Biggest change in welfare provision since creation of the welfare state

April sees the biggest change in welfare provision since the creation of the welfare state. The aim is to simplify the benefit system, to replicate work conditions (monthly payments), and ensure that work always pays. I can support these aims but, as with much of what government (of any party) tries to do, there is likely to be problems with implementation and unexpected consequences.

The changes include:

• Universal Credit replacing Jobseekers’ Allowance, Employment and Support Allowance, Income Support, Housing Benefit, Working Tax Credit, Child Tax Credit
• Personal Independence Payments will replace Disability Living Allowance
• Council Tax Benefit going and those under Pension Credit age will probably have to pay around £2 per week
• Benefits Cap of £500 per week
• Changes to Social Fund
• Child Benefit reduced if one parent earns more than £50,000 and stopped over £60,000

Any new system has the potential to cause confusion. There is an expectation that 80% of claims will be made online (although research suggests that the majority of claimants don’t have the means to do so)..

Payments will be in one monthly lump sum, raising challenges with budgeting for some claimants.

Landlords are expecting a huge increase in arrears and bad debts. This will result in increased evictions and homelessness. At BHT we have modelled the prospect of losing £95,000 as a direct consequence of these changes.

And finally, there is the Under-occupation regulation, called by some as the Bedroom Tax. It is not, in fact, a tax, but a claw back of benefit for those who have a ‘spare’ bedroom. This has recently attracted much controversy and changes have been made, although there remains serious concerns about the practicality of households downsizing, not least because of the shortage of suitable alternative accommodation and the disruption to lives, including those with disabilities.

In the next few days I will posts more details of the changes.

The case for advice, and the case for investment in advice services

One of the unfortunate aspects of politics over the last 20 years has been ‘Government by Anecdote’ where a handful of extreme cases are used to justify fundamental changes to the welfare state. For example, we have heard a great deal in recent months regarding people on housing benefit claim over £100,000 per annum. In reality, this has happened on just three occasions. I would agree that this is three cases too many. Unfortunately, such anecdotes are used to justify the wholesale changes to housing benefit provision currently being introduced.

Similar stories have been told regarding ‘fat cat’ lawyers getting rich on legal aid. The reality is that most legal aid practitioners work for far less than they could earn if they were in private practice. So why do they do it?

People sometimes have complex problems and sometimes they need technical and practical assistance to give them breathing space to get on with their lives. Such technical and practical assistance often comes from legal aid practitioners. They do it because it is the right thing to do, not because of the money.

If this specialist advice was to be lost, more individuals would flounder, with consequences for their health, their mental well-being, their homes, and their families. For society, the financial costs can be enormous. The cost of legal aid is small by comparison.

I believe Parliament has been short-sighted in deciding to restrict the availability of legal aid. But we are where we are. Legal aid is being restricted, saving the Treasury just £450 million a year. This saving may well be exceeded by the fall out of not ensuring that people are properly advised and represented.

One consequence of changes to legal aid provision is to put in jeopardy independent advice centres up and down the country. Shelter, for example, has recently announced that it will be closing eight of its legal aid centres.

BHT’s own legal aid centres in Brighton, Eastbourne and Hastings have an uncertain future. Our legal aid funding is likely to be reduced by about 40%, thereby undermining the financial viability of these services. Already they run at a loss of over £200,000 each year.

One of the tough decisions for local councils is to decide whether to fund such services. Everyone knows that local government is having to make huge savings from their own budgets. To expect them not merely to maintain their investment in advice services but to increase it might appear, on the surface, to be unreasonable.

Yet there is a strong case for increased investment. Take BHT’s Brighton Advice Centre. It advises and represents 4,500 residents of Brighton and Hove each year and prevents 2,500 households from becoming homeless.

BHT does its part.  We bring into the City over a £1 million from the Legal Services Commission, Big Lottery funding and funding for work in the private rented sector.

So what does Brighton and Hove get from this investment? First and foremost it ensures that its residents have a first rate legal aid centre so that those who might otherwise flounder, who need breathing space, can have their complex problems dealt with through specialist advice and representation.

Using the concept of the ‘Local Multiplier’, the £1.5 million cost of our Brighton legal services is worth over £4 million to the local economy. The Local Multiplier has it that investment in jobs within the local economy sees that investment recycled within that economy to the factor of up to 3 times.

All of this leads me to say how delighted I am that the draft budget for the City Council is seeking to invest in advice services provided by BHT and others.  This is a matter above party politics and I hope that there will be all-party support for this part of the council’s budget.

Housing Benefit and Under 25’s

In a speech later today, the Prime Minister will say that he is considering removing housing benefit from those under-25s.  This appears to be one of the most ill-thought through, headline grabbing policy announcements that I can recall.

There are some questions that demand answers:

• How can parents be obliged to take their adult children back into the home, and what happens to those young people where they can’t ‘go home’?
• What protection will there be for children and young people who have left their family home to avoid abuse and domestic violence?
• What happens in those cases where the parents have “done the right thing” by moving to smaller houses once their children have move out and there is now no spare room?
• What happens if there is no room in the parent’s home for other reasons, such as second families with children?

I have to ask why David Cameron is bringing this proposal forward now?  We are already witnessing the most profound changes to the benefit system in my lifetime.  If this is such a pressing issue, why was it not identified and enacted when all the other changes were introduced?

The BBC’s political correspondent, Vicki Young, has suggested that Mr Cameron’s speech will be seen as an attempt to reconnect with disgruntled Tory backbenchers.  I don’t know if that is true, but if there is even a hint of reality in her analysis, it ill becomes a Prime Minister to risk a huge rise in youth homelessness for internal party expediency.

This isn’t the pressing problem it is being made out to be. Those under 35 living in the private rented sector are entitled to just £77 housing benefit per week. Just 6% of those under 25 living in the private rented sector currently receive housing benefit.

92% of new claims for housing benefit are from those in work.  They are already “doing the right thing” but this measure will hit young people already in jobs.

The consequence of this proposal will be an increase in overcrowding, homelessness, begging, crime, and prostitution.

Real Life Stories from BHT’s Crisis Response and Support Services

This is the fifth in a series of contributions from BHT clients.  This post has two contributions from clients of our Response Services that comprise three separate and distinct services – Crisis Response Service, BHT Rough Sleepers’ Initiative and Support Response Service. All are funded through Housing Related Support (SP).

The first is a thank you letter received from a client:

“I really would like to say ‘Thank You’, for all of the help that you have provided me with. It’s been quite a stressful period, being evicted and becoming homeless and I know that without your help … I would not have dealt with the problem very well at all; I do fully appreciate everything that you have done for me and continue to do with your team at BHT, and, also, appreciate that without your help I would certainly have become street homeless. There’s no way that I can repay any of you for all the help that you have given, but I really do want you to know that you have been an essential part of overcoming my housing problems and needs and that I am so very grateful. So, thank you, so much, again”.

The second is an account of an 83 year old.  It shouldn’t but I am still taken aback when I hear of someone of this age in dire need:

C came back to the UK from the Canary Islands aged 83 and partially sighted to be near her family, after having sold her house to pay for medical bills when her son became ill and had no insurance. Any money she had left was then stolen by her grandson, who was addicted to heroin, and had gained access to her bank account. This left her with no money and she was not allowed to claim benefits initially because she had none of the necessary proofs, particularly where the money from the sale of her house had gone. She ended up sofa-surfing and sometimes sleeping on a camp bed at her sister’s. The Council found her a privately rented flat but hadn’t realised there were issues regarding her access to benefits.  We worked with her to prove that she had not spent or hidden the money herself and made the case to Housing Benefit and the Pensions Service so that she could eventually get her rent paid and have money to live on. We also kept the landlord informed about what was happening and arranged for the rent to be paid directly to the landlord when she got it. She is still waiting to hear about a grant for some furniture, but has been given essential items by members of her family.”

Real Life Stories: Sue’s Story

This is the second in a series of Real Life Stories, the experiences of BHT clients in their own words:

“I am at last writing to you to inform you of how Homeworks has helped me over the past 18 months.

“In September, 2010 I experienced a period of severe clinical depression which necessitated me leaving my job, and therefore the accommodation that was tied to that job. I had minimal input from the Mental Health Teams despite two suicide attempts in a week, but I was given a Homeworks leaflet.

“On contacting Homeworks, I met Mandy, who instantly facilitated looking into my options. She linked me in with Housing Benefit and Employment Support Allowance, which was something I had absolutely no prior experience or knowledge of.

“I quickly moved in with relatives, after my landlady staged a break-in at the cottage I was soon to vacate, in order to encourage me to move out quicker than the four week notice period. I eventually moved in with my Mother, with my 2 children, to a rented house in Eastbourne and thanks to Mandy’s advice added my name to the tenancy which then permitted me to claim Housing Benefit, facilitating a level of independence. She also suggested applying for Disability Living Allowance, which was granted. I used the first payment, which was back-dated to September, to pay for a week’s respite at Forresters in Southampton, again Mandy’s idea, which was a really useful break.

“Mandy helped me to navigate the Mental Health Teams, which was something I just could not manage, and liaised between the acute and community services, which at that time did not appear to communicate, in order to find out where I was on the list for Cognitive Behavioural Therapy, and which list I was on; a list I had been added to at least a year earlier before I became acutely unwell.

“I saw Mandy weekly and provided a huge amount of emotional and practical support. She sorted out all my Benefit applications, which was further complicated by divorce proceedings and imminent sale of my part of the marital home. We used the Eastbourne Advice Centre on a number of occasions to clarify matters relating to Benefits. I would not have been capable of any of this without Mandy’s help and support.

“At this time Mandy also supported me through making a complaint to the NHS regarding the lack of mental health care I was experiencing. Having written to the NHS Trust and getting no reply, I eventually wrote to my MP, Norman Baker, detailing my experiences, who contacted the Trust on my behalf. Mandy and myself subsequently attended two meetings, one with an Acute Services Manager and one with the ‘Adult Mental Health Recovery Team’ Manager, and ultimately received a written unreserved apology from the Trust.

“Since contacting my M.P. the care I have received has been good, with regular support from a Clinical Psychologist for several months, followed by a course of Cognitive Behavioural Therapy, and regular follow up with a Consultant Psychiatrist.

“Again, Mandy’s support was instrumental in pushing to get the mental health support I needed, and which was not forth-coming until I complained. She helped me to stay calm enough to get my point across when I was finding everything very difficult.

“In March 2011, my Mother needed to move on and I became homeless. Mandy supported me through submitting a Homeless Application, which was accepted by Lewes District Council. I moved to a series of Bed and Breakfast accommodation, to Seaford for a weekend, to Jevington Gardens, Eastbourne for a couple of months, then to Hanson Road, Newhaven, for three months. Mandy supported me through all these moves, which were stressful, unsettling, expensive and a bureaucratic ordeal, as each move required a new Housing Benefit application, requiring new evidence etc. At Hanson Road, I managed to persuade the Council to allow my 2 cats to be returned to me, by supplying a “cat reference” and supporting letter from my GP, which again were Mandy’s ideas.

“At each step Mandy’s gentle insistence that all the options be looked at, gave me the feeling that I could make the decisions regarding my future, which was very difficult due to my mental health problems at the time. She facilitated my independence when I felt very low and unable to mentally juggle all the issues that were immersing me.

“In October 2011, I moved to a three-bed house in Newhaven, and am currently on a starter tenancy, with the full likelihood of going on to a secure tenancy. I have a house that suits my family’s needs, is affordable, and close to my children’s school in Seaford. Mandy’s support at every step of the way has enabled me to get to a point where I am again living independently and in receipt of Benefits that are enabling me to recover from my mental health problems.

“I cannot thank Mandy and Homeworks enough for the help and support that I received during a very difficult time. Without that help, I have no idea where I would be.”

The rising dependency on housing benefit by those in work

One of the remarkable things of an analysis of new housing benefit claimants between January 2010 in December 2011 was that 93% of new housing benefit claims were made by households containing at least one employed adults.

There are now 4.95 million housing benefit claimants in the UK (excluding Northern Ireland). In the 24 months from January 2010 they were almost 300,000 extra claimants of which 279,000 were employed.

The Welfare Reform Act that was passed into law in March is designed to shave £2.25 billion a year of the £22.4 billion housing benefit bill by 2014/15. The Chancellor has also announced that a further £10 billion of further welfare savings required by 2016.

The report by the research group the Building and Social Housing Foundation entitled The growth of in-work housing benefit claimants reported: “This increase appears to be a departure from historic trends where the number of housing benefit claimants was closely associated with levels of employment”. The BSHF also suggested that wage reductions and higher rents were possible reasons for the increase.

It comes as no surprise to me that, with the freeze and reduction in income levels of those in work and the spiralling cost of housing particularly in areas such as Brighton and Hove, more people will rely on housing benefit just to make ends meet.

My concern is where the additional £10 billion savings will come from.

A warning on housing benefit from 10 years ago

In today’s Brighton Argus, there is an item looking at what that paper was saying ten years ago. ‘On this day’ recalled that 10 years ago the Argus gave a warning that Brighton and Hove could “become a haven reserved for the wealthy unless housing benefit was increased”.

It highlighted the warnings given by Brighton Housing Trust and others that “changes to housing benefit were urgently needed to avoid social exclusion and reduce homelessness in the city”.

What was said then is equally true today. Changes to housing benefit entitlement implemented from last week will see 5,800 homes become unaffordable to men and women on housing benefit in Brighton and Hove. That means that there will be just 13,000 homes available to rent for the 13,700 claimants in the City.

What BHT said on 9th January 2002 is worth repeating today: changes to housing benefit are urgently needed to avoid social exclusion and prevent homelessness in the city.

There has been the tiniest bit of good news about legal aid cuts, but the uncertainty continues

Whenever I have a chance, on radio or television, or in articles in local papers, I refer to The creation of a ‘perfect storm’ that will lead to a massive rise in homelessness next year. Amongst the factors that will have a negative impact in areas such as Brighton & Hove, Eastbourne, Hastings, Worthing and Littlehampton, to mention just a few areas on the coastal south east, are:
Cuts to housing benefit
Reduction in access to advice and representation as a result of cuts to the legal aid budget
Spiralling costs of private sector rents
Greater competition for whatever social housing is available
Displacement from London of homeless people as the streets are ‘cleaned up’ in preparation for the Olympic Games.

This week there has been a little, just a little, bit of good news. It has been announced that the changes in legal aid funding have been put off for six months, from an original implementation date of October 2012 to April 2013. The 10% cut in the value of funding from October 1st 2011 remains, and we continue to feel the impact of that.

At BHT we subsidise our advice services by over £100,000 each year, funding which gets harder and harder to raise.

The downsize of this delay is that uncertainty about the future continues for BHT as an organisation and for our dedicated and highly skilled staff team.

I am frequently asked what the legal aid measures are. This week’s edition of Inside Housing has a very helpful ‘low down’ which I repeat here:

“The government plans to cut the £2.1 billion annual legal aid budget by £350 million annually

“Fees solicitors can claim for legal aid in civil cases were cut by 10% in October
Advice will only be available in cases in which households could be, or have been, made homeless or where serious disrepair is threatening health

“Legal aid for debt advice will only be available when a tenant’s home is at ‘immediate threat’

” Struggling tenants may also be hit by cuts to legal aid and in other cases, such as … appeals against welfare benefit cuts …”

I recently had the privilege of listening to a 61 year old client of our Brighton Advice Centre talk about the misery she had experienced because of the actions of seven different debt collection agencies. Our debt advisor’s knowledge of the law (gained after many years of practice including a period working for a debt collection agency itself!) was able to demonstrate that the original debt of £1,000 – now inflated to over £6,000 because of ‘fees, charges and penalties’ – was not, in fact, owed.

Our client is now able to sleep at night, answer her phone and door, and is beginning to enjoy life again after several years of suffering. How can you put a price on that?

Transition Housing: an answer to homelessness in Brighton & Hove?

When I first came to England in 1979 my first home was a room in a shared house. This is not uncommon for many in Brighton and Hove, not least our student population. It will become more common as housing benefit changes restrict anyone under the age of 35 to benefit levels equivalent to a room in a shared house. Coming into force on January 1^st, the change will see 820 men and women now competing for shared housing, creating greater competition for families looking for homes.

A few years later, having moved into other shared housing, I secured a tenancy for a bedsit with my own kitchenette and bathroom and my own front door. It felt like a palace. In reality the total floor space was less than my office at BHT, but it was mine.

I was a good tenant, paid my rent on time, didn’t disturb my neighbours, and helped keep the common ways clean and tidy. I got to know my landlord and a year or so later when a two bedroom flat in the same block became available, I was offered the tenancy. It was my home for the next seven years.

I was also able to make a recommendation to my landlord about who should be offered the tenancy of the tiny bedsit. I nominated someone who is amongst my oldest friends and for the past 26 years my colleague at BHT, John Holmström.

And it is to John that BHT owes many of its best ideas. It was his vision that saw the transformation of the Phase 1 Project that had previously been the Regency House Hotel, one of the most run-down, flea and rat-infested hovels inBrighton. John brokered the partnership that brought in the money and expertise to make the vision a reality.

John also came up with a solution to the lack of accommodation for men and women in psychiatric hospitals. He saw the opportunity to bring together private sector housing, health services and welfare benefits, and from his understanding the award-winning Route 1 Project was created. It now forms an invaluable part of the strategy for housing solutions for those with mental health problems.

John has now coined the phrase “Transition Housing” to encapsulate an idea to resolve the tensions between housing availability, affordability, standards, density, lack of land supply and financially viable developments. The immediate challenge is to have a conversation in the City to achieve consensus around his vision.

He explained the concept: “At the heart we need to come to terms with single people having to live more densely so we can free up as much space for family housing as possible. For this we have to be smarter about how successful denser living can be achieved. If we have less private space for example, we need to look at how communal spaces can be better used.

“For those without a study area for a computer we need to ensure better and greater use of libraries, schools and other community spaces. Rather than everybody having their own washing machine, we need shared laundry facilities in blocks of flats.  Such lifestyle adjustments will also help residents be more environmentally friendly.

“Where space is too small to have overnight visitors, we would need a spare guest flat that could be used for occasional visitors.”

John said to me that he knows that “there will be a million and one questions” but that should not hold us back from doing something imaginative, something bold, something “very Brighton” to address one of the obvious and immediate needs in the City.

I believe John has come up with something very exciting that must be taken forward.  In the very near future I hope to see Transition Housing become a widely endorsed concept. And if you don’t like the name, could I suggest ‘Holmström Housing’?

The usual and the not-so-usual suspects

Sometimes I feel that those of us who are seen to be making dire predictions about the impact of government policy are dismissed as being the ‘usual suspects’. “Of course he would say that, wouldn’t he”, I suspect people say, or at least think. I know that I have not been silent on the impact of changes to housing benefit.

So when you see the prediction that reform of housing benefit is likely to result in 40,000 households losing their homes and potentially becoming homeless, it might be dismissed as alarmist. If this forecast includes a warning that the £270 million savings in housing benefit would probably be offset by increased spending to tackle homelessness, some might say, “there he goes again”.

But these dire predictions are not coming from Shelter, Crisis, BHT, or any of the other ‘usual suspects’. They come from officials at the Department of Communities and Local Government in a letter to the office of the Prime Minister. The DCLG is responsible for government housing policy and strategy and don’t make forecasts like this lightly.

As I have said on many occasions before, the changes to housing benefit entitlement, combined with an increased pressure on the private rented sector, and reforms to legal aid, a ‘perfect storm’ is being created that will see many people ending up homeless including living on the streets, having to move back in with parents or sofa-surf with family and friends.

It is not too late for the government to turn back from this folly. The consequences otherwise for too many men and women and children is appalling.