Agenda Item No
The Vale of Glamorgan Council
Scrutiny Committee (Housing and Public Protection): 2nd November 2011
Report of the Director of Legal Public Protection & Housing Services
Welfare Benefit Reform
Purpose of the Report
1. To apprise Committee of the UK Government's proposals for Welfare Reform which will directly affect both Social Housing Tenants and potentially the allocation of vacant Social Housing accommodation.
1. That a detailed assessment of the potential impact of these proposed reforms on Social Housing tenants and applicants in the Vale is undertaken and a further report brought back to the Committee once the assessment has been completed.
Reasons for the Recommendation
1. So that impacts of the proposed reforms are understood.
2. So that an action plan for the management of these reforms can be established including a review of the way the Council uses its Social Housing Stock and lets its vacant dwellings.
3. So that we can plan for any increase in homelessness as a direct result of these proposed reforms.
2. The UK Government set out a substantial package of Welfare Reform measures in its Emergency Budget of June 2010.
3. This matter was considered by Cabinet on the 5th January 2011 (minute number C1164) and referred to Scrutiny Committee (Housing and Public Protection) on the 9th February as a reference. This paper is attached as Annex 1 for background reading.
4. The Welfare Reform Bill is currently proceeding through the various Parliamentary stages.
5. Whilst not set in 'tablets of stone' it is opportune to consider the practical impacts - which for many tenants and landlords may be significant.
Relevant Issues and Options
Restricting Housing Benefit to Social Housing Tenants on property size
6. It is proposed that from April 2013, Housing Benefit will be restricted to allow for 1 bedroom for each person or couple living as part of the household; with the following exceptions:
· Children under 16 of the same gender are expected to share
· Children under 10 expected to share regardless of gender
· Disabled tenant or partner who needs a non-resident carer will be allowed an extra room.
7. These restrictions will only apply to claims where both the claimant and their partner are under the state pension credit age which is likely to rise alongside the state pension age.
8. In Wales this proposal is likely to affect 40,000 Social Housing tenants or 42% of working age social rented Housing Benefit claimants. On average in Wales this will mean a reduction in Housing Benefit of £11 per week if 1 bedroom extra; £20 per week for 2 or more bedrooms extra. This is likely to be higher in the Vale as our rents are already at benchmark levels.
9. Currently, this Council does not have information on the number of its tenants - or its partner RSL tenants - that this proposal is likely to affect.
10. However, we only have a small number of 1 bedroom Social Housing properties and it is therefore common practice for single people or childless couples to be housed into 2 bed flats.
11. Additionally, we will have many tenants of working age who are occupying larger family homes whose families have grown up and moved out. Because of the profile of our Social Housing stock many families with same sex children or with children of mixed sex under 10 will be occupying dwellings considered too large under these proposals.
12. An overview of the Council's Housing Stock is shown for information at Annex 2
13. Currently the UK Government is not proposing any other exceptions to the size criteria. This means that for example the reforms could also affect:
· Separated parents who share the care of their children and many have been allocated an extra room to reflect this. Under these proposals the 'designated main carer' will receive the extra benefit.
· Foster carers because foster children are not considered as part of the household for benefit purposes.
· Parents whose children visit but are no longer part of the household.
· Families with disabled children (where currently they could be allocated a separate bedroom).
· Disabled people including people living in adapted specially designed properties.
14. Given that this Council is investing heavily in adaptations and facilities to its disabled tenants this latter factor is potentially of particular concern. The Government has previously stated that they would look at the matter but to date no changes to the exception criteria have been proposed.
Non Dependent Deductions
15. This affects all tenants. There will be staged increases in the rates of non dependent deductions in the income related benefits from April 2011. This again is significant as these deductions had been kept stable since 2001.
16. The intention is that the increases between 2011 and 2014 will reflect the level they would have reached if these had increased in line with rents and Council Tax over the period between 2001 and 2014.
17. This simply means that if any household has a non dependant living with them then their benefit will be reduced with the non dependent expected to make up the shortfall of rent.
18. The above is likely to cause additional financial hardship on families and could lead to increased rent arrears, or as likely, families kicking out the non dependent leading to an increase in homelessness.
Impact on the Council's ability to house homeless / potentially homeless applicants
19. There are significant changes proposed which will impact on a Council's ability to utilise the private rented sector.
These are outlined in some detail in Annex 1.
20. As with many Government polices there is a clear conflict with on the one hand the proposals to enable the Council to discharge its homelessness duties by securing good quality and affordable rented housing and the proposals within the Welfare Reform Bill which sees the level of Housing Benefit paid to tenants living in private rented accommodation reduced considerably.
21. Added to this is the current low levels of mortgage availability which sees more demand on private renting and therefore generally higher rents in this sector.
22. Much of the Council's very good work over recent years in securing private rented housing e.g. Vale Assisted Tenancy initiative; Private Sector Leasing, Social Lettings Agency may well be badly affected by the restrictions in housing benefit allowances which in turn will place more burden onto B & B costs and our scarce social housing resource.
23. One very likely scenario is that homelessness may well become the only route into Social Housing if these reforms come into being.
24. One additional proposal not covered in Annex 1 is the increase in shared accommodation rate age limit from under 25 to under 35 to take effect from April 2012.
25. This means that applicants under 35 and living in private rented accommodation will only be entitled to the Housing Benefit rate of occupying a room within a share house - significantly lower than the Housing Benefit rate for a 1 bed self contained property.
26. If these proposals are adopted by Government we can expect the following pressures:
· Demand to downsize from existing social housing tenants of working age and living in properties exceeding the size criteria.
· Homes4U applicants of working age and on benefits only being prepared to consider accepting social rented properties that meet the size criteria they are eligible for.
· Significant difficulty in attracting private landlords to accept tenants on benefits.
· An increase in private sector evictions as landlords refuse to renew tenancies of those tenants on benefit in favour of working applicants.
· An increase in demand for social housing from single people under 35.
· More demand on the homeless service through the impact of the increase in non dependent deductions.
· Local lettings policies may be restricted e.g. if we have to use more flats to house smaller households with dependent children.
Resource Implications (Financial and Employment and Climate Change, if appropriate)
27. The Council has been successful in obtaining a £27,000 grant from the Welsh Government to enable it to assess the impact on the proposed Welfare Reform Bill on residents of the vale of Glamorgan.
28. This grant is being used partly to find a temporary post.
29. A cross service working group has also been established to consider the Vale wide implications of Welfare Benefits Reform and our response to this. This group will also look in detail at the potential resource implications of reform.
Legal Implications (to Include Human Rights Implications)
30. The Welfare Reform Bill will become a UK wide policy which all Councils will be legally obliged to implement.
Crime and Disorder Implications
31. The lack of a good supply of affordable housing across all tenants will invariably lead to an increase in squatting; unauthorised HMOs and roofless crime and disorder may increase as a result.
Equal Opportunities Implications (to include Welsh Language issues)
32. It will become increasingly difficult to meet our obligations through the likely mis-match of the increased demand for good quality affordable housing that meets the needs of the individual.
33. Community well being to make the Vale of safe and healthy place in which individuals, children and families can live their lives to the full.
Policy Framework and Budget
34. This report is consistent with the policy framework and budget.
Consultation (including Ward Member Consultation)
Housing Benefit Manager
Relevant Scrutiny Committee
Housing and Public Protection
Cabinet Report of the 5th January 2011 (minute number C1164) (Annex1)
Tony Jaques - Head of Housing
Peter Evans - Director of Legal, Public Protection and Housing Services