The Social Network: Hard Pressed

After the Lord Mayor’s show (the Housing White Paper) things can always seem a little bit flat, but that’s usually when the hard work really starts.

In this instance, we’ve all heard the commitments to building more new homes of all tenures in the future, but in the here and now social landlords are getting on with the day to day business of trying to find accommodation for homeless families and trying to collect rent from tenants whose income is being cut (again).

As many readers will know, local authorities have already borne a heavy burden of the public expenditure cuts imposed from 2010 onwards, with some councils seeing their financial support cut by as much as a third.

Other figures are equally as frightening – according to the Local Government Association, councils are spending on average £2m a day on temporary accommodation because of a shortage of permanent housing.

Add that together across the country and the LGA says councils have spent £2.6bn in the last three years on housing people in temporary accommodation and the total spend has risen by 30 per cent since 2013.

To make matters worse, this accommodation includes some of the worst places to live and bring up children in the country. Often families will be living and sleeping in a single room, with washing and cooking facilities shared with several other families, all of whom are desperate to move into settled accommodation.

Hard Pressed

Over 75,000 households are currently living in temporary accommodation, including bed and breakfasts, hostels and private rented accommodation – a 10 per cent increase on the same period last year and a 58 per cent increase since 2010. These are staggering statistics for the fifth largest economy in the world, but things could be about to take another turn for the worse.

The latest round of welfare benefit cuts are being rolled out with young adults (the under 35s) in the firing line, while hard pressed council managers are waiting to hear when the Homelessness Reduction Act is due to go live, adding to their responsibilities to the homeless and those in imminent danger of being made homeless.

The general principle of helping unfortunate and deserving people is not at issue. Far from it. The concern is how can the new responsibilities be discharged? Even where suitable accommodation can be found, there is the small matter of how can it be afforded?

Nearly two-thirds of English councils are struggling to find tenancies for homeless people, a report commissioned by Crisis and the Joseph Rowntree Foundation has found.

Of 162 councils to respond to the survey, 64 per cent said they are finding it increasingly difficult to house homeless young people and large families, and 85 per cent said they are struggling to help single people aged 25-34 into accommodation. A majority of councils said they expected the roll-out of Universal Credit to exacerbate homelessness, mainly because of the potential impact it will have on landlords’ willingness to let to homeless people.

Difficulties

Nearly half (49 per cent) said they are finding it very difficult to find private rented accommodation for homeless applicants. Councils nearly unanimously (94 per cent) said they expect more difficulties in finding accommodation for homeless people aged 25-34 in the next two to three years.

Welfare cuts and Local Housing Allowance (LHA) rates falling short of rent levels in many areas were also cited as barriers to councils’ attempts to house homeless applicants.

The LGA has been calling for a temporary lifting of the Local Housing Allowance freeze, to help provide more accommodation for vulnerable families. But at the time of writing, Ministers have yet to respond positively to this request.

And the people they are trying to help have even less to live on than a few years ago, with further reductions in benefit payments on their way. Childless tenants under 35 will only be eligible for housing benefit at the ‘shared accommodation’ rate, and those aged under-21 will not be eligible at all unless they fit into one of 11 exemption categories. These are grim times indeed.

According to Government estimates around 1,000 young people will be affected by the cut to housing benefit for under-21s this year, rising to 11,000 by 2020/21.

There is a further complication for young adults to overcome in the way that Universal Credit operates. This requires a claimant to provide an address before benefit can be paid. If they do not have an address, then they can’t claim benefit. And until they can confirm the benefit, it will be extremely difficult to get an address. It is a chicken and egg conundrum of the most difficult form to resolve.

Restrictions

Councils can claim for, and they do make, discretionary housing payments to help those in the most need, But even here the rules can be very difficult to comply with, and in the meantime many vulnerable people are wholly reliant on charitable agencies or they simply fall through the net and have to somehow fend for themselves.

The LGA has once again called on the Government to lift the restrictions on councils’ borrowing caps, a move which Housing and Planning Minister Gavin Barwell recently ruled out. Just prior to the recent budget, the LGA asked the Government to allow councils to set their own rents, to keep 100 per cent of their Right to Buy receipts to reinvest in replacement homes and make the high-value asset levy a voluntary policy.

Conservative politician and chair of the LGA Lord Gary Porter said: “With councils continuing to face huge financial pressures, it is unsustainable for them to have to spend £2m a day to house vulnerable people at the sharp end of our housing crisis. Councils would much rather invest this scarce resource in building new affordable homes and preventing homelessness happening in the first place.”

Ministers responded (in part) by making £402m of funding available over the next two years, with the money being targeted at the councils with the greatest homelessness demand. There will be £186m in 2017/18 and £191m in 2018/19, with £25m set aside for London councils to work together to provide homelessness accommodation.

While any additional money will help, many experts in the sector say this money is not new and is simply being taken from other social care funding pots and it’s a case of robbing Peter in order to pay Paul.

Local government leaders are desperate to play a more active part in resolving the current. But more radical solutions are needed if they are to positively tackle the growth in homelessness. As evictions from private rented sector tenancies are the major cause of homelessness at present, it would appear logical to tackle the problem at source and make it less easy for private landlords to evict tenants who have not broken any tenancy conditions.

New duties

The new homelessness reduction act seeks to prevent homelessness by placing extra duties on councils to intervene at an earlier stage with households who are at risk of homelessness, provide more detailed advice on housing options for those at risk of homelessness, and make it easier for applicants to appeal a decision.

The Government is making £61m of funding available for councils to cover these new duties in the first two years. But once again, council leaders have said this will not cover the full extra costs which their councils will face.

Jon Sparkes, chief executive of homelessness charity Crisis, spoke for many about the bittersweet moment of getting the new law, when he said: “This is an important moment for tackling homelessness and a major victory for those calling for change.

“Yet even as we mark this success, we are reminded of why it is so urgently needed. The number of people in temporary accommodation in England continues to rise. This is the sharp end of the housing crisis, and while this bill is by no means a cure-all, it is a vital part of the solution, and will help to prevent more people from losing their home in the first place.”

Now is the time for Theresa May and her Government to demonstrate they are listening. If May is serious about targeting help towards the just about managing and the most vulnerable members of society, then taking more radical steps would be a good place to start along with giving local councils the tools that they and the LGA have been asking for.

If they do not, then I’m afraid we risk staying on this spiral of growing numbers becoming homeless and councils spending a fortune on placing them in unsuitable, temporary accommodation instead of building them secure and affordable homes for now and the future.