Last Thursday, a government climbdown was met with mass relief by thousands of people in disparate parts of the housing sector, including tenants. After months of criticism, campaigning and publicising the dangers, the decision to introduce a cap on housing benefit to supported housing, such as hostels and homeless shelters, was deferred. The local housing allowance (LHA) cap was designed to impose a standard rate for housing benefit claims, preventing high rents being covered, and standardising housing benefit rates in order to trim the welfare bill.
Housing benefit is highly complex. Even leaving aside vast geographic disparities in average rent levels, which the LHA cap only partly addresses, thousands of people across the UK claim housing benefit for different types of supported housing. Women’s refuges are covered, as are many homelessness services and supported housing for disabled and older people. Domestic violence charity Women’s Aid reported that 67% of its affiliated refuges in England faced closure if the LHA cap was applied, while 87% would be forced to scale down their operations.
With nowhere to go, the lives of women fleeing domestic violence would become even more perilous. Cuts to council budgets across Britain have already had worrying impacts on the finances and operations of women’s refuges, as funding for local services is slashed rather than salami-sliced.
Homelessness charities estimated that more than half of the 36,500 beds for rough sleepers would be at risk under the cap and due to the 1% reduction in rental costs social housing can charge, with many charities predicting huge shortfalls in income and putting expansion plans on hold. At the same time, homelessness rates in England have hit record highs, with a rise of 30% in one year alone, from 2,744 rough sleepers in autumn 2014 to 3,569 in autumn 2015.
The National Housing Federation predicted that 82,000 specialist homes would be at risk of closure if the cap and rent cut were implemented, leaving 50,000 people unable to work without support. In March 2015, the government announced a one-year deferment of the policy while the impact was assessed. Now, it has performed something of a U-turn. The cap will not be implemented in its current form, and supported housing will be safe from the LHA cap until the 2019-20 financial year.
Supported housing is not out of the woods yet. The government’s announcement offers a few years’ grace to supported housing providers. But work and pensions secretary Damian Green’s statement to the Commons says the government “will bring in a new funding model [from 2020] which will ensure that the sector continues to be funded at current levels, taking into account the effect of government policy on social sector rents … however, it is also important that supported housing should make efficiency savings in the same way as the rest of the social sector.”
How exactly can supported housing be expected to make “efficiency savings” in a housing crisis? Rental costs for premises are high, and homelessness rates are rising in line with exorbitant rent increases, especially in areas of high deprivation. Housing charity Shelter found that the fastest-rising reason for becoming homeless was the end of an assured shorthold tenancy.
Every homeless shelter and refuge I’ve visited is already operating at capacity, and staff are fraught when they explain how many people have been turned away because there are simply not enough beds. People living in supported housing are already left without the level of support they need to live independently, even before any further budget cuts.
It is a hallmark of the Tories’ approach to housing: act first and leave every other agency to pick up the pieces. The catastrophic bedroom tax was pushed through despite enormous opposition from housing associations, councils, housing specialists and the public. Yet people are still living in quiet misery as they muddle through the shortfall in benefits, and councils attempt to mitigate the impact of arrears. The axe may not have fallen yet for supported housing providers, but it’s still likely to. Refuges and shelters have some breathing space but aren’t safe yet. The government needs to admit that it spectacularly misjudged its entire housing policy.
