Housing benefit reform to create fairer, more sustainable system


Jo has responded to Councillor Charles Kennedy’s concerns over changes to housing benefits.

The coalition government has announced reforms to housing benefits which will ensure that working people on low incomes are not subsidising expensive housing for people on benefits which they themselves could not afford.

Responding to a letter from Councillor Charles Kennedy, Jo has explained that the impact on claimants in east Dunbartonshire will be relatively small, and that more money will be given to local authorities to help those who need it most.

Commenting, Jo said:

“The purpose of these changes to housing benefit are to ensure that people on benefits are not living in expensive accommodation that many working people would be unable to afford. While these changes will save over £1 billion for the taxpayer of the next five years, most of those in East Dunbartonshire whose housing benefit will be cut as a result will lose as little as £1 a week.

“The government is also tripling the amount of money given to local councils to help claimants who are having difficulty covering their rent, giving local authorities the power to deliver help where it is most needed. There will also be extra help for disabled claimants who need extra space at home for a carer.”

The text of Jo’s letter to Councillor Charles Kennedy appears below.

Councillor Charles Kennedy

Tom Johnston House

Civic Way

Kirkintilloch

G66 4TJ

7th October 2010

Our Ref: CK/CBB/ /51/1540

Proposed cut in housing benefit

Thank you for your letter of 24th September regarding the coalition government’s plans for reforming Housing Benefits. Like you, I am keenly aware of the shortage of affordable housing in East Dunbartonshire and the problems it causes.

The purpose of the measures announced is to provide a fairer and more sustainable Housing Benefit scheme by taking steps to ensure that people on benefits are not living in accommodation that would be out of the reach of most people in work, creating a fairer system for low-income working families and for the taxpayer. It will avoid the present situation where some Housing Benefit recipients are able to live in very expensive properties in areas that most working people supporting themselves would have no prospect of being able to afford.

As you may be aware, the government has carried out an initial impact assessment of the changes to housing benefits, including an equality impact assessment which showed that the changes will not have a disproportionate impact on any one group. A full impact assessment will be published before the legislation is laid before Parliament, and I will of course examine it carefully with a view to how it will impact on East Dunbartonshire.

Local Housing Allowance

The government’s initial impact assessment anticipates the number of people who would be affected by the whole package of changes to housing benefit in each region of the country, and by how much their housing benefit would be cut. It shows that in East Dunbartonshire, 150 people in 1 bedroom properties would receive an average of £1 per week reduction; 120 people in 2 bedroom properties would receive an average of £6 per week reduction; and 40 people in 3 bedroom properties would receive an average of £11 per week reduction in their housing benefit. Although you are correct in saying that, theoretically, reductions for those living in 4 or 5 bedroom houses would be higher, government figures show that, based on the LHA caseload at present, fewer than 5 people in East Dunbartonshire would lose out, if any.

I would also point out that the coalition government proposes to amend the size criteria to provide an extra bedroom for disabled claimants who have a non-resident carer, from April 2011.

Non-dependents

The level of deductions to housing benefit made where non-dependents are living in the house will be made in stages, starting in April 2011. By April 2014, these increases will bring the rates to the level they would have been had they been fully uprated since 2001 to reflect growth in rents and council tax.

Top-up payments

You rightly point out that under the current system of housing benefit, introduced by the Labour administration, the local housing allowance does not fully cover most claimants’ rent in the private sector – 48% of claimants pay an average of £23 per week to make up the shortfall. The changes already announced by the Labour government in its March budget would have made 49% of Housing Benefit recipients assessed under the Local Housing Allowance worse off by an average of £12 a week. Together with the package announced in the June Budget, the overall impact of the changes which are being introduced would be to reduce Local Housing Allowance entitlements by an average of £12 a week, based on current rent levels and accommodation choices.

The coalition government also proposes to triple its contribution to local authorities’ funding for Discretionary Housing Payments for claimants who have difficulty covering their rent. This will increase from £20 million a year, to £30 million in 2011/12 and £60 million a year from 2012/13. This will give authorities more flexibility to provide additional support where it is most needed.

Availability of affordable housing

Of course, increasing the available stock of affordable housing East Dunbartonshire is key to solving the difficulties in which many local people find themselves. The Scottish Government must look at ways to bring back into use the 70,000 houses in Scotland currently sitting empty. It is cheaper and greener to renovate existing properties and it could create thousands of new jobs in the construction sector. It is important that there is a reliable and well regulated private rented sector as a bridge between social housing and buying a house. Engaging with the private rented sector can help to reduce social housing waiting lists and engage private sector capital at a time when the pressures on the public purse have never been greater.

For those for whom private rental too expensive it is vitally important that there is high quality social rented sector housing available. There is an overwhelming case for abolishing right-to-buy for new build council and social landlord houses in Scotland, as is proposed in the Housing Bill, and we are pleased that the Scottish Government listened to the Liberal Democrats on this. Scottish Liberal Democrats also proposed amendments, approved by Shelter Scotland, to further extend these reforms yet no other party would support these. Comprehensively ending Right to Buy is one step towards providing more affordable housing.

I hope this serves to answer some of your questions and allay your concerns about the upcoming changes. Please be assured that, when legislation is put before Parliament to affect these changes, the impact upon people in East Dunbartonshire will be uppermost in my mind as I consider its merits.

Yours sincerely,

Jo Swinson


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