Thursday, 20 June 2013

Lord Freud's reclassification threat - the letter

Received from the DWP:

Re-designation of properties and the removal of the Spare Room Subsidy
As you may be aware there have been a number of reported cases of local authorities re-designating their properties, without reducing the rent to reflect the loss of a bedroom. Such action could lead to incorrect Housing Benefit subsidy claims being submitted to my Department at the end of the financial year. 
In principle my Department has no objections to re-designating properties where there is good cause to do so, for example where a property is significantly adapted to cater for a disabled persons needs.  However, we would expect the designation of a property to be consistent for both Housing Benefit and rent purposes.  Blanket redesignations without a clear and justifiable reason, and without reductions in rent, are inappropriate and do not fall within the spirit of the policy. 
Between 2000 and 2010 expenditure had doubled in cash terms, reaching £21 billion. Unreformed, by 2014-15 Housing Benefit would cost over £25 billion. By removing the Spare Room Subsidy £500 million a year can be saved through greater efficiency and better use of social housing stock. It is therefore vital that local authorities adhere to their statutory responsibility to implement this policy on behalf of the Department. 
I would like to stress that if it is shown properties are being re-designated inappropriately this will be viewed very seriously. If the Department has cause to believe this is the case we will commission an independent audit to ascertain whether correct and appropriate procedures have been followed. I wish to state clearly that these audits would be separate from the subsidy audits already undertaken, which carry out sample checks on the assessment of Housing Benefit. 
Where it is found that a local authority has re-designated properties without reasonable grounds and without reducing rents, my Department would consider either restricting or not paying their Housing Benefit subsidy. 
Lord Freud, Minister for Welfare Reform

This immediately raises questions about the approaches taken by Leeds and Nottingham - the crucial sentence here is the last one - the restriction or non-payment of the subsidy in Camden would mean anything up to a £150m loss. 

Tuesday, 18 June 2013

Camden and the Bedroom Tax

- The Bedroom Tax is unfair and impacts over 1800 people locally.
- Camden's Labour council opposes the Bedroom Tax and is campaigning for the next Labour government to reverse it.
- Camden will do all it can to help tenants stay in their homes during the welfare changes and is helping people with extra advice, emergency housing payments and debt support.
- Any council tenants faced with eviction as a result of the Bedroom Tax will be made a direct offer of suitable alternative social housing in Camden - this way no one will face homelessness.
- Our help is practical and helps the most vulnerable residents.

Indicative approach Bedroom Tax
Of all of the welfare changes, the Bedroom Tax – the reduction in housing benefit for under-occupancy – is the most pernicious. It's clearly not as simple as saying to people that they should downsize if they are in a home with spare rooms; there clearly aren't the properties on the market to do that: if only a third of households downsized because of the bedroom tax, Camden would still need an extra 308 one-bedroom properties, 153 two-bedroom properties, 36 three-bedroom properties and seven four-bedroom properties to come on to the market immediately.

Camden has repeatedly said we are against the Bedroom Tax, most recently participating at a meeting in Manchester with 36 other councils to reaffirm this, and working all the time with the LGA, our MPs and others.  

Camden wants the Bedroom Tax stopped - and reversed - and is lobbying for this to be national policy if Labour is elected in 2015. 

Camden's approach
Like other councils Camden council has limited resources to help people, but is committed to helping residents who are put in the most vulnerable circumstances as a result of these changes to avoid eviction if the Bedroom Tax or any other welfare change pushes them into deep arrears and they have nowhere else to move to.  We will do all we can to help them stay in their homes, including use of the Discretionary Housing Payments.

Camden's approach is that anyone actually faced with eviction as a result of the Bedroom Tax (after all other avenues have been exhausted) will be made a direct offer of suitable alternative social housing in Camden.

This way, no-one will face homelessness – other than by having rejected all other options open to them. 

Given that there are many changes impacting some of our poorest households, the Council is committed to helping peoples' bottom line.  We are investing extra support and aid to vulnerable people: more funding of jobs and apprenticeships; introducing the London Living Wage; £3m to for extra homelessness pressures arising from the Benefit Cap and changes to housing benefit and the bedroom tax; £360,000 in extra welfare advice and debt support to neighbourhood services, including CABx; work to lower heating bills; investment in a Credit Union and over £400,000 to reduce Council Tax bills for those impacted by the reduction in Council Tax Benefit please, for example see

Brighton and Leeds
Brighton and Leeds are cited as examples of authorities which have resisted the Bedroom tax or have provided alternatives.  On examination both authorities are implementing the Bedroom Tax. But like Camden, both councils have developed policies to mitigate the worst effects of this tax for their area based on local judgement. Camden's mitigation package is one of the widest in the country, but we are not aware of any council that is not implementing the policy or protect all those affected indefinitely. 

Why we aren't adopting a Brighton 'no evictions' approach?
Brighton claims to have a policy that protects tenants from eviction.  On investigation their position is far more limited than advertised: it doesn't guarantee that if Bedroom Tax arrears are a factor people won't be evicted; only if Bedroom Tax is the only reason why they are so far behind in rent payments will tenants be spared eviction, see our comment in the Guardian

Eviction orders generally involve individuals who are several thousands of pounds in arrears, or people who have consistently flouted reasonable repayment orders or avoided communication with the council. The average affected tenants in Brighton will lose just over £600 a year as a result of the Bedroom Tax. It could therefore take several years before the sums add up to evict "solely" on the back of bedroom tax arrears – and yet the Brighton policy only lasts for a year.

In the context of other benefit changes and direct payment of benefits to claimants, we feel that this policy is very limited.  It would also force the council to protect people from one group over another (recent jobless, or those suffering another government welfare cut), without considering extent of their vulnerability.   

Why we aren't adopting a Leeds reclassification approach? 
The Leeds reclassification of flats has been examined.  Although Camden has already reclassified a small number of properties (for example, where rooms are too small to be used as a bedroom), the Leeds  approach would not work in Camden due to the very substantial drain on resources this would involve the housing repair funds - Camden has a much bigger repairs backlog than Leeds.  Reclassifying properties would also hinder our attempts to deal with overcrowding in the borough, where there are currently over 5600 people waiting for suitable homes.