Lord David Fraud

A new independent study was published this week which reveals that over half a million families could face homelessness in the next year due to the Government’s brutal cuts to Local Housing Allowance (otherwise known as Housing Benefit).

Around a third of private sector landlords who currently let to LHA claimants have said they will stop, or are considering stopping, letting to claimants in the next 12 months.  This could remove the availability of around half a million homes from the low paid, pensioners, disabled or unemployed people.

The number of people claiming LHA has soared to over 5 million, up 25% since 2008, largely due to huge numbers of people only being able to find part time work.  The figure, which includes over a million pensioners, show that around 1.6 million of the total number of LHA claimants are private tenants who will be affected by the cut to the Local Housing Allowance.

The study released this week is the first part of a piece of research commissioned by the DWP to track the effects of the vicious cuts to LHA.  Astonishingly Lord Freud, the Minister for Welfare Reform has claimed:

“The research published today gives us an early insight into what is really happening and I am encouraged that it shows that the many scare stories about the effects of housing benefit reform are not materialising.“

This represents a staggering misreading of the report which includes a survey with 1,910 current LHA claimants.  The surveys were carried out in Autumn last year meaning the the vast majority (1,356 claimants) have not so far been affected by the caps.  Only those who have started new claims since April 2011 will have felt any effect from the cuts.  One of the most devastating changes, which will see those aged under 35 only eligible for a room in a shared house, has still not yet been implemented.

Despite this 67% of tenants claim that there is a shortfall between the LHA they receive and their rent – and this is before the cuts have been introduced for the vast majority.  12% of tenants are currently in arrears, and 43% say they are currently finding it very difficult (23%) or fairly difficult (20%) to meet rent payments.

Of perhaps most concern is that 93% of current LHA claimants say they don’t know very much, or know nothing at all, about the upcoming changes to their LHA payments.  This suggests the Government has failed dismally to explain the upcoming devastation set to be caused by the drastic cuts, which will only now be beginning to affect some, though not all, of existing claimants.

Lord Fraud’s claims that all in rosy for LHA claimants either reveals startling naivety or gross  dishonesty.  This report suggests that huge numbers of people were struggling to hold onto their homes even with the system as it was before the cuts.  With homelessness agencies reporting a 16% rise in homeless households in the first three months of this year, the crisis is already escalating.  It will not be until towards the end of this year that the full extent of the LHA cuts will be felt, and even then the £500 a week benefit cap will not yet have been implemented.

Ever the willing lapdog, the Daily Telegraph has hailed the results of the study as a triumph.  Completely misreading the situation, the paper hails the news that a quarter of LHA claimants were looking for work to help meet rent payments.  This is hardly surprising news, given that 21% of those surveyed were in receipt of Job Seekers Allowance, a condition of which is that the claimant must look for work.  It is unlikely that the 25% of those on LHA who are claiming a pension are out looking for a job to avoid impending homelessness.  The study also neglects to inform us whether any of those looking for work have actually found a job, something which is increasingly unlikely in the current climate.

It is the results of the survey of landlords which perhaps reveals the grimmest view of the future.  Out of touch ministers believed that landlords would negotiate and lower rents due to LHA reforms.  The Telegraph hails the new study as evidence that this is taking place, claiming that of those who have attempted to renegotiate rents with landlords, around 1 in 4 were successful.

Many of those people will have renegotiated rents before the cuts – it remains to be seen whether landlords will agree to a further decrease in rent levels when the LHA cuts take effect.  In fact the study is quite explicit in its findings stating that: “in this early stage of the reform, the LHA measures had not, in practice, resulted in an increase in negotiation between claimants and landlords over rent levels”.

Of more concern is the result that 30% of London landlords are already not renewing tenancies due to the LHA changes, whilst only 5% may be prepared to negotiate a lower rent with an existing, or prospective tenant.  Landlords are more encouraged to lower rents if LHA payments are sent directly to them, reducing the risk of arrears building up.  This will no longer be an option when Universal Credit,the new benefit system, is finally implemented.

Lord Fraud can spin all he wants, but this report makes bleak reading.  The Telegraph claim that only 3% of people have been forced to move due to LHA cuts.  What the report actually shows is that 3% of people were having to leave their homes due to LHA rates being too low before the cuts were implemented.

Even with the system as it was huge numbers of people were struggling to pay their rent, and most are unaware of the upcoming tsunami.  The vast majority of landlords are not prepared to make any concessions, and with rents soaring as home ownership becomes an unaffordable dream for most, why would they?

On top of this comes the news that 4000 bed spaces for homeless people have been lost due to cuts.  A perfect storm is coming that may well see homelessness on an unprecedented scale in the UK .  Lord Fraud’s spin will seem as empty as his policies when sleeping bags once again line the streets of London.

Credit to Black Triangle Campaign for spotting the study which can be read at (PDF): http://research.dwp.gov.uk/asd/asd5/rports2011-2012/rrep798.pdf

SOLIDARITY, Always Johnny!

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