Z2K responds to Communities & Local Government Select Committee inquiry into homelessness

I’ve had my head down over the last couple of weeks finalising Z2K’s written evidence to the Communities & Local Government Select Committee’s inquiry into homelessness.  House of Commons rules mean we aren’t allowed to publish that submission until the committee itself has done so.  But it won’t surprise anyone who has followed our work on behalf of clients who are either homeless already or threatened with homelessness that we lay the blame for the recent increases squarely at the door of the Government’s cuts to Housing Benefit.

Z2K’s opposition to the Government’s 2011 caps on Local Housing Allowance and the more recent Household Benefit Cap have been stated clearly and loudly on many occasions.  Our criticism springs directly from the experience of Z2K’s Next Door project in helping around 1,000 low income Londoners hit by these caps.  Given its political balance, we doubt the committee will share that view, and we certainly don’t expect the Government change tack even if they do.  But for us, it is vital that we speak truth to power even when those words fall on deaf ears.

This inquiry gives us a chance to explain why London’s homelessness crisis is being made so much worse than it would otherwise be.  One of the key issues we raise is the erosion of the value of Housing Benefit subsidy for temporary accommodation for homeless households.  Following concerns that one or two boroughs were “milking” this subsidy by charging higher rents than they would otherwise, the last Labour Government introduced a new formula of 90 per cent of the LHA rate plus £40 a week.  Coalition Ministers “froze” the LHA rate used at 2011 levels, and it has been stuck there ever since.

The de facto cut in subsidy over the past five years has had serious consequences for London boroughs trying to source properties in the private rented sector to use as temporary accommodation for homeless families.  It is undeniably the driver for both the relentless increase in families with children illegally placed in unsuitable Bed and Breakfast accommodation for more than six weeks, and the growing numbers of homeless households placed in TA outside their home area.  We also think it lies behind the ratcheting up of the kind of disreputable “gatekeeping” practices that many boroughs are now using to prevent homeless people accessing their rights.

In a brilliantly Kafka’esque explanation of its reasons for not uprating the subsidy back in 2014, DWP explained, “the rate currently used in the calculation for HB subsidy in TA cases is the Jan 2011 LHA rate at the 50th percentile. We looked at changing the rate to the 2014/15 rate. However, any uprating would mean that the LHA rate would then be based on the 30th percentile.  Analysis showed that any gains made by uprating to the 2014/15 LHA rate were lost by the move from the 50th percentile to the 30th percentile.  So the decision was made to leave the calculation as it is for the present.”  In other words, “don’t complain, we could have made things even worse”.

And so it may well turn out to be.  In his Autumn Statement, the Chancellor announced that, the TA Management Fee will no longer be paid through the benefits system – instead, councils will receive £10 million a year more, upfront, so they can provide more help to homeless people.”  While this sounds generous, it works out to be an increase of less than £3 a week for each of the 68,560 homeless households in TA.  Clearly, it is far short of what boroughs need to improve their prospects of securing PRS properties for use as TA.  Worse still, it is based on the current number of households in TA, and so if those numbers continue growing after 2017, it becomes a further cut in subsidy.

Z2K’s evidence covers plenty of ground, and includes strong recommendations what needs to change, but we really do hope the committee will explore this TA subsidy issue in detail.

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