Ian Duncan Smith shouldn’t rise to the bait to live off £53 for a week

The Welfare Secretary, Ian Duncan Smith, the architect of many of the changes in welfare provision, has been challenged on whether he would be able to live on £53 per week. He said that if he had to, he would. An online petition has been launched calling him to do just that for a year. At the time of writing, the petition had attracted almost 70,000 signatures. This is very clever campaigning.

But I actually hate gimmicks like this, asking someone who is well off (and IDS is not short of a bob or two) to pretend to be poor for a short time. Michael Portillo lived in a council flat for a week, and countless people do sleep outs each year. But all the while they know they can always go home if it gets too much for them.

The reality for poor people is not the impact of surviving on low wages, or on Employment and Support Allowance of just £71.70 (or £56.80 if you are under 25) for just one week. It is the week in, week out grind of trying to make ends meet. Most people on the lowest incomes are expert at budgeting, stretching their meagre resources, sometimes doing without. But they really struggle when something unexpected happens, a fridge or washing machine breaking down, new shoes needed, or an unexpectedly high gas or electricity bill.

It is in these circumstances that they approach payday lenders or loan sharks, starting a downward spiral of debt and desperation. They can’t return to a comfortable life after playing with poverty for a night or for a week.

So please, Mr Duncan Smith, avoid the temptation to participate in this gimmick.

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.

Will 2013 and the introduction of Universal Credit see an improvement or worsening in arrears, bad debts and evictions?

 

One of the biggest challenges for all providers of rented accommodation, either in the social or private sectors, will be the impact of further welfare reform, in particular the introduction of Universal Credit and payments direct to tenants.  For tenants, there will be an increase in their responsibilities and consequences for not getting it right.

A new YouGov survey published today by Shelter has estimated that 1.4 million Britons are falling behind with the rent or mortgage payments.  The number of people struggling to pay their rent or mortgage each month has increased by 44% over the past year, to 7.8 million people.  The research also reveals that over the past year:

• almost a million people used a payday loan to help pay their rent or mortgage
• 2.8 million people used an unauthorised overdraft to help pay their rent or mortgage, and of those 10% did so every month.

There is a wide political consensus on the need for welfare reform.  Many of the objectives of Universal Credit are laudable, not least the implementation of the system and the ambition that work should always pay.  I have a particular concern: that the implementation on the ground will result in problems for claimants and landlords alike.  There have been warnings that the systems necessary will not be in place nor robust enough.  The pilots on payments to tenants have not been encouraging and there have been worrying increases in arrears.

The government, MP’s and the DWP have had sufficient warnings about the state of readiness.  Reassurances have been given at each turn.  I hope they are right.  However, I know from BHT’s own research, the expectation that claims be made online are a long way from reality in spite of work being done with social housing tenants.  Only a few of us are doing much for tenants in the private rented sector who are particularly vulnerable.

The consequences of significant problems in the implementation of Universal Credit, to claimants and landlords alike, are grim.  Tenants will get into arrears and face eviction. An increase in arrears and bad debts, will see some associations failing.  Housing associations have been reviewing their risk maps, with welfare reform now at the top of their risk registers.  Private landlords will become even more reluctant than they are at present to offer tenancies to claimants.

The Shelter / YouGov survey shows the situation before the impact of welfare reform.  I hope that in a years time the simplified system will see an improvement in arrears and evictions.  Sadly I think the situation will have only worsened.  I sincerely hope to be proved wrong.

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.

The Big Interview (Argus 10th November 2012)

On Saturday, November 10th, the Brighton Argus carried an interview with me.  The focus was housing in Brighton. Unfortunately, the Big Interview (as the weekly item is called) is not posted online.  So here is the text of the interview:

What are the main housing challenges faced by Brighton and Hove?

Simply, there’s a shortage of supply to meet the ever-increasing demand for housing.  The rising cost of the housing that is available is making it increasingly difficult for people to meet their housing costs. The increasing demand for homes in the City is partly due to the increasing number of single person households, and partly due to more people are moving here.

Brighton has a low wage economy.  Those jobs that are available, often in the service and retail sectors, are subject to enormous competition.  It is not uncommon that graduates from our two universities end up in non-graduate jobs in order to remain in the City.

While people joke that this has led to us having the most qualified baristas in the country, the harsh reality is that this trend excludes less qualified, local staff out of the jobs market. Low wages, coupled with high housing costs, is not a healthy mix if we want to live in a City at ease with itself.

Do we face any pressures that other areas don’t?

Brighton and Hove is sea- and land-locked.  There are relatively few sites on which to build new homes.  It has a thriving economy and is an attractive place to live and work.  The challenge for the City is its ability to accommodate the businesses that will provide jobs, and the homes for people to live in.

I really hope that we get the balance right between jobs and homes.  I would hate to see Brighton become a dormitory town, with most residents commuting to jobs elsewhere.  If I wanted to live in a town like that I would move to Worthing!

I would support the building of housing between Falmer and Woodingdean, but that is unlikely to be agreed.  So if we can’t go south and cannot encroach on the National Park, the only way, as Yazz sang in the 1980’s, is up!  We need a debate on the number of high rise developments that the City needs.

Unfortunately, the debate on tall buildings has been skewed by the controversies surrounding the ‘Roaring Forties’ tower in the Marina and the King Alfred proposals.

Where we have a real advantage over other areas is the range and effectiveness of support services.  Where elsewhere in the country such services are being decimated, in Brighton and Hove, with all party support, most have been protected, and homelessness has been prevented.

What part do you and Brighton Housing Trust play in addressing these issues?

One of the most important things we do is to prevent homelessness.  Last year, because of our work, mainly through our Advice Centre in Queen’s Road, we helped 4,116 households from becoming homeless.

Unfortunately, because of changes to the Legal Aid system, from next April, we will be able to help fewer people unless we can attract funding from new sources.  The visible consequence will be more people living on the streets.

In addition to preventing homelessness, we do a lot of work addressing those issues that may have led people to homelessness. We help people to prepare for housing – what it takes to be a good tenant, how to work with, not against, landlords, and how to increase the housing opportunities available to people.

We provide relatively few homes but the work we do in preventing homelessness and finding practical solutions for people in housing need means that BHT’s contribution to resolving issues relating to housing demand is far greater than our modest size.

What would you most want to see happen to tackle these challenges? Can local or national Government help?

In Brighton and Hove, local government could help by agreeing to build 750 homes at Toads Hole Valley.  Perhaps more homes should be considered on this site, a thousand or fifteen hundred, but I doubt there would be support for that.

The government should invest in truly affordable social housing.  The campaign group, Homes for Britain, says that every £1 spent on housing puts £3 into the economy.  And for every £1 spent on construction, government gets 56p back in reduced welfare payments.

Over the lifetime of this government, £35 billion will be spent of housing benefit, yet just £4.5 billion is being spent on building.  It is economic madness.

The right to buy doesn’t help.  Over the last 25 years housing has moved from being affordable and available to meet local demand, to being available only at unaffordable rents.  I heard the other day about a former council house, once with a rent of £120 per week, now being let out privately for £750 per week.

Are more people coming to you in crisis now than in the past and is that down to the recession or other factors? i.e. are economic circumstances driving people onto the streets?

Over the last two years we have seen a sharp increase in the number of people sleeping on the streets in Brighton.  That appears to have steadied over the last year partly due to excellent work being undertaken by Brighton and Hove City Council, CRI, Sussex Central YMCA, BHT and others.

I am amazed at the resourcefulness and sacrifices people make in order to keep themselves and their families in one piece.  We regularly come across single people, holding down jobs, but living in cars because they can’t afford housing.  Parents, usually women, are going without food, to ensure that their children have what they need or to heat their homes.

The latest increases in fuel charges might well push some households over the edge, and there is plenty more bad news yet to come.

So do you foresee the situation getting worse in the immediate future? What is your worst fear? What is your best hope?

The introduction of Universal Credit from next year, changes to the Social Fund and further restrictions on housing benefit, will likely result in more people getting into difficulty.

The plan with Universal Credit is to merge into one payment most of the benefits received by a household.  Universal Credit will be paid monthly, leading to new challenges for households to stretch the cash throughout a longer period.  It will also incorporate housing benefit payments.  This could lead to an increase in rent arrears resulting in losses for landlords and an increase in evictions.

The Department of Works and Pensions expects 80% of claims to be made online.  At BHT we have carried out our own research and have found that 71% of our clients appear to have the means and support to make claims online.  But when you take away the facilities and support BHT provides, that number falls to just 19%, similar to the assessment the DWP itself has made.

My biggest fear is that more people will fall foul of the new welfare regime and will lose their benefit entitlement, sometimes for prolonged periods.  This will result in three H’s: hardship, hypothermia and hunger.

The challenge for charities like BHT is how we can find a twenty first century solution to poverty.  Food banks are already doing a roaring trade. I fear we will soon see the opening of food kitchens.  A depressing note on which to finish.

The work of BHT’s Advice Centre: preventing homelessness, reducing inequality, community cohesion

This morning I reviewed the impact made by BHT’s Advice Centre in Brighton. Here are some basic statistics. I would ask you to reflect on the difference we make to the City and the consequences should this service close:

• 35% clients belong to a BME group
• 42% clients have either a disability, addiction or suffers from mental or physical ill health
• 55% of housing clients are in “priority need” and so the possible responsibility of the City Council.

Positive Outcomes (expressed as a percent) of Cases Closed during 2011/12

• Housing Advice 88% (This includes homeless prevention, conditions improved, accommodation found, better able to manage affairs)
• Housing court duty 85% (This includes homelessness prevented through stopping a possession order or execution of bailiff’s warrant)
• Accommodation Advice and Assistance 60% (This includes Homelessness prevention, PRS Accommodation found or sustained. These statistics are based on tracking 317 clients over 12 months).
• Welfare Benefits 95% (This includes clients who received increased or backdated benefit, and who are now better abled to manage their affairs)
• Debt 87% (This includes debts negotiated to an affordable plan, client better able to manage debt, debt reduced/written off etc.)
• Immigration 78% (This includes being granted Leave to Remain, refugee status, citizenship, family reunion etc. and includes 63% of appeals won)

Our legal services directly contributes to City strategies on:

• Prevention of homelessness and rough sleeping by reducing the numbers in temporary accommodation.  In 2011/12 homelessness was prevented or accommodation found in 1,531 of cases above. A 70% homelessness prevention rate.
• Reducing Inequality through helping to lift clients out of poverty (often suffering multiple problems, for example mental health, addictions, offenders, street homelessness, anti-social behaviour, poverty)
• Community cohesion through immigration advice helping families achieve stability and live together

Does size matter when it comes to Twitter?

@SallyBercow recently tweeted to her fifty thousand followers a link to a post of my blog. Those close to me will know how chuffed I was because in an hour or so I had more hits than I usually have in a month. The post was about the speech the Prime Minister made regarding the possible removal of housing benefit for those under 25.

It coincided with a workshop I ran on Twitter within BHT. We were looking at how BHT can increase its influence through Twitter. In preparation for this we began monitoring the number of followers the 20 or so BHT tweeters have.

Three of my colleagues saw a 50% increase in their followers over a 3 week period:

• @LizDaviesBHT had an 88% increase. Liz is really worth following as she tweets and retweets a range of really interesting things;
• @BowlerHelen had a 76% increase. Helen is an inspirational tutor in our Hastings Finding Futures Project and uses Twitter to celebrate the achievements of her learners, young men and women who many had written off;
• @BHTAdvice had a 52% increase. This account highlights what is happening in the advice world and anyone concerned about changes to welfare benefits and cuts to legal aid should follow this account.

But in preparing for the workshop I came to realise that size doesn’t matter when it comes to Twitter. It is the quality of the followers that counts. Christine Lagarde, the head of the International Monetary Fund, follows just 5 people. If you are an economist and you are followed by her, you will have been noticed at the highest level.

It can be very flattering to be followed by several hundred or even several thousand people. But if each of them, in turn, follow several thousand people, the chances are that you are not being followed at all. I can’t imagine that two of my ‘followers’ @SallyBercow (following 3,951 people) even notices my musings on @SussexCCC nor @campbellclaret (following 5,071 people) on my fascination with southern hemisphere rugby.

It has been said that it is possible to effectively follow a maximum of 150 people on Twitter. In this respect, size DOES matter. I know that I often just skim through my Twitter feed, focusing on just a minority of those on whose tweets I pause.

In considering whether you are being successful on Twitter, do the following simple exercise: decide who are the people you most want to be engaged with on Twitter. It might by 5, 50 or 500 people. Are they following you? If they are, great, if not you are probably not being effective on Twitter. A colleague of mine who deals with the media has a list of around 12, all journalists. She doesn’t need many more followers.

What is of equal important is that she is following anyone who has an interest in the work of @BHT_Sussex and the issues impacting on our clients. Most activity on Twitter, or blogs for that matter, is reading and reflecting. If you spend at least 95% of your time reading and reflecting, you may almost be getting the right balance.

Anyone who just uses Twitter to promote their own ‘fascinating’ version of the world will not attract, nor keep, followers.

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.

Can we afford welfare and housing?

Next Saturday (19^th May 2012) I am speaking at a Brighton Fringe event being organised by the Labour Representation Committee on the theme ‘We can afford Welfare and Housing’.

I am slightly in awe of others on the panel, not least Kevin Maguire (Daily Mirror associate editor & New Statesman columnist) and Teresa Pearce MP who sits on the House of Commons Work & Pensions Select Committee.

Of course, as the seventh richest country in the world, the UK can afford welfare and housing.  An alternate view is that the UK cannot afford not to afford welfare and housing.  Social coherence depends on it, and the reputation of the UK as a civilised country would be, perhaps is being, undermined by an ever increasing number of men and women sleeping on our streets.

In Brighton and Hove we have seen the number of rough sleepers increase from 14 in November 2010 to almost 40 a year later, and now there is a consensus that the number is in excess of 70.

The reality is 70% of the cuts already agreed have yet to bite.  And one of the key safety nets, the availability of legal aid, is being eroded.

The post-war consensus on the Welfare State is being challenged; indeed, it could be argued that it has been destroyed. A new settlement is required that looks at how state-subsidised welfare and housing is provided, and what impact it should have.

In the 1980’s, the subsidy provided to social housing was moved from the subsidy of bricks and mortar to subsiding rents.  That shift is being accelerated by increasing the subsidy provided to those buying their council houses.  Such subsidy does not add value; rather it moves public money into private hands.  That way the affordability of social housing is undermined.

Future discussions should be based on an understanding that welfare and housing can be afforded.  The tough discussion is how that subsidy can best be used.

It is not just those on Housing Benefit who will lose out from benefit reform

From the beginning of January, single people under the age of 35 will be entitled to housing benefit equivalent to that charged for an average room in a shared house. Around 700 individuals in Brighton and Hove will be affected by this.  Some will be exempted if they have experienced rough sleeping and have lived in a hostel in the past, or if a limited number of other circumstances apply to them. Until December 2011, this rule applied to those under 25 years of age.

It is not just single people under the age of 35 who will be impacted by changes to housing benefit, so too will others with the range of changes being introduced. I’ve heard it estimated that £9.6 million will be lost to the City due to the under 35 rule and other housing benefit changes.

So if you think that this only impacts on a few individuals, think about the landlords, the contractors, the shopkeepers, and others who will indirectly feel the impact of this loss to the City’s economy.

Assurances have been given that discretionary payments are available to people in the City who are experiencing hardship as a result of these changes. That is absolutely correct, and the amount available has increased by 100%, from £300,000 to £600,000 per annum. That still leaves a shortfall of £9 million…..