Housing: Underoccupancy Charge

Lord Freud Excerpts

Tuesday 28th January 2014 Lords Chamber

[Baroness Quin]

To ask Her Majesty’s Government what recent discussions they have had with local authorities about the costs associated with implementing the underoccupancy charge.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)]

Following discussions, we provided £4 million in 2012-13 and a further £7.5 million in 2013-14—£11.5 million in total—to local authorities for the additional costs associated with the implementation of the removal of the spare room subsidy. These figures include both the direct and consequential costs—that is, the costs of notifying claimants, collecting relevant information and changes to IT systems, and other associated costs such as administering additional applications for discretionary housing payments and the provision of housing options advice.

[Baroness Quin (Lab)]

As the Minister knows, local authorities are very much at the sharp end when having to deal with the hardship and distress caused by the bedroom tax. Has the Minister looked at the results of the survey by the Local Government Association released just three days ago? They show that local authorities may well end up picking up many of the costs associated with these welfare reforms, which in turn will be at the expense of other important local services. Will the Minister undertake to look very carefully at the results of this survey, meet local authorities and seek to tackle the problems that have been so clearly identified?

[Lord Freud]

We meet local authorities very regularly. We hold meetings with them both at my level and at official level to make sure that we understand their issues and that we deal with them. Clearly, under the new burdens doctrine we are obligated to pay them any costs associated with administering this policy.

[Lord Geddes (Con)]

Can my noble friend advise the House of the extent of overcrowding in the social sector?

[Lord Freud]

Clearly, one thing about this policy is that it makes properties that are underoccupied available for people who are overcrowded. According to the English housing survey, the figure for overcrowding is about a quarter of a million. Under the 2011 census, the figure was higher, going up to a third of a million—361,000.

[Baroness Hollis of Heigham (Lab)]

My Lords, overcrowding is essentially a London problem, but the local authorities most affected are not London authorities; they are in places such as the north. I am sure that the Minister respects the facts on that and will share his information with the House. Does he agree that the problem that local authorities and housing associations face is that there is an absolute shortage of small accommodation to which people can move? Does he therefore agree that it would only be fair, right and decent if people were sanctioned by the bedroom tax only if they refused an acceptable alternative offer of smaller accommodation?

[Lord Freud]

My Lords, less than half the overcrowding takes place in London. More than 30% of properties are actually one-bedroom and 108,000 have come up. We are adapting to the transition by using the discretionary housing payment system. The recent data on discretionary housing payments show that that is exactly how local authorities are using that money.

[Baroness Sherlock (Lab)]

My Lords, the Minister mentioned discretionary housing payments. The LGA survey says that 81% of authorities said that the number of applications for DHPs had increased greatly between April and November 2013 and that the social sector size criteria topped the list of reasons for this. The LGA has made the point that there are some areas where there is simply not enough accommodation, and therefore the amounts of money the Government have made available are not enough. The tenants are suffering and the local authorities are picking up the tab. Will the Government commit to reviewing this policy and giving local authorities and tenants the help they need?

[Lord Freud]

My Lords, we have a high level of discretionary housing payments, running at £180 million. More importantly, £20 million of that is to be bid for. I have currently had 67 bids and we are paying out. I am not sure whether local authorities will actually be using up all the discretionary housing payment at their disposal. As noble Lords know, a review is going on. I will be able to publicise the interim findings in the spring and the final version will appear next year.

[The Lord Bishop of St Albans]

My Lords, as affordable rental properties in rural areas are in such shortage, will the Government extend the scheme, which currently applies only to the 21 most sparsely populated districts, and allow more local authorities to use discretionary housing payments to help retain more couples and families in their homes?

[Lord Freud]

My Lords, that is exactly what the discretionary housing payment is for. It is for local authorities to take decisions, based on their local knowledge, so that they get the funds to the right people. The emerging signs are that we will not spend all the discretionary housing payments this year. I am, however, making sure that a substantial amount of discretionary housing payment goes out next year, for which the total figure will be £165 million.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, some households with a disabled family member who were allocated a larger property which had been adapted using a disabled facilities grant, are now required to move due to the size criteria changes. Does the Minister think that this is a good use of scarce resources?

[Lord Freud]

One of the fundamental objectives of providing discretionary housing payments is to make sure that where there are significant adaptations in homes for disabled people there will be discretionary housing payments for those people.

[Lord Campbell-Savours (Lab)]

Has the Minister ever stopped to consider the personal distress caused to families who are forced to move because they cannot afford higher rents?

[Lord Freud]

My Lords, we naturally look at these policies with a view to their impact. At a time of very scarce housing, we are under huge pressure to find appropriate homes for people. Everyone takes decisions to move to reflect their circumstances. It is no different in the social sector than elsewhere.