[KF] Housing Benefit reforms announced in the Budget could have significant financial and social costs for individuals and communities - without making savings on public expenditure.
The charitable housing think tank Building and Social Housing Foundation (BSHF) has produced a comprehensive analysis of the measures in the emergency Budget relating to Housing Benefit. Coming only ten days after the Budget the report - Housing Benefit and the Emergency Budget of June 2010 - praises the aims of addressing the UK's system for providing support with housing costs, but raises significant concerns over the measures adopted.
It argues that, whilst the Budget carefully counted the savings that will flow from the measures, it made little allowance for the extra expenditure that will be triggered. The long-term costs of supporting families made homeless by the measures, for example, are not counted.
The paper's analysis draws on discussions between leading practitioners and academics held recently at Windsor Castle. It identifies many of the damaging effects that the Budget could have on individuals and communities.
It notes the risk that in the long term people on low incomes will be completely excluded from large swathes of high value areas like London, and the potential for the creation of Parisian-style banlieues, areas on the outskirts of the City with concentrations of deprivation, while the City centre becomes exclusively for the very well off.
Changes to the way Housing Benefit is calculated for families living with grown-up children (non-dependant deductions) risk having significant effects that are likely to hit the young, as they are forced to find independent accommodation, and the old, as they find their support withdrawn if they try to provide a home for relatives.
The paper also notes that the interventions could harm the supply of housing, particularly affordable housing, as social and private landlords are hit by less security in housing benefit income.
Housing Benefit and the Emergency Budget of June 2010 is available to download from the BSHF website.
Think Tank Report Raises Concerns Over Budget's HB Measures
The National Housing Federation (NHF) add their voice to the debate with claims that brutal cuts in Housing Benefit will put more than 200,000 people across Britain at risk of homelessness.
The NHF warned that plans to cut Housing Benefit by 10% for people claiming Jobseeker's Allowance for 12 months or more would lead to real terms cuts of up to 50% in disposable income for a significant proportion of the nation’s 4.7 million Housing Benefit claimants.
The cut would hit single, childless claimants hardest because they would not be entitled to any other income support from the state - other than their Jobseeker's Allowance cash.
They would be forced to make up the shortfall in their Housing Benefit with a substantial proportion of their dole money, which is worth just £65.45 a week.
The NHF calculate that an unemployed, single and childless person in London, with a weekly rent bill of £350, would see their Housing Benefit cut by £35. This would mean that if they topped up their housing benefit with part of their Jobseeker's Allowance they would be left with £30.45 for food, clothing and energy.
With not enough cash to cover their basic household bills, the NHF warns that thousands of unemployed people on Housing Benefit will fall into arrears on their rent and be evicted.
The Federation believes 202,000 people are at risk of being made homeless as a result of the Benefit cut, which will come into force in April 2013.
Even if tenants do manage to pay their rent, the extra expense could plunge people into poverty and severe debt. The change in rules would also mean that low income groups would effectively be priced out of prosperous areas like London and the South East - and away from jobs - because reduced Housing Benefit payments would make these areas unaffordable.