A huge rise in homelessness is on the way – thanks to ‘dividing lines’ on welfare

18th January, 2013 4:02 pm

The Government’s welfare reforms have been hailed as the “greatest since Beveridge” by Iain Duncan Smith. But a recent Crisis report has warned that the reforms already in place are increasing homelessness and the changes later this year  will accelerate this.  Local government is in the front line of dealing with the impact of this and we have grave concerns about the impending changes and are preparing for the worst.

In the Summer austerity will truly hit. Households claiming benefits will have their budgets capped at £500 a week, reducing their ability to pay their rent overnight. The reason? Because it is unfair for people on benefits to earn more than the average family.  At first sight this seems a compelling argument, one of apparent fairness. But dig a little deeper and it becomes clear that  this will make some of the poorest people in our communities shoulder a lot more than their fair of the burden.

This is a fine example of George Osborne putting politics before policy. It attempts to position opponents as ‘defenders of a something for nothing’ culture, and plays into the hands of a press obsessed with promoting hostility toward “scroungers” and “skivers”. Yet there is precious little evidence that the policy will save the tax payer money overall nor help people get back into work. The key assumptions behind the policy are untried and untested.

Those in urban areas will be hit hardest, with 49% of affected households in Greater London. As Labour MPs and Councillors overwhelmingly represent inner cities, it will be us who see the impact of these changes in our surgeries and case work. It’s unlikely our Tory colleagues in Oxfordshire or Surrey will see such an influx and are therefore much less likely to raise it as an issue.

The consequences have clearly not been thought through, despite warnings from a wide range of experts. The Government has estimated as many as 56,000 households will be affected across the country, in which around 190,000 children live.

In Lewisham we have identified more than 900 households who will be directly affected by the cap. More than two thirds of these are single parents and the majority live in the private rented sector. Some of those identified will lose just a few pounds a week, but others will see hundreds of pounds wiped from their weekly budget.

It is the staggering cost of renting a home in London which pushes most of these families above the cap. By taking away their housing benefit first, thousands of families will be forced to choose between paying their rent and feeding their children. The government thinks the solution is simple – find a cheaper place to live. But in London, in the middle of a housing crisis, finding a home to rent underneath the cap will be all but impossible.

As benefits are cut and rent arrears increase, we’re expecting families will turn to their council for help. We’ll have no option but to accept them as homeless and may have to place them in expensive temporary accommodation, incurring additional costs ourselves. We will have the same difficulty finding properties below the benefit cap when identifying a more permanent home. A ready supply of social housing would help alleviate the issue, but this just does not exist. The new social homes that are being built under this government’s housing policies, which allow ‘affordable rents’ at up to 80% of the market, will make no difference to this problem.

As the Crisis report identifies, previous changes to housing benefit have already forced some London councils to seek homes for families outside of the Capital, something which they have already been attacked for. No one in their right minds thinks it’s a good idea to move families on mass hundreds of miles away from their home borough, but the impending changes make this scenario increasingly likely. If the Housing Minister is serious about preventing this, he should raise it with his colleagues in the Department for Work and Pensions and stop blaming local authorities.

These consequences are completely uncosted. Government has made no attempt to estimate how much local government and other bodies may spend supporting affected households, nor any of the impacts of household behaviour – there is no assessment as to what happens if any those 190,000 affected children have to move schools. How will it affect their life chances? How will it affect their health? Are different agencies prepared?

Of course, the best solution to the rising benefit bill is to get people into work as Labour has argued, but at the moment the right jobs are not available. For single parents, who would likely have to pay high childcare costs on top of their rents, a well paid job would be needed. A cursory glance at the Job Centre adverts will tell you how hard they are to come by.

The household benefit cap is just one part of the government’s welfare ‘reforms’. Cuts to council tax benefit, the social fund and the new under occupation rules are all about to be implemented. Our best estimates are that these will impact upon the same groups of people as the benefit cap.

The increasing costs of the welfare state do need to be tackled. But Ministers need to recognise that the cause of this is rooted not in ‘lazy benefit scroungers’, but in high housing costs, unemployment and low pay. The solutions need to focus on reducing private rents, building significant numbers of genuinely affordable homes (which will also create jobs) and a promoting a living wage. A focus on jobs and growth should be the main priority of any government.

As the debate on the Welfare Benefit Up-rating Bill has shown, commentators are quick to sight welfare as a vulnerable area for Labour, noting that public opinion is apparently more supportive of the Tory position. But this takes little notice of the policies that are about to be enacted. By the time of the 2015 election the benefit cap will have been in place for two years. The reality of the consequences will be hitting home. Families being forced out of their homes. More people living on the streets. Children going hungry. If this happens, the public will rightly demand something is done to tackle it. Labour must ensure it has a policy which does just that.

Sir Steve Bullock is Mayor of Lewisham and leads on housing issues for London Councils. 

  • Monkey_Bach

    If I believed that the Labour Party recognised these problems at least I would have hope that they might begin to be tackled when the Coalition falls but I don’t. I am not in the least bit convinced that the upper echelons of the Labour Party care one whit about the lives and fate of the unlucky people affected by the benefit cap and welfare cuts any more than the Tories. Eeek.

    • aracataca

      The Parliamentary Labour Party voted unanimously against the Housing Benefit Cap and more recently voted unanimously against the 1% limit on rises to benefits in general.
      Of course Monkey your beliefs have a tendency to conflict with empirical data and broad rhetorical sweeps like that above have a tendency to replace positive suggestions on how people can be practically helped.
      That said the Housing Benefit Cap is going to put children on the streets or in miserable bed and breakfast accommodation and (IMHO) one of the first things we should do on entering office is to scrap this malevolent measure which is largely based on a big fat myth about Housing Benefit recipients.

      • Monkey_Bach

        Has the Labour Party committed itself to reverse the housing benefit cap if/when it wins power at the next election?

        If it has that’s news to me.

        Similarly what chances are there that the Labour Party will abolish the pernicious “bedroom tax” which forces the poorest in society to subsidise rents out of benefits which are already barely enough to live on? A majority of people affected by the “bedroom tax” will not be able to “downsize” to smaller rented properties because such properties either don’t exist in sufficient quantity, or will be too expensive to be affordable to people existing on small fixed incomes, or will be unobtainable for other reasons, e.g., landlords refusing to rent to the sick or unemployed.

        And has Labour promised to reverse the exceptionally perverse 1% cap on benefit uprating if/when it is returned to power and to increase benefit payments to a level they would have reached if the Tory real-terms cut in their value had never happened in the first place?

        Voting against something you cannot prevent from happening isn’t the same as doing something positive to make a fearful and diabolical situation better, even if it’s only speaking out against injustice and trying to dispel malicious lies. We all know that it was touch and go whether of not Labour would vote against or support the measure: I doubt if the Party would have opposed real-terms cut in benefits if only non-working benefit claimants were the minority impoverished by the cut. It’s all about strategy not morality these days don’t you know? Polls. Psephology. Focus groups. Bread and circuses. The usual. And my suspicion is that, as during the Blair days, when it comes to repealing nasty pieces of Conservative legislation Labour will say something along the lines of: “We tried to stop it and voted against it but now that it’s happened won’t do anything to reverse it.”

        But we will see.

        By expecting nothing when nothing happens at least I won’t be disappointed and may even be mildly pleased that things aren’t being deliberately worsened by a political party which, once upon a time, long long ago, had courage, principles, better leaders and actually stood for something.


        • aracataca

          We’re not in government and it’s 28 months till the election. In the 80s/ early 90s we announced our policies years in advance of the election and it was a disaster for us which is in large part why we’re not doing it this time around – that is a sensible course to adopt.
          It’s up to us to fight for repeal of this measure to be included in the manifesto.Personally I’m hopeful and confident it will be.

          • Monkey_Bach

            I hope I’m wrong and that you’re right but if you’re not I won’t be disappointed. People like Liam Byrne and Yvette Cooper always seem to have the capacity to live down to my expectations, no matter how low. Eeek.

          • aracataca

            ‘I hope I’m wrong and that you’re right’….. are you?

          • Monkey_Bach

            Whatever happens after the next election is likely to be severely disappointing as far as I’m concerned and for you too I wouldn’t be surprised. But any Labour government, as sorry as the Labour Party has become, would be an improvement on the Coalition let alone a majoritarian Tory government. Eeek.

    • David Parker

      It is not that upper echelons of the Labour Party do not care but they lack the clarity of purpose and the courage to lead a popular opposition to the Tory onslaught on the public sector. They need first to hammer home the ideologically driven nature of Tory policies and then take Ed Milibands recognition of the limitatiions of market solutions to its logical conclusion with proposals for a massive programme of public house building, a cap on rents in the private sector and a drive to raise the minimum wage.

  • Quiet_Sceptic

    The elephant in the room is population growth. London’s housing problems are and have always been too many people chasing too few houses and too little undeveloped land to build sufficient houses on.

    The author criticises the idea of families moving out of their home borough, yet if he knew anything about London’s housing history he would know that for most of the post-War period that was the key part of London’s housing policy. Look at the London County Council, look at the New Towns Commission; their function was to build towns and cities which could accommodate people leaving London, hundreds of thousands of people, housing for the ‘London Overspill’.

    London isn’t going to build its way out of its housing problems, it needs to learn the lessons of the past and find ways to stop its population growing.


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