We have commented before on Red Brick about the way this Government has downgraded equality impact assessments as part of the policy-making and legislative processes. Under Labour they became a vital part of the process of scrutiny.
By looking at policy proposals from the perspective of defined groups in the population who may be advantaged or disadvantaged by the changes, the process requires civil servants and the Government to think more and reveal more about how the policy will work in practice.
Tag: Welfare Reform
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Pinocchio hits the airwaves
On the day that the Lords’ debate on the Welfare Reform Bill reaches the total benefit cap, which has huge implications for housing and homelessness, Red Brick favourite Iain Duncan Smith has hit the airwaves big time. Unfortunately interviewed mainly by people who don’t know their arsenal from their elbow, his extraordinary statements are largely unchallenged.
As readers will be aware, Pinocchio was prone to fabricating stories and creating tall tales, but his nose grew longer and longer as he did so. After his interview on the Today programme, I’ll be surprised if Mr Duncan Smith managed to get out of the studio without serious rhinoplasty.
His first major claim was that the total benefit cap will lead to ‘no increase in child poverty’, despite all the evidence to the contrary. It seemed that the main reason he could claim this was that the Department of Work and Pensions had not even modeled the change in poverty because ‘you can’t directly apportion poverty to this measure’ and they don’t believe it will increase because they ‘will work with families to find a way out’. Evan Davies has plainly never heard a whackier claim for a product since Dragons Den.
The second claim was that the poor deluded Bishops – he really doesn’t think much of Bishops – were wrong to say that families would be losing child benefit (they argue that CB is not a means tested welfare benefit therefore should be excluded from the cap). Ludicrously, he said this is because the total benefit cap applies to all benefits therefore you can’t actually say that they will be losing CB when they reach the cap.
Thirdly, IDS said there will be no increase in homelessness ‘as the public understand it’ – whatever that means. He accused opponents – again including the unfortunate Bishops – of ‘bandying about’ a definition of homelessness that included counting anyone as homeless whose children shared a room. Personally I have never heard anyone say such a thing. Nobody he said would be made homeless without a home to go to but nor would the Government ‘trap people… in homes they can’t afford to go to work from’.
It would seem to me that the definition of homelessness that should be used is the one set out by the Government itself in considerable pieces of legislation. By their own definition, and in the admission of one Eric Pickles, welfare reform will increase homelessness by at least 40,000 and that excludes people who will fall outside the definition of priority groups.
There are vital amendments down today, including the exclusion from the total benefit cap of child benefit and the exclusion of homeless households in temporary accommodation being promoted by Labour front bench spokesperson Lord Bill McKenzie.
I hope Labour Peers will turn up in force to stand up for the tens of thousands of children who will be driven into poverty and the tens of thousands who will be made homeless by these measures, whatever Pinocchio claims.
Update 24 January: The Lords passsed the amendment moved by the Bishop of Rippon to exclude Child Benefit from the total benefit cap. The Government has said they will seek to reverse their Lords defeats when the Bill returns to the Commons. The amendment to exclude homeless households in temporary accommodation was defeated. Many good points were made in the Lords debate and all of the speeches can be found here.
As the Welfare Reform Bill returns to the House of Lords, it is becoming ever more obvious that the Tories and LibDems have no idea what they are doing and the damage they will cause.
We have covered the Bill before on Red Brick, for example here and here, but it is emerging that the total Household Benefit Cap will possibly be the most damaging change of all. And it is the least well understood.
In theory the cap is, according to DWP’s impact assessment: ‘a cap on the total amount of benefit that working-age people can receive so that households on out of work benefits will no longer receive more in benefit than the average weekly wage earned by working households.’ The limit, expected to be around £350 a week for a single person and £500 a week for families with children, not only includes out-of-work benefits like Jobseekers Allowance but also benefits which are available in and out of work like housing benefit and benefits that are available universally like Child Benefit.
The comparison with ‘the average weekly wage’ immediately falls down because in-work benefits are excluded from the calculation. It is not a like for like comparison of household income. It’s a crude and vindictive policy that can only have been invented by drunkards after a bad night on the ale, which makes it all the more regrettable that Liam Byrne has supported the principle. The only defence of his position is that the line that people on benefits shouldn’t get more than people in work spins well.
However the real disgrace is that Iain Duncan Smith and his Department are not able to say what impact the policy will have and on whom. Their estimate is that around 50,000 families will receive less benefit because of the cap (it only applies to those of working age). They admit, as with many of their tax and spending cuts policies, that the biggest impact will be on the larger families – over 80% of those affected will have 3 or more children. On average, household losses are expected to average £93 per week. 35% will lose more than £100 per week.
DWP estimated, in response to Parliamentary Questions, that 70% of those affected would be social tenants leaving 30% (around 15,000) as private tenants. These estimates are counter-intuitive and extraordinary given the importance of housing benefit in the calculation of the cap and the huge difference between private and social rents, and they led frontbencher Karen Buck MP on a voyage of discovery about the statistics and the relationship between the new cap rule and other statutory duties. Well, given the lack of answers, it has been more of a voyage of non-discovery.
Eric Pickles has already accepted that the cap will cause about 20,000 extra homelessness acceptances on top of the 20,000 extra expected due to the other housing benefit changes. That’s a lot. Homeless households placed in temporary accommodation in the private sector by their local authority are subject to the cap. Their rents are high and they are often unable to work because of the disruption caused by homelessness. Previously they may have been waiting for a social rented flat, now more likely they will be waiting for their local authority to discharge its duty by finding them a suitable letting in the private sector. There are 49,000 households in TA in England, nearly 36,000 in London. Many of these are likely to come up against the cap. However DWP cannot even say if such households have been counted in the 70% (social tenants) or the 30% (private tenants). If it is the latter, the figures just do not add up, given how many ‘ordinary’ private tenants in inner London will also come up against the cap – after all, unemployed people living in mansions in posh bits of London are supposedly the primary target of the policy.
My understanding of the homelessness legislation is that any shortfall between housing benefit receivable and the cost of temporary accommodation is met by the council concerned. So any existing homeless household in TA that falls foul of the cap would have the excess charged to the council’s General Fund rather than to the housing benefit budget, not something that councils will welcome. And when the council is seeking suitable accommodation for the family, it will only be able to discharge its duty if the accommodation is affordable. If the family is subject to the cap, the council might have real difficulty in making such accommodation available.
Similarly complicated considerations will apply for any private tenant falling foul of the cap. If they can no longer pay their rent, they are threatened with homelessness for arrears. If the reason for the arrears is the withdrawal of housing benefit, the council would seem unlikely to me to be able to argue intentionality. The household will have to be accepted as homeless and the same complicated arrangements for TA and for the discharge of the council’s duty will ensue.
The Government does not yet seem to have decided, if a household is subject to the cap, which benefit they will actually lose. Until Universal Credit comes in, the cap system will be administered as part of the housing benefit system. But could they decide that, to make up the average £93 loss, the family is effectively losing its Child Benefit, thereby protecting its housing benefit? That would effectively end Child Benefit as a universal allowance. Or will housing benefit always be the variable sum? In which case how will councils discharge their homelessness duties where they have to secure accommodation that is affordable? The Government’s belief that ‘affordable rent’ properties will be offered to the same profile of people as ‘social rent’ properties is now even more questionable.
The implications of all of this seem to be lost on the Government, at least in their public pronouncements. There would seem to me to be new incentives for households to seek the limited protection offered by the homelessness legislation and, for example, always insist on making a formal application under the legislation rather than accepting an informal arrangement though the prevention and relief of homelessness duties.
Finally, it will come down to money. There seems a risk that the impact of the cap will bear down only on housing. For households in TA this would seem to imply a transfer of cost from the national HB budget to the local General Fund – not welcome. There will be many more people moving through the homelessness system and councils will find it exceptionally difficult to secure accommodation for families subject to the cap. For some families with children facing the cap there will be strong pressure to resort to s17 Childrens Act payments to maintain the family in their accommodation rather than face the prospect of taking children into care. Many councils will face the possibility that the only way to find affordable housing for a family subject to the cap will be to move them a long way away. And that will pile costs on to the receiving councils.
I can find no evidence that any of these complexities have been considered by Ministers, at least in public, and they divert any attempt to pin them down because statistics aren’t available. As they pursue the little ideological tantrum that produced the idea of the cap in the first place, they have a responsibility to do some research and explain who will be affected and what will happen to them.
The Welfare Reform Bill returns to Parliament this week and this may be the last
opportunity to kill or seriously change this unpleasant measure.
To mention just 2 of the proposals:
- The new benefits cap will heavily penalise larger families and those living in parts of the country with higher rents.
- The plans to introduce a penalty for under occupancy will mean that any tenants deemed to have one or more spare bedrooms will see benefits slashed.
Congratulations to the National Housing Federation for organising a National Welfare Week of Action starting today. There are a lot of proposed activities during the week.
Each day has its own theme and many of the activities are aimed at lobbying MPs. See here for more information.
David Orr, the Federation’s Chief Executive, said: ‘The very people the government should be helping during these tough economic times: the disabled, foster carers and families – are exactly the people who will be hammered by these measures. Hard up families will be left with a stark choice if these proposals go ahead: either move out of your home to a cheaper area or stay put and live in hardship or debt.’
‘We believe these reforms will be hugely damaging to community life and will see people priced out of their homes, away from local schools, and their support networks. With time running out to influence ministers, this week is the chance for anyone who is concerned about these proposals to stand up and be counted.’
Red Brick would urge our readers to spread the word and join in wherever possible.
I think Labour has got into a bad place on welfare reform. It’s not just since Ed Miliband became Leader, it developed during the Labour years in government. I think it is driven by the overwhelming dominance of the Daily Mail agenda of wild exaggeration about benefit cheats and scroungers and how this feeds into opinion polls. We have not found a way to counter the hugely successful tactics of the right in turning public anger about failing economic performance into hostility against the poor and not the rich. Why is the country not up in arms against the bankers and the mega-rich – the people who run the system, benefit most from the system, who have lined their pockets in the most extraordinary way over the past decade and failed everyone else whilst they were doing it?
On Monday former political advisor to Tony Blair John McTernan was on Daily Politics. Commenting on Ed Miliband’s speech, he said that the Leader was ‘missing symbolic policies that indicate which side he’s on’, adding: ‘If he’s serious about saying if you get a job you should be looked at more seriously for council housing rather than simply council housing being for welfare recipients, I think that’s a big signal, it’s a signal that if you get on, if you better yourself, the state will be behind you, I think that’s a much more powerful signal than anything he’s said on policy before.’
This repeats a myth about council housing, which isn’t and never has been (but will be if Shapps gets his way) allocated according to income or employment status but according to defined housing need, it fails to acknowledge why most people receive benefits (unemployment, illness, disability, retirement) or to explain why they are somehow undeserving of a home. It accepts the ‘welfare recipient’ stigmatisation in its entirety. Like the use of the term ‘lifetime tenancy’ when there is no such thing, the term ‘welfare recipient’ carries a package of prejudices and negative images, and has become a classic stereotype. Even Andrew Neil seemed pleased with this contribution.
Ed Miliband’s speech was more balanced than the spin suggested, as Tony described in his earlier post, but it’s the spin that bothers me. He accepted that there was a ‘terrible shortage’ of social housing and that ‘it will be a key test of the next Labour government that we address this issue’. But the sterotype still crept in a roundabout way. ‘People who give something back to their communities – for example people who volunteer or who work’ should be given higher priority in allocations. But it seems to me to accept the media presumption about who lives in social housing and that there is something deficient about them compared to those that ‘give something back’.
More than half of social tenants are retired or economically inactive for reasons other than unemployment. Of the remainder, the vast majority are actually in work or full time education. People entering social housing are often enabled to work for the first time because rents are affordable and the transition to in-work housing benefit is managed better. The level of volunteering on some social housing estates is extraordinary, something we should celebrate, they put Cameron’s prissy big society full of lady bountifuls to shame. The vast majority of tenants are already ‘responsible’ just like the vast majority of home owners and private tenants are.
Ed makes the point that he wants to reward contribution and not punish people. But there is shortage and the people who get punished are those that won’t get a home as a result of a change in priorities – your grannie who needs sheltered housing, your cousin with a severe medical condition who can’t stay in a private bedsit in a shared house, your son or daughter who has had a breakdown and needs supported housing, your sister with 3 kids evicted from her home because she can’t keep up with the mortgage. None of them working and none of them able to volunteer. These are not tearjerkers, this is the real life business of allocating social housing.
John McTernan rightly said that Labour can’t win unless it is seen to represent a wider coalition of people. I am less sure about his view that we were seen as the party of lone parents and immigrants (lone parents and immigrants won’t agree). I think Labour came to be despised by a lot of natural supporters because of Iraq and because of Labour’s association with the rich – not the poor. We no longer looked like the party of ordinary Britain. The parties on yachts in the Med, the moth-like fascination with the wealthy, our soft line on the bankers and the undeserving rich. Not forgetting the mad in-fighting which diverted the government from the ordinary issues facing people.
We fall into the hands of the forces of darkness every time we play the undeserving poor game, every time we add to the negativity around ‘welfare recipients’ without explaining who they are. Every time we fail to challenge the belief that ‘the housing benefit bill was out of control’ rather than point out that rents have gone up and caseload has increased due to the resurgence of the private rented sector. If, as John McTernan seemed to me to be saying, you can only get the middle class on board by dumping on the poor, then the game is up for the left and every variety within it. But if he meant it when he said that we need to have policies attractive to people in the middle as well as at the bottom, then there is enough common ground to unite us all. Because Labour should be on the side of both.
The Welfare Reform Bill, currently in Committee Stage in the House of Commons (follow the debates here), contains many provisions which will have a profound effect on the housing opportunities of people on low incomes in the years to come.
One of the changes that has attracted little attention is designed to tackle under-occupation in the social rented sector. From 2013 housing benefit will be reduced if the household is of working age (the limit is rising from 60 to 65) and is deemed to be living in accommodation which is too big for their needs. An ‘underoccupying’ claimant will lose a proportion of their HB, which will no longer meet their current housing costs, with an average loss of £13 per week.
The government’s own impact assessment estimates that 670,000 social tenants will be affected, around one-third of all HB claimants in the sector. In the north, between 40-50% of tenants will be affected, in London around 20%. This is an extraordinary number of people.
Affected tenants will face a ‘choice’: make up the shortfall from their other income, take in a lodger, or move to smaller accommodation in either the social or the private rented sector. Even if only half of those affected decide to move, pity the poor landlord in the north when 1 in 5 of all tenants knock on the door asking for an urgent move to smaller accommodation. In London, additional transfer requests from 10% of tenants would swamp the housing allocations system.
Nearly 4 in 5 of those affected currently ‘underoccupy’ their homes by just one bedroom. They are hardly evil – most people with one spare bedroom do not recognise themselves as underoccupiers, and often the last bedroom is small anyway – but they will lose £11 per week on average. Over recent years policy had moved strongly towards recognising that the real challenge in underoccupation is to tackle cases where there are 2 or more spare bedrooms, where there is most to gain. Under the new rules, a family of 6 with 2 sons and 2 daughters living in a 4 bedroom property would be deemed to be underoccupiers, and would receive the arbitrary HB ‘fine’.
The loss of an average of £13 per week might not be noticed by the Cabinet of millionaires, but this is a huge sum of money to anyone on a very low income. The policy’s only chance of success will be if there is a supply of smaller homes to transfer into. Yet the government’s impact assessment admits that there are simply not enough smaller housing association and council properties available.
The policy is the opposite of the ‘moral hazard’ – where people are insulated from the consequences of their own actions. In this case people will face the consequences of the government’s actions with no reasonable course of action open to them to avoid or pre-empt or respond to the change in policy. It is coercive and in a nasty way: if they cannot move, they will face deliberate impoverishment with no way out.
Will the policy achieve its stated aim and save any money? Labour shadow welfare reform minister Karen Buck thinks not. Tenants who are unable or unwilling to move will fall into rent arrears, with the risk of eviction (and loss to the landlord) triggering the costs associated with a rise in homelessness. The government thinks that some will move into the private rented sector, where rents are higher even for smaller properties, so the cost will go up not down.
And in a final irony, the policy will not even address, indeed will avoid, the biggest single issue in the underoccupation debate – which is what to do with underoccupiers of retirement age whose family has moved on.
For our previous post on the Tories’ market solution to underoccupation, click here.
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Simply complex
Hands up if you understand the welfare reforms unveiled yesterday by Iain Duncan Smith. How can a simplified system be so complex to understand?
Fortunately the public seem to have a grip and polls show a healthy majority agree with the government’s position. IDS seems to have pulled off a magic trick. He will simplify the system into a single Universal Credit by 2013, he has promised to improve substantially the marginal rate (how much people keep from extra earnings taking account of benefit withdrawal), he has promised there will be no cash losers, and he has got the public onside.
I have little doubt that the golden scenario will begin to unravel with a little more analysis. Labour’s shadow work and pensions secretary, Douglas Alexander, pointed out that the ‘no cash loss’ promise did not appear to apply to new claimants, and of course turnover is high. The Child Poverty Action Group were most concerned about the removal of hardship payments drawing attention to the main difficulty in withdrawing benefits from people who refuse to take jobs – making children suffer for the sins of their parents (Mr Duncan Smith likes to use the word sin).
The simplicity aim has wide support amongst advisers, including the CAB. The government claims that Universal Credit “will support people both in and out of work, replacing Working Tax Credit, Child Tax Credit, Housing Benefit, Income Support, income-based Jobseeker’s Allowance and income-related Employment and Support Allowance”. As always, the devil will be in the detail. UC will be a basic allowance with “additional elements for children, disability, housing and caring”. Experience tells me that none of the add-ons will be simple to understand or to calculate. The devil will also be in implementation. A welfare system that is widely regarded in the media as soft and open to abuse is simultaneously experienced by users as inflexible, harsh and punitive.
With 5 jobseekers chasing each job, how DWP implements the system will be hugely important. There will be much stronger ‘conditionality’ – the new word for punishment – but “conditionality will be responsive to an individual’s circumstances.” As the housing benefit system has been bedevilled by the complexity of handling changes in circumstance, how can the new system become more responsive? The answer unfortunately relies on IT. UC “will be calculated and delivered electronically, automatically adjusting credit payments according to monthly income reported through an upgraded version of the ….. tax system”. I believe this is the same system that has delivered millions of incorrect tax calculations and hundreds of thousands of incorrect tax credits. The test will be how DWP responds to many thousands of calls challenging their calculations and the many real errors that will be made.
The proposal has ambitions that many will agree with – simplicity, the integration of out-of-work and in-work support – but also many dangers and risks for the poorest people in society. And I have a particular fear about administrative chaos. We may not be able to start evaluating those risks properly until the Welfare Reform Bill is published in January.
Quotations from the White Paper, which can be found here:
http://www.dwp.gov.uk/policy/welfare-reform/legislation-and-key-documents/universal-credit/