April is the cruellest month

Every time you think you have got your head around the impact of the April 2013 welfare changes you realise you have forgotten something that makes it even worse.

I don’t need reminding that there are now just 147 days until the bedroom tax and overall benefit cap take affect. I know that increases in the local housing allowance will be restricted to CPI inflation from the same date. I realise that a range of other cuts in benefits and the localisation of council tax benefit and the social fund with reduced funding come in at the same time.

However, that is only the changes introduced by the Department for Work and Pensions. On top of that, I knew that local authorities had suffered deep cuts in their overall funding and I’ve been following closely the change in the Localism Act to allow them to discharge their homelessness duty into the private rented sector (which applies from this time next week). And I was aware that the Ministry of Justice was cutting legal aid to remove funding for most housing and welfare cases without quite realising that also applied from April (for obvious reasons).

The potential for all of those individual factors to interact with each other and the potential for unintended consequences is clear. However, until I read today’s report from the Child Poverty Action Group (CPAG), I had not fully thought through the extent to which this will create difficult and sometimes impossible dilemmas on the ground.

Even then, the focus of the report is mainly on London (because that is where the biggest impacts will be felt) and on the private rented sector (because that will have to cope – or not – with the fall-out). So it does not really cover concerns about the bedroom tax and the switch to universal credit.

The headlines generated by the report include warnings about the extent of out-of-area placements being planned by councils (with a Guardian survey finding widespread plans) and the potential for conflict with the troubled families programme (in Inside Housing). In the first case, the concern is that Newham was just ahead of the game when it contacted housing organisations throughout the Midlands and North about housing its homeless families. In the second, the worry is that councils face a choice between keeping ‘troubled families’ in their homes and potentially rewarding anti-social behaviour or allowing them to be evicted and to lose contact with the intensive programme of support that is meant to help them.

The most immediate priority, according to CPAG, is changing the regulations for the overall benefit cap so that it does not apply to temporary accommodation. Otherwise, with rising private rents making the procurement of affordable accommodation in London unsustainable, both families made homeless by the cap and those already in temporary accommodation could face double homelessness as they are evicted for rent arrears.

Little wonder then that the report found that London councils are looking to the North and Midlands for both private and temporary accommodation. Except that the whole thing could be open to legal challenge under strengthened guidance on ‘suitability’ proposed by Grant Shapps after the original furore about Newham.

The consequences for tenants are grim even with moves that are closer to home – as revealed in The Guardian’s story about a mother with two children from Waltham Forest. She was rehoused 37 miles away in Lutonbut the move split up her family so that her older daughter could stay in school.

However, the report reveals the pressures that will leave councils ‘between a rock and a hard place’. London Councils has already estimated that 133,000 workless households in London, including 63,000 with children, will be unable to afford their current rent as a result of the bedroom caps and overall benefit cap. Surveys also show a growing proportion of London landlords will either not extend existing tenancies or consider not renting at all to people on benefit.

Research so far into the impact of the 2011 changes (the bedroom caps and cut to 30th percentile) suggests that most tenants will look to make up rent shortfalls from elsewhere rather than move. The proportion moving out of the borough has been lower than expected so far, perhaps because transitional protection means the impact of the bedroom caps on existing claimants is only just being felt. However, staying put will become increasingly difficult as further cuts bite and larger families face the biggest shortfalls – and there is no transitional protection under the April 2013 cuts.

The officers interviewed for the report said that elected councillors had yet to realise the full implications of the changes. ‘While several officers had received a strong steer from elected members that they did not want to see families moved out of the borough, officers are struggling to see how they could achieve this,’ says the report. Officers were ‘unclear’ as to how claimants could avoid moving out of the borough without significantly increased overcrowding.

Come April 2013, families will have three options: look for cheaper accommodation near to home or elsewhere; look for work of over 24 hours a week to avoid the benefit cap; or present as homeless to their local authority. If they are vulnerable and not intentionally homeless, then the council has to find them a suitable home and provide temporary accommodation in the meantime. From next week the home can be private rented.

Some councils are using discretionary housing payments to pay deposits or offer incentives to encourage landlords to take claimants – but this is only ever a short-term solution. Meanwhile, even outer London boroughs are finding they cannot match a supply of affordable accommodation to demand.

The report goes on: ‘Given the pressures on private rents, most authorities felt that it would not be possible to do this to any large scale within London, particularly for families whose benefits are capped at £500 a week. This led to discussions about procurement of private sector properties elsewhere – locations cited included Nottingham, Derby, the Midlands and Wales.’

Many councils believe that the government’s suitability consultation on the discharged duty, which says that ‘it is not acceptable for local authorities to make compulsory placements automatically hundreds of miles away’, leaves them in an impossible position.

The benefit cap will leave families in temporary accommodation with a shortfall against their rent that councils cannot ask them to make up if it would deprive them of other essentials. The report goes on: ‘Applying the benefit cap to families in temporary accommodation effectively means that families who are accepted as homeless, could be made homeless once more due to their inability to pay the costs of temporary accommodation.’

And what about people who local authorities persuade not to make a homelessness application and accept help through prevention and relief work? Do they accept stay put and find a way to make up the rent shortfall, move into sub-standard and overcrowded accommodation or move far away from their communities and children’s schools? None of the choices look good and the scope for choice is narrowing all the time.


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