Housing Benefit and Supported Housing

Clive Betts Excerpts

Wednesday 27th January 2016 Commons Chamber

[John Healey]

I thank my hon. Friend and applaud his effort to talk to providers in his constituency. The fears that Framework expressed are widely voiced and shared by providers who offer that type of housing and support. I do not know what figures he has for Nottingham, but Homeless Link cites figures in Birmingham that expose the shortfall. The average national rent in a homeless hostel is about £180 per week. The local housing allowance rate in Birmingham is half that figure, at £98.87 a week. The local housing allowance rate for a room in a shared house, which is all that single people under 35 are entitled to, is just £57.34 a week—a shortfall of over £120 per week, per tenant.

Supported housing is not just an emergency bed or a roof over someone’s head; the support helps people to get their lives back together. Last year, 1,500—or two in five—people housed by St Mungo’s in its hostels moved on from supported housing into individual accommodation. Last year, St Vincent’s—the Manchester-based housing charity—saw 15 of its young Foyer residents go on to university, one to Oxford. For thousands of other people with severe autism, learning disabilities, dementia and mental illness, living as independently as possible in supported housing, there is no alternative but hospital and residential care, which are much more institutionalised for the residents and much more expensive for the taxpayer. This policy risks turning the clock back on people’s lives and standards of care by 40 years.

[Mr Clive Betts (Sheffield South East) (Lab)]

My right hon. Friend has illustrated his case by referring to people for whom the alternative may be much more expensive and less adequate care. There are other people, such as women fleeing domestic violence with their children, who come to very good accommodation in my constituency, who will have no alternative at all if those places are closed down as a result of these measures.

[John Healey]

My hon. Friend, who chairs the Select Committee on Communities and Local Government, understands this better perhaps than anyone in the House. There is no alternative to the supported housing needed by many of the most vulnerable people, and which they have at present. That is why Ministers must act immediately to exempt supported housing in full from the crude cuts and undertake a detailed consultation with providers about how such housing can be secured in future. Before Christmas, I revealed the scale of the problems facing people in specialist supported housing.

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[Brandon Lewis]

I give way to the Chair of the Communities and Local Government Committee.

[Mr Betts]

The Minister has rightly recognised the importance of supported and specialist housing. He has now just indicated that the Government will somehow protect people in these circumstances. Can he give any indication of how that will be done and when these measures will be announced, given that housing associations are already having to plan for potential change in 2018 that could lead to the closure of existing accommodation and to new accommodation not being built?

[Brandon Lewis]

The hon. Gentleman has effectively asked me to continue my speech, because I was just about to say, as I am sure he will appreciate, that the underlying principles are the bedrock of this policy formation. He, along with the right hon. Member for Wentworth and Dearne, urges the Government to note the concerns of supported housing providers, so let me reassure all Members of the House that we have of course been listening very carefully to those concerns, and we will continue to do so.

My ministerial colleagues and I have met representatives of the National Housing Federation and chief executives of housing associations that provide supported housing. We have listened very carefully to all these representations and noted everything that we have been told. We know that the costs of supported housing provision are higher than general needs housing and that providers rely on housing benefit funding for support elements such as wardens, security and the up-keep of communal facilities.

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[Mr Clive Betts (Sheffield South East) (Lab)]

We are here today for one of two reasons. Either the Government set out, as a matter of deliberate policy, to bring about the closure of specialist and supported housing—perhaps they are not bothered whether such housing units close—or this is an unintended consequence of a wider policy to change housing benefit that we have to deal with today because the Government did not do a proper impact assessment of the policy right at the beginning. We should have had an impact assessment before we began the process, rather than when concerns were rightly raised up and down the country about the potential impact. I welcome what the Minister has said today. It is right that a proper review will be carried out, and that the Government will not simply carry on with this policy and its potential consequences.

Government Members have said that there has been political point scoring and scaremongering by Opposition Members and the housing association movement. That is not true. When I am rung up by Tony Stacey, the chief executive of South Yorkshire Housing Association, who is widely respected by people on both sides of the House because of the work of his association and his personal commitment, and he says that the impact of these measures will be a £2.8 million reduction in the income of the association, out of a £20 million budget, that is a matter of major concern. That would lead to the closure of about 1,000 supported housing places and, because of the financial impact, the housing association would have to start acting on those closures within the next few months and would not be able to wait until 2018. That is not scaremongering; it is the financial reality for an association that has to balance its books over that period. That is why we are here debating the issue today.

Having welcomed what the Minister said, I have one or two questions. First, he talked about a review by the end of March. When is a conclusion likely to be reached to provide certainty for housing associations and others, including local councils, about the impact of these measures or the changed measures that I hope the Government will bring forward? In conducting the review and coming to a conclusion, will the Government talk not only to the National Housing Federation, which they must rightly talk to, but to the Local Government Association, because council schemes and voluntary schemes are also involved? Will the Minister ensure that all relevant parties are consulted? Will he indicate when conclusions will be reached so that there can be certainty?

Secondly, will the changes for new tenants that are due to be introduced in April 2016 now be postponed, or will new tenancies be created in 2016 on the basis of the changes proposed at present, before the review? I hope the Minister will say that no changes will be introduced, and that the full costs of supported housing will be covered through housing benefit for new tenancies from April 2016 until the review is concluded.

Finally, I also welcome what the Minister said about rent increases for supported housing—that the 1% reduction will not go ahead for next year, while the review is being undertaken. Does that mean that the changes in the Budget will not be implemented, that the 1% reduction will not now happen and that CPI plus 1% will be allowed for next year, or that rents will simply be frozen? There is quite a big difference for associations, because even the rent changes, without the housing benefit changes, have an impact on supported housing. Can we have clarification on that as well?

I welcome the direction of travel that the Government seem to be moving in now, back to a more realistic position. Perhaps the Communities and Local Government Committee will want to have a look at this as well. I hope the Minister will fully consult and take on board the real concerns that the housing association movement and local councils have raised about these measures. None of us wants to see supported housing units closed.

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[Justin Tomlinson]

For new tenants, the change comes into effect in 2016; for existing ones, it will come into effect in 2018. The delay on the 1% is just for supported housing, so I am afraid that I cannot give that commitment.

[Mr Betts]

The question is this: will the Minister defer the change in housing benefit related to LHA for supported housing from April this year so that it does not apply to new tenancies until the review has been completed?

[Justin Tomlinson]

The changes do not come into effect at that point. That is why we said that we will urgently take forward the review based on the points that have been raised.

I can assure Members that DWP and DCLG will work closely together to ensure that the appropriate protections are in place for those in supported housing.

[Mr Betts]

I am sorry, but the changes do come into effect for new tenancies in supported housing from April this year, so will the Minister please defer them?

[Justin Tomlinson]

I have made it clear that, for those in supported housing, the change will be delayed for a year as we conduct the urgent review.

On the rationale for changes in the social rented sector, we will stick to our principles of protecting the most vulnerable. However, these are important reforms. We inherited a burgeoning housing benefits bill that we had to get control of. We have started to do that, but we need to go further. The housing benefit bill for England has risen by over 20% during the past 10 years, as my hon. Friend the Member for Bexhill and Battle (Huw Merriman) said. Part of the reason is that the rises in social rents have outstripped those in the private sector, as highlighted by my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake). Social rents are up by 60% compared with 23% in the private sector. In the private sector, the local housing allowance curbs the spiralling housing benefit bill, but there is no similar restraint in the social sector. That is why we are going to cap social sector rents in the same way as in the private sector, thereby reducing rents in the social sector. We should remember that this will help the one third of people in this sector who do not claim any housing benefit and whose rents will come down. However, we will continue to protect the most vulnerable.

This is just part of our wider housing reforms. We are improving access, creating more choice and building more affordable homes. We are doubling the housing budget to more than £20 billion over the next five years to help to ensure that housing is prioritised for those who need it most.