Concern Over Budget Impact On Homelessness
The national umbrella organisation for frontline homelessness services Homeless Link and the National Housing Federation have both expressed concern about the potential impact of the budget on homelessness highlighting how the reform of housing benefit (HB), as outlined by Chancellor George Osborne in the coalition government’s emergency budget, will hit vulnerable people the hardest.
The Chancellor spoke of the Housing Benefit bill being out of control and of the need to cap how much benefit was paid to individual households through restricting local housing allowances, which currently only apply in the private rented sector. The Budget Report gives more detail and announces that the local housing allowance will be set from October 2011 on the 30th percentile of local rents, though it will be up-rated in line with the consumer price index. The report goes on to announce that Local Housing Allowance will be capped at £250 per week for a one bedroom property, £290 per week for a two bedroom property, £340 per week for a three bedroom property and £400 per week for four bedrooms and more.
The National Housing Federation has warned that in setting the cap the Government would need to ensure that local authorities could cover the costs of rent for homeless families placed in temporary private rented accommodation, pending re-housing. Jenny Edwards, chief executive of Homeless Link has commented that “…with no sign that the shortage of social housing will change, the private rented sector has become the best chance of a home for many unemployed people or those on low incomes. It is vital that the drive to cut costs in the housing benefit bill
does not inadvertently drive up homelessness. This would be a very costly own goal for government.”
In his speech, the Chancellor also spoke of the need to limit Housing Benefit for those living in social housing to appropriately sized accommodation. The Budget Report has announced that ‘from April 2013 housing entitlements for working age people in the social sector will reflect family size’.
However, NHF’s chief executive David Orr points out that “whilst it is good that these restrictions do not apply to retired people, they should not mean that people of working age feel forced to move to give up a spare room if their children have grown up and left home. Having a spare room where children can come and stay is an important part of family life and the ongoing support that parents like to be able to give their children’.
The budget report also announced that Housing Benefit will be reduced from April 2013 to 90% of the initial award after 12 months. Jenny Edwards, chief executive of Homeless Link comments “There is a real risk to voluntary sector accommodation for people who are homeless and need support. We are hearing from our member organisations that many of their residents have been allocated to JSA quite suddenly, despite their vulnerability. The plans to introduce a 10 per cent cut in HB for people who have been on JSA for more than a year could result in an impossible choice for charities - between taking a 10 per cent drop in their rents or evicting their tenants into homelessness. Often homeless people already pay top up charges from their benefits. There is a clear correlation between top up charges and an increased likelihood of evictions and abandoned tenancies.”
Homeless Link are calling on the Department of Work and Pensions to introduce special arrangements for tenants living in supported accommodation, which reflects their vulnerability and distance from the labour market.
Jenny Edwards also states “We already know that there has been a substantial drop in charitable donations to homelessness charities. This is now coupled with the prospect of a quarter of local government spending being cut at the time when the ring fence to Supporting People funds has been removed.
Add to that the prospect of cuts from Housing Benefit and a rising flow into homelessness as families come under intense pressure. The risk is that we could enter a perfect storm.
It is imperative that the Government joins up its strategies across these areas to ensure that upstream homelessness prevention saves communities and individuals as well as the costs of homelessness”.