Since you are doing sensible things…

And hooray! The 18-21 year old restriction on housing costs in Universal Credit is gone! This seems to be a big win for common sense, backed up by major charities and other sensible folk who knew it was a ridiculous policy.

I worked for a young person’s charity a while back (when this possibility was first mooted) and it was clear even then what a nightmare it would cause. In fact, it was not only obvious, we had first hand (daily) experience of trying to convince the DWP that people were estranged from their families in order to claim income support whilst in education. This was usually young people who had been kicked out (sometimes literally) by their parents.

Sometimes getting these decisions made in the young person’s favour was easy, sometimes it was hard. But we almost always were successful. Why? Because a young person doesn’t swan off to a hostel, get accepted for housing association or council housing or sleep on the streets for no reason. They certainly didn’t do it for the pittance paid by income support, although that money meant that they could continue with their education and seek to overcome the challenges they’d met in their life so far.

I suspect this particular Easter present is a one-off, but in my own optimistic way, I hope this could be a time of government accepting sensible changes to policies for young people.

So here are some suggestions on what it can do next:

  • Increase the under 25 rate of universal credit to the same as the 25 and over rate. What happens when you reach 25 that suddenly means your expenses go up? Beats me, but the under 25/ 25 and over distinction in benefits has been around for ages. Too long. In 2018/19 the standard allowance for a single person under 25 is £251.77 a month. For someone 25 or over it is £317.82 a month. That’s £66 a month. The couples it is £103. This is for no other reason than tradition (well, and saving money, and some nonsense about needing to provide an incentive and the rates of national minimum wage). Which brings me on to…
  • Remove the minimum wage distinction for under 25s. The escalator on the minimum wage is about trying to allow companies to invest in new (young) staff. However, it can also look like a way to pay younger people less, even as they take on more and more responsibility. So having the same floor of post mandatory education income for all would be a great way to help young people get a start in life. And you know what- higher incomes means less dependency on benefits like universal credit and means potentially more taxes for the government: win win.
  • Restore the work allowances in universal credit for everyone, including young people in order to, in the words of someone I vaguely remember repeating ad nauseam, make work pay.
  • Remove the shared room rate cap for single private tenants under 35. Did you/ do you want to live in a shared property until you are 35? I thought not. The most worrying thing about this policy is that it forces young(ish) people to live cheek by jowl even if they are very vulnerable. This creates its own knock-on issues for landlords, social care, police etc. etc. The rate used to be 25, but the government made it 35 for reasons perhaps not related to sheer spite. It could be changed so the amount paid relates to the actual accommodation the person is living in- perhaps with a bedroom tax type reduction for young people on benefits who somehow convince a landlord to let them rent an 8 bedroom mansion to themselves. Oooh, someone mentioned the bedroom tax…
  • Get rid of it [the bedroom tax, weren’t you reading the last point?]. Of all the silly, pointless, nonsensical policies ever imagined, forcing people to pay because social landlords had historically not built one bedroom properties is about the worst. Or forcing them to pay because they have health problems and need to use a different bedroom to their partner. Or so on. Social landlords didn’t give young people (or not-young people) bigger homes because they were frittering away their stock, they did it because that was all they had and there was a housing need to be met. If the government wants people to live in the right size houses it could build some.
  • Get rid of the 2 child limit. Yes some younger people have more than two children. Do we even need to discuss this one? The one with the form to tell the government that your child is the outcome of a rape? No, good.
  • And the benefit cap. And the other benefit cap. Yup, both of them.
  • Do you have any you want to add? Let me know and I’ll think about putting them in.

Now, here comes the punchline. With the exception of the minimum wage change (which, I repeat may save the government money) each of these would end up costing the government -or at least the benefit budget- money. The thing about the under 22 housing rule was that it was so poorly thought through and so few people actually were caught in it that it most likely cost more to administer than it saved. It certainly will have cost more when looked over the whole of government’s budget, especially when social care, homelessness, family support, etc. budgets are considered.

This policy was one of those that was created to meet a perceived problem, not a real one. The government could say they were doing something about the legion of indolent young people who could simply just move home, without recognising that this was actually a tiny to non-existent part of the overall number of claimants.

So let’s celebrate that the government has seen sense. But the sense that they have seen is that this policy was costing them money. Until they start working their way through the list above I’ll not be convinced they have suddenly decided to support young people through the benefit system.

Supported housing- details, details, details

Forget what the calendar says, last week was the one for fireworks. This is the week for detailed policy analysis (yay!). The announcement that the LHA cap wouldn’t be imposed on social rented housing was (as far as I could tell) universally welcomed. However, the next step is to see what is being proposed in its place.

It is hard to think of a more foolish attempt at supposedly saving money than trying to pretend people needing supported housing (defined widely) could only receive the LHA amount (the 30th percentile market rent) for their area. The supposed top up fund was poorly thought through and led to a lack of confidence in the sector about how it would fund new housing when it couldn’t be sure how much income it would receive in the long run.

But let’s first take a couple of steps back and work out how we got here.

As the population ages (something Brexit may well hasten) more of us are going to need housing that is more than a roof and some walls. We might need specialist equipment, alarm systems, help nearby, visits or adaptations to suit our needs. At one point the solution to this issue was institutional and one size fits all. Now people rightfully expect that their needs are provided for, but that their freedom and independence is respected. Instead of care homes people are more likely to want to have homes that support their needs without institutionalising them.

I doubt there would be much discussion about there being a need for housing tailored to individual’s needs and a mechanism, through the state if required, to both provide appropriate housing and the additional support a person requires.

Housing-related costs have traditionally (in England) been provided by housing benefit with a means test and some arbitration system for unusually big costs. Other costs, such as general care and support visits was paid for through other, locally administered schemes, like supporting people or the general social care budgets.

This is one of the reasons it can be frustrating to hear politicians bemoaning the size of the housing benefit budget without proper reflection on what it actually contains. Paying for supported housing through this budget is a choice, but really only an accounting one. If it wasn’t through housing benefit then it would have to be paid through another route, but claiming housing benefit is growing beyond all proportion (and insinuating that is solely due to unemployed working age jobseekers) really does a disservice to what it is actually paying for. To repeat, paying for supported accommodation is a cost that will keep on growing in the short and medium term, no matter what schemes the government try to insist on imposing on working age tenants.

But, of course, housing benefit is on the way out. It is being rolled into the super-colossus of universal credit, the benefit that is doing so well at winning hearts and minds at the moment.

So getting the government to stop, shake their head and then turn on the heel for an LHA cap, not just for supported housing but all social housing, has been a massive achievement for the sector. That said, I doubt there would have been much of a social housing sector, particularly for supported accommodation, if they hadn’t been successful.

The government have stepped back from the brink, but what are they proposing instead? On Tuesday they announced their plans and things are about to get complicated…

They’ve tried to split supported housing into three main groups:

  • Sheltered and extra care housing, where tenants can receive a new payment (noted as “through the welfare system” but it is unclear (to me at least) if this is part of universal credit) called “sheltered rent”.
  • Long term housing, which is meant to meet the needs of people who will need significant support in the long run, such as those with learning difficulties or mental or physical ill health. This will be provided through universal credit, but with no upper limit on payments although the government is still mulling and asking for advice on “cost control measures”.
  • Short term housing, such as accommodation for people experiencing homelessness or people (overwhelmingly women) fleeing domestic violence. This is proposed to to be a grant payment made through local authorities. So local councils will have to negotiate with central government about their local needs in order to secure their bit of the pie and then negotiate with providers in order to fund them.

Taking the last point first, I can see the sense in directly paying for short term housing. From my housing benefit assessment days I remember the succession of 2 day claims for hostels and the local women’s aid, usually with no proof of income or details to really decide a benefit claim. Of course, any reasonable authority simply paid up- why would anyone stop to try and enquire further on a benefit claim for a woman fleeing domestic violence? So the whole thing was a bit of a paper exercise. A 40 page paper exercise that had to be completed as part of the stay. Not something you want to be doing if you are homeless, fleeing violence or trying to overcome an addiction.

But there are some issues with the grant approach. Firstly, government gives grants but it can also take them away. At least the benefit system is a right rather than a process of continuing negotiations, especially in the context of austerity. With priorities changing and if there is an insistence on delivering savings then grant funding can always be cut, either the total amount England-wide or the amount paid by the local authority to each individual provider.

There is also the tricky issue of assessing needs between areas. Not everywhere is lucky enough to have a women’s aid and many women experiencing violence need to leave the area completely to get away from their abuser. So does the funding go to their “home” authority or the authority they are staying temporarily in?

Some national charities have already commented that payment through local authorities may negatively affect them. This is for two reasons. Firstly, local authorities will each incur costs that they will want to recoup through the funding grant. Secondly, local authorities are unlikely to want what remains of their allocation going to fund the national management of organisation; they’ll want it spent in the local area. Thirdly, and they haven’t said this outright, local authorities may prefer to fund local organisations, especially if they know them and get on with them, rather than the big boys who operate all over the country. So local funding tips the balance in favour of local organisations without management costs elsewhere in the country and perhaps with people they know running it or sitting on management boards.

This all means that fateful and fashionable word: “disruption”. If this is a big enough issue then national organisations could choose to become umbrella bodies rather than directly manage services, spinning local provision out to local organisations. They may also need to have a think about how they use charitable donations. No-one wants to know that their monthly direct debit is paying for a middle manager to attend a meeting with a middle manager from a local authority or central government, but that is often what they do. So it might be that they have to push hard for more charitable donations in order to do the advocacy and campaigning that go alongside actual provision.

Moving on, perhaps you had to read the definitions of long term housing and supported/extra care housing a few times to work out the difference? I know I did and I’m still not 100% sure. How exactly government plan to differentiate between the two, especially as there could be quite a big jump between the payments received for each, will be something to watch out for.

I’m going to stick my neck out and say that there will be appeal cases where providers have tried to claim a particular tenancy is long term housing rather than supported housing/ extra care and other cases where a landlord is trying to claim their housing is supported housing whilst decision makers disagree. Thinking back on the housing benefit system there seemed to be an large number of cases (at least for a few years) where what counted as “exempt accommodation” or provision “of care, support and supervision”, particularly by third parties, was debated again and again. So I think there will be a similar pressure to define both what housing can be included in any of these categories and then which are “long term housing” and which are “supported accommodation/ extra care”.

If this is a matter for universal credit decision makers then we have a whole other issue to consider, which is how we think people sat many miles away can make decisions about local areas. At least with housing benefit the authority would either know the organisation, get them in for a chat or visit the housing to look at it. I doubt universal credit decision makers will do that- they’ll just look at the details on paper and come to a view. The outcome: more appeals.

What we don’t know yet is what the payment gap between sheltered/extra care housing and long term housing will be.

The government have proposed that “sheltered rent” should be the formula rent (basically ratios of local rent and national rent levels and the estimated house price relative to the national average) plus or minus 10% plus eligible service charges. All of this is set to an overall cap, but we don’t yet know what that is and it is likely to be calculated on a local basis.

So the big question mark is will this be enough to pay for decent accommodation and secure new investment in the kind of housing people will need in the future? I’m guessing that there will be finance staff looking at spreadsheets up and down the country this week trying to work that out. The real difference is the extra 10%, but is 10% on top of the formula rent enough to imbue confidence across the sector? I don’t know, I don’t have access to the data, but as soon as those spreadsheets start coming up with an answer I am sure we will hear about it.