suggests about 5 per cent of those affected by the cap have returned to work. But Ms Garnham said about 80 per cent of


those affected cannot be expected to work as they are sick or have very young children. Welfare delivery minister Caroline Nokes


said the benefit cap was introduced to "level up the playing field between families who are in work and those who are reliant on benefits". She added: "What we sought to do was incentivise work because we know that the outcomes for children will be better if they are in families that are working."


Ministers reverse universal credit policy for homeless families


emerged of ‘an explosion in rent arrears’. Councils in south London say rent collection


G


levels for homeless tenants placed in emergency accommodation have collapsed following the introduction of the UC digital service last year. This was proving particularly embarrassing


for Housing Minister Gavin Barwell, who represents a Croydon constituency and has a policy brief for the whole of the capital. Croydon council has said it faces an unpaid


£2.5m rent bill this year as a result of problems with UC and has warned ministers this scale of losses is unsustainable. It said the costs were leaving it and other councils potentially unable to meet their statutory duties under homelessness law.


Delays


Under universal credit rules homeless families who are put up in short-term, bed and breakfast accommodation have to wait six weeks to qualify for rent support. Council leaders say this is incompatible with laws that require councils to move those families on to more suitable accommodation within six weeks – so they have already left by the time their first UC payment arrives. Large numbers of families placed in B&B


lodgings in the south London boroughs of Croydon, Southwark and Sutton have run up rent arrears averaging £1,500 before being transferred by the authorities, leaving the councils to foot a bill that under the old system would have been met by housing benefit. The Department for Work and Pensions is


now working on introducing an exemption for people who are made homeless, so that councils can “fully support” them in temporary accommodation.


overnment Ministers have bowed to pressure to exclude homeless families from Universal Credit after reports


Croydon council is one of the few areas


where UC has been fully rolled out. Some 1,250 of their 14,000 tenants are on universal credit. While the council’s normal rent collection levels stand at 98 per cent, for tenants on UC this drops to 72 per cent. For those in temporary accommodation, it fell further to just 59 per cent in Croydon, 44 in Sutton and 51 in Southwark.


“There is recognition that the current policy needs to be relaxed, with housing associations given greater incentives to increase their housing output“


Debts


Alison Butler, deputy leader and cabinet member for homes, regeneration and planning at Croydon Council, said universal credit and the benefit caps “have left hundreds of Croydon families in more debt and saddled the council with spiralling costs. The government must fix this flawed policy before it goes nationwide.” She added the council had “repeatedly”


raised concerns with the government and welcomed the move to consider exemptions for homeless families. Universal credit was introduced by the


former Work and Pensions Secretary Iain Duncan Smith as a way of ensuring claimants would be better off in work than on benefits. However, cuts to work allowances within UC have reduced the incentive for some claimants to get a job and will leave 1.2 million working families worse off.


www.housingmmonline.co.uk | HMM May 2017 | 7


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