Asked by
To ask His Majesty’s Government what assessment they have made of
the impact of the freeze in local housing allowance rates.
The Parliamentary Under-Secretary of State, Department for Work
and Pensions () (Con)
My Lords, the local housing allowance policy is kept under
regular review. We monitor the average rents and shortfall levels
for claimants to assess the impact of the policy. A significant
support package was announced in the autumn Budget, including
uprating benefits by 10.1% and extending the household support
fund for 2023-24. Further support—discretionary housing
payments—is available, and since 2011, nearly £1.6 billion in
DHPs have been provided to local authorities.
(Lab)
My Lords, according to the Institute for Fiscal Studies, this
further freeze in private rental support means that two-thirds of
lower-income private renters must cover at least a quarter of
their rent from elsewhere. For many, this means a real cut in the
value of inadequate benefits that are supposed to cover basic
needs such as food. Cash-limited local authority discretionary
housing payments are no answer, especially as their budgets have
also been cut. Does the Minister accept that one consequence of
this freeze is likely to be increased homelessness? What is his
advice for those faced with a growing, unaffordable gap between
help with housing costs and actual rents?
(Con)
I absolutely hear the noble Baroness, because we recognise that
rents are increasing—there is certainly lots of anecdotal
evidence of that in the press. However, the challenging fiscal
environment means that difficult decisions were necessary to
ensure that support is targeted effectively. That is why the
Chancellor announced at the Autumn Statement a substantial
package of cost of living support to target the most vulnerable
households. As I mentioned earlier, one of the initiatives for
those who require additional support is the discretionary housing
payments available from local authorities, which are best able to
target those funds.
(LD)
My Lords, the overall level of housing benefit indeed remains a
difficult political decision. However, does the Minister agree
that it is the way the current local housing allowance system is
structured that produces such an arbitrary and unfair system,
particularly for private sector renters in high-rent areas? In
the face of such overwhelming IFS evidence to prove this, are the
Government giving any consideration to reframing the way that
housing benefit is calculated in order to remove this growing
unfairness?
(Con)
Again, I note the comments made by the noble Baroness. We are
very aware of this, and we are aware of the juxtaposition of what
central government can do and the role of local authorities. As I
said earlier to the noble Baroness, Lady Lister, local
authorities are best placed to understand exactly where the funds
that we give them are best targeted. However, there is more than
that; I mentioned the discretionary housing payments, but we also
have the household support fund. There are a number of other
initiatives which are important to mention as regards helping
people, particularly to stay in their homes.
(Con)
I accept what my noble friend says about the Autumn Statement,
but is there not one sector of the public who are particularly
badly affected? That is the people who are unfortunately
unemployed and who are totally dependent on the local housing
allowance and therefore disadvantaged, according to the local
authorities that I have checked with.
(Con)
Yes, indeed, and this plays into what we spend a lot of time
doing in our department, which is looking at universal credit and
the benefit cap, including the need for housing. We therefore
recognise the importance of safeguarding the welfare of
claimants, particularly those who, I am afraid, have got into
debt. Looking at how they are able to afford housing is a key
part of that.
(Lab)
My Lords, in the light of the rise in rents in the private
sector, the likely rise in local authority rents and other social
housing and the inadequacy of the local housing allowance to make
good that, what is the Government’s estimate of the number of
evictions that are likely to take place in both the public and
private sector—that is in both social and private sector
housing?
(Con)
I certainly do not have an estimate of what the evictions will
be, but we are very aware of the pressures around and we focus on
the homelessness prevention grant, which is given out. That is to
ensure that people are not evicted from their homes. It is very
important that we do whatever we can to support people with their
houses, particularly in areas where there is the greatest
pressure, and the homelessness prevention grant will help as an
extra comfort blanket for that.
(CB)
My Lords, what proportion of people receiving the local housing
allowance are unemployed and therefore heavily dependent on this
money to pay their rent?
(Con)
Although I do not have that particular figure—perhaps it would
come from local authorities—I will certainly be very happy to
write to the noble Lord with that information.
(Lab)
My Lords, let us try to understand the system. The Government set
up a system where you were meant to be able to rent one of the
cheapest 30% of properties in an area on the local housing
allowance rate and then they froze those rates in cash terms
while rents kept going up. That forces people on low incomes to
compete for fewer and fewer properties in their local area. This
is not at the margins. Roughly 1.5 million people on universal
credit get the housing allowance. Over half of those are having
to top up their rents by an average of £100 a week. The
inflationary increase that the Minister mentioned for the adult
allowance on universal credit was a top-up of £100 a month, but
£34 extra a month is coming in. How does that work?
(Con)
The noble Baroness might like to be reminded that the LHA was
originally set at 50th percentile of local market rents and then
the policy was reformed, as she will know, in 2011, when it was
reduced to 30th percentile. The reforms were made for a reason,
because the scheme was unsustainable, with excessively high LHA
rates in some areas. Having said all that, we are very aware of
the pressures at the moment, as I said earlier, and that is why
we have other initiatives to help those who are really
struggling— I acknowledge that they are—in some cases with their
housing costs.
(Con)
My noble friend has mentioned several times discretionary housing
grants, which are available to top up the difference between the
local housing allowance and rents. Should not more be done to
make those better publicised and if, as the noble Baroness said,
there is pressure on the local authorities that have these grants
available, would it not be more economical to top up the
discretionary housing grants for local authorities if the
Government are unable to review local housing allowances?
(Con)
Yes. My noble friend makes a good point, and it may well be that
better communication is required. I will certainly look into
that. However, local authorities, as I said earlier, have broad
discretion to spend in line with their local priorities,
supported by the non-statutory guidance provided by my
department. That provides a list, crucially, of priority groups
to assist with their decision-making. Obviously, that needs to be
informed perhaps by better communication in terms of where the
needs are. There is no evidence that it is not working, but I
will look at that.
(LD)
My Lords, there is evidence that the freezing of the local
housing allowance affects families most severely, particularly
those subject to the benefit cap and, most particularly, lone
families. In his reply to the noble Baroness, Lady Lister, the
noble Viscount mentioned the importance of targeting resources
where they are needed. How can he justify this policy given that
we know what the effect will be?
(Con)
I would answer that by saying that it is not a question of
justifying it but of looking at the whole way in which we are
helping people at the moment. That is why it is worth reminding
the noble Baroness that, for example, working-age and disability
benefits will increase by 10.1% in 2023-24, which I will be
speaking to later in the Moses Room. In addition, the benefit cap
will be increased in line with CPI. We understand the pressures
that people are under and that is why we will also deliver
further cost of living payments worth up to £900 for claimants on
means-tested benefits, £300 for pensioner households and, as I
mentioned yesterday, £150 for those on disability benefits.
(Lab)
My Lords, the Minister seems to suggest that people should
contact the local authority if they are in trouble. Has he
contacted all local authorities to see whether they can help
those people? If he has done so, can he publish the findings?
(Con)
I will see whether we are able to publish the findings, but
perhaps I may reassure the noble Lord that there is continuous
interaction between central government and local authorities in
terms of the funds that we give them. As I said earlier, it is
for them to prioritise the targeting of the funds but, equally,
we want some feedback on how well those have been targeted. That
is happening.
