Stoke-on-Thames: location, location, location

The news about Newham and Stoke has touched a nerve like few other housing stories this year. I wonder though if the coverage so far has identified the crucial issue.

The story broke on the Today programme on Tuesday morning. Newham had written to 1,179 housing associations around the country asking for help in finding homes for people affected by housing benefit cuts. The reason Stoke is in the headlines is that a housing association there went public with the letter (here). Housing minister Grant Shapps appeared alongside Newham mayor Robin Wales and accused him of ‘playing politics’ with the issue (something that Shapps himself would of course never do). I blogged my initial take on the issue for Inside Housing here but there are excellent blogs out there too from Polly Curtis, Steve Hilditch, Nancy Kelley and Toby Lloyd.

By the time the World at One went out at lunchtime the BBC was dutifully reporting that as the main angle and Iain Duncan Smith was wading in to the row. By late afternoon, Shapps had made an official complaint to the BBC about the way the story was covered.

Cast your mind back four months and you may remember a previous row between Shapps and Today. The minister was furious when the programme claimed he had refused to be interviewed about the dire affordable housing starts figures. The following day he had an on-air row with John Humphrys in which he claimed he had actually been on a train to (I promise I am not making this up) Stoke.

Most of the coverage so far has given the impression that this is about ‘the housing benefit cap’. It’s true there are bedroom size caps of up to a maximum of £400 a week or £21,000 a year, the one that is trotted out by ministers most often as a justification for cutting the benefit of the 99.9 per cent of claimants whose rent is nothing like that. Shapps was allowed to get away with this on Today despite the fact that this does not apply to Newham since the maximum payable under the local housing allowance in the borough is £300 a week. There is the total benefit cap but that does not come until next year. Then there are a range of other cuts such as the 30th percentile, the LHA freeze and the restriction to CPI. Then there’s the issue of how many homes that are apparently for let are actually available to families on housing benefit.

However, that underplays a crucial element of the story. If housing benefit cuts were the only issue, it would be a problem for Newham but not a Stoke-sized one since the money comes out of the budget of the Department for Work and Pensions (DWP). The problem is the way that this interacts with changes in the Localism Act to allow councils to discharge the duty to house homeless people into the private rented sector. In contrast to the housing benefit cuts, many local authorities are enthusiastic about a change that will mean that they will be able to force them into the private sector rather than wait in temporary accommodation (often for years) for a social sector vacancy to arise. In years gone by, this has been a nice little earner for some councils because they have been able to add a management fee and send the bill to the DWP but now the housing benefit rate for temporary accommodation has been cut too.

(Added Wednesday April 25) This factor will be compounded by the fallout from the impact of the housing benefit caps themselves since more people will be presenting as homeless to their local authority. The government’s argument was that the cuts would make landlords reduce their rents but it does not seem to be working out that way judging by a report from Central London County Court by Amelia Gentleman in The Guardian. She interviews a man who describes the process as ‘ethnic cleansing’. He goes on: ‘Secure home life is important. See where this ends up in four years. See what social issues you are going to have… We are asking for trouble.’ However, this is not a tenant or someone from Citizens Advice of Shelter but a Marylebone landlord who is evicting his ninth family in the last few months. He has no choice if his business is not to go bankrupt.

Two further elements make all this more of an issue in Newham. As Robin Wales said this morning, there is rising demand for private rented accommodation as a result of the Olympics and of east London being seen as a cheaper alternative by richer boroughs seeking somewhere to send their own homeless people and it’s not surprising that the borough is seeking a solution of its own. Meanwhile Wales have been among the biggest enthusiasts for the idea of prioritising people in work and members of the armed forces for new social housing tenancies (‘don’t come and show us that you’re poor and you’re not working and the most needy’, he told Inside Housing last year). That inevitably means that someone else will be missing out: in this case homeless families on the waiting list.

This is not just an issue for Newham of course. Last year, Conservative-controlled Croydon made headlines with a very similar plan involving Hull rather than Stoke. Meanwhile, the alliance of Tory-run Westminster, Hammersmith & Fulham and Kensington & Chelsea is looking at Nottingham and Derby. What is curious is that Newham should have chosen to write to so many housing associations on such a controversial issue in the run-up to local elections.

So will they get away with sending their homeless families north? For months the government has been promising regulations on how the system of discharging the homelessness duty into the private rented sector will work. The key question is whether the new home is ‘suitable’. The regulations are now expected within the next week and will almost certainly cover the physical condition of the property and the record of the landlord – but will they also cover the location of the property? That is crucial for any number of reasons: keeping families and communities together; not disrupting children’s education; not moving vulnerable families into areas where essential services are already under severe pressure and unemployment is already high.

On Today on Tuesday, Shapps insisted: ‘I’ve been absolutely clear in those rules to local authorities that they must take into account the welfare of tenants in doing so, and that includes not packing them up and sending them to Stoke… it’s unfair and wrong. I’ve made the legislation and guidance very clear that they’re not to do this.’ Toby Lloyd of Shelter takes that as a positive sign that Shapps is promising that councils will not be able to ‘send their homeless households miles away from jobs, schools, families and communities’ on his watch.

Let’s hope so but I remember previous misleading pledges from Shapps too. Until I see that the regulations specifically cover the location of the private rented property, I’m sceptical.