Housing benefit problems a taste of what’s to come

Originally posted on January 9 on my blog for Inside Housing.

We’ve become so used to the misery caused by housing benefit failing to cover the cost of rents that problems with its administration have an almost retro feel to them.

From the perspective of 2020, the 2010s were the decade it turned out that housing benefit would no longer ‘take the strain’ of higher rents but instead passed the costs on to tenants via the bedroom tax, benefit cap, local housing allowance freeze and all the other ‘reforms’ instituted by Conservative-led governments.

But a report out this week from the Local Government and Social Care Ombudsman makes clear that the overpayments, underpayments and other errors that scarred claimants’ experiences of housing benefit from the 1990s to the 2000s are still happening.

It details a whole series of issues with the administration of the system by local authorities and the way the appeal process was handled. But it is the individual horror stories that really bring home the scale of the problems.

In one case a woman appealed a decision to give her no benefit but the council told her it would prioritise other people’s cases before hers. The ombudsman investigated and discovered that there were 500 outstanding appeals dating back up to two years.

In another a man rented a one-bed council flat but the council wrongly believed it was a two-bed flat, then he found work but it took the council six months to adjust his housing benefit.

It took two years of letters about over-payments and threatening possession of his home before the issues were sorted out.

In a third, the council incorrectly calculated the eligible rent of a woman in private rented accommodation and overpaid her housing benefit direct to the landlord.

The council recovered the overpayment from the landlord who began repossession proceedings. The council repeatedly rejected her appeal as invalid and told her wrongly that the landlord would not recover the money from her.

And another horrendous case is highlighted in a separate ruling by the ombudsman also published this week.

A single mother and three children including one who is disabled were made homeless when she was asked to leave by her private landlord after Haringey Council told him incorrectly that she owed more than £8,000 in backdated benefits.

After she was forced to stay in unsuitable temporary accommodation, the ombudsman found that the council was at fault for incorrectly calculating her benefits, wrongly applying the two-child limit, not referring her to the appeals tribunal and mishandling her homelessness application when she was evicted.

In these cases there was at least some redress for the complainants – although the compensation amounted to £1,000 for the distress caused, £1,300 for being unsuitable accommodation for six months and £500 for storage costs in that fourth case.

If that does not sound exactly generous, the other three complainants all got apologies and sums ranging from a token amount to £250 for the distress caused.

But as the ombudsman, Michael King, points out in the report, there is a reason that all these problems sound retro and somehow outdated – separately administered housing benefit is not meant to exist anymore.

Universal credit was announced in 2010 and was originally meant to be fully implemented by 2017. The latest statement from the government now puts completion in 2023.

The election result removes uncertainty about whether it will happen at all but that does not make that latter date any more believable than previous targets.

The delays were one factor in the problems highlighted in the report – the council in the first case was a universal credit trial area from an early stage but the ombudsman found systemic problems caused partly by the fact that housing benefit claims and appeals had not fallen as much as expected.

Housing costs are complicated enough to administer properly in a perfectly designed benefits system.

When housing benefit was originally introduced in 1988, the police had to be called to quell disturbances as queues built up outside housing departments as councils tried to sort out backlogs that left claimants without rent payments for weeks and even months.

The repeated failings of specialist housing benefit departments and their outsourced contractors over the last 25 years show what can happen in a complex system even once it has bedded down.

And now we are part way into universal credit, the system that is meant to make things simpler and more transparent, yet also one with delays in payments built into it from the start and food banks as an added bonus.

This year will at least see the end of the benefit freeze and some extra transition protection when claimants move to universal credit.

But in the face of calls for a fundamental overhaul of the new system, the horror stories keep on coming – see a selection from just this month in Hull, Cardiff, Plymouth, Dundee and Birmingham.

The continuing problems with housing benefit highlighted this week could be just a small taste of what’s to come.