Housing: Underoccupancy Charge

Lord Freud Excerpts

Tuesday 24th June 2014 Lords Chamber

[Baroness Quin]

To ask Her Majesty’s Government when they expect to publish their interim review on the under-occupancy charge.

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

We expect to publish the interim report by the Summer Recess.

[Baroness Quin (Lab)]

I welcome that reply although I note that last October the Minister said that he expected the report to come out in the spring, which has now come and gone. Can he assure me that in the meanwhile, he and his colleagues will be meeting some of the many people who have indicated their willingness to downsize but for whom there is no alternative accommodation and nevertheless end up having to pay a bedroom tax that they cannot afford?

[Lord Freud]

There are some 200,000 smaller premises in the social rented sector available through each year. We are now seeing a good increase in the number of home exchanges. Some systems are going up and the housing partners’ HomeSwapper scheme, for instance, has now had a 25% increase partly because of the effect of this change.

[Baroness Turner of Camden (Lab)]

Is the Minister aware of disputed cases being referred to the Local Government Ombudsman for decisions? If so, have there been any decisions in favour of the claimant as I understand that some people have disputed the charges that have been made under the bedroom tax?

[Lord Freud]

I am not aware of the ombudsman process. The process of which I am aware is when people appeal to the tribunal; there have been more than 100 such cases, which have gone one way or the other—some have gone to appeal and some have been accepted.

[Baroness Gardner of Parkes (Con)]

My Lords, many older people do not want to leave the property in which they have lived for many years, and I have suggested in the past that they should be able to take in a lodger, which would help pay their costs. However, I have been told that many authorities do not allow people to take in lodgers. Is the department aware of that and is anything being done to ensure that people who wish to take in a lodger—many people are looking for accommodation—can do so in order to stay where they are?

[Lord Freud]

We are encouraging people to take in lodgers when appropriate for them. Housing associations and local authorities are looking at that and tend to accept that that is a way of doing it. There is some confusion between strictures against subletting, which is a different matter entirely, but lodging tends to be accepted around the country.

[The Lord Bishop of St Albans]

My Lords, the Ipsos MORI report, undertaken by the National Housing Federation in February this year, looked at 183 housing associations. It found that two-thirds of tenants affected by the underoccupancy charge were in rent arrears and 38% indicated that they were in debt. That is the equivalent of 72,000 tenants in housing associations in debt in England alone, which seems to be allied in some way to the underoccupancy charge. What assessment have Her Majesty’s Government made of the impact on housing associations of rent arrears because of the underoccupancy charge?

[Lord Freud]

We have a general look at the level of arrears through the Homes and Communities Agency, whose statistics show that arrears have fallen—not risen—for the past two quarters in a row. The average rent collection rate for associations remains at 99%, a very high figure, which is very much at variance with some of the stories that we hear and the data that the right reverend Prelate referred to.

[Lord Richard (Lab)]

The noble Lord was asked by my noble friend Lady Quin when the Government expect to publish the interim report. I may have missed it but I did not detect any Answer from the Minister as to when the Government expect to publish the report. Can he tell us why it is so delayed?

[Lord Freud]

My Lords, I must learn how to enunciate better. I will repeat my Answer: we expect to publish the interim report by the Summer Recess.

[Lord Deben (Con)]

My Lords, does my noble friend agree that, if he is going to visit and meet people who have been concerned with this, he will also meet people who have lived in overcrowded conditions for long periods of time because of the underoccupation of homes that ought to have been available for them?

[Lord Freud]

My Lords, that is clearly one of the points of getting a better match for our very scarce housing. There are long waiting lists for social housing and substantial overcrowding. Depending on the data at which you look, there are more than 250,000 overcrowded homes in the social rented sector. On the census basis, that figure rises to 361,000.

[Baroness Howe of Idlicote (CB)]

My Lords, can the Minister tell us whether the interim review will include an assessment of how the underoccupancy charge affects people with conditions such as Parkinson’s, which can involve night terrors and uncontrollable movements that make it completely impractical for their partners to sleep in close proximity?

[Lord Freud]

My Lords, for obvious reasons, I have not seen the report. It will be published but I am not aware of that kind of detail at this stage. Clearly once the report is out we can look at the issues that remain uncovered. There will be a full report, which will be published next year in 2015.

[Baroness Sherlock (Lab)]

My Lords, the Minister has often complained about councils underspending the discretionary funds that mitigate the effect of the bedroom tax. Did he see the report in Inside Housing last week which stated that £7 million of the extra £20 million allocated by the Government last July remains unallocated to councils by the Government? An FoI request showed that 27 councils did not get the money they asked for mostly because the department decided that this would allow them to buy out the effects of the bedroom tax. So people asked for money, were turned down because it would have the effect that was wanted, and then it is claimed that the underspend shows that they did not need any more money in the first place. How can the Minister explain that to the thousands of people affected by the bedroom tax?

[Lord Freud]

My Lords, some of my more sharp-eyed colleagues here will have seen the information we put out on the discretionary housing payments for last year. That showed that there was a £13 million underspend by 240 councils and that of the £20 million bidding fund, £7 million was not spent. The £20 million was not applied for in its entirety. However, we allocated that money on the basis of parity of requirement. There was an extensive process to make sure that we gave the appropriate amounts of money to those councils.

[Lord German (LD)]

My Lords, the Ipsos MORI review, of course, is much awaited, not least by the Master of the Rolls who, in making a judgment in favour of the Government, said that the DWP had informed him that,

“the scheme may need to be modified in the light of experience”.

When the independent review comes out and my noble friend sees it before the Summer Recess, will he agree to act upon it and take decisions to make changes to the scheme so that it fits the experience shown by his independent review?

[Lord Freud]

My Lords, we always look very closely at any research that is done and we will do no differently with this research.