A couple will three children will get nothing in Housing Benefit by 2027* and due to the Tories Overall Benefit Cap (OBC) policy. This will see a catastrophic homeless epidemic in the UK possibly making tens times more homelessness than we have today.
Here I present some figures which are all facts and all known facts today that will explain why we will inevitably see a homeless epidemic and mass evictions from even the cheapest council housing and even council landlords will be operating what we know as NO DSS allocation policies. This not conjecture or scaremongering it is, regrettably all logical and predictable and inevitable.
Chart 1 – The percentage of average social rent paid by Housing Benefit 2019 – 2039
Today in 2019 the average social rent for a three-bed property is £102.59 across the UK and is the (minimum) size of property the two parent three child household have as their housing need. Yet because of the way the Overall Benefit Cap policy works the maximum Housing Benefit the 2P3C household receives is £61.17 per week and thus Housing Benefit pays 60% of the rent.
By 2021 Housing Benefit will only cover 43% of the average social rent as the maximum HB will be £46.78 per week and the average social rent will be £109.26. Three issues combine for this to happen:
- The OBC limit is a constant cap that stays at the same figure
- Welfare Benefits are to rise in line with CPI inflation (2.2%)
- Social housing rents are to rise by 3.2% in England [CPI+1%]
Each subsequent year the same three factors above occur and as the Chart above shows in 2023 the 2 Parent with 3 Child household get just 27% of their rent paid in Housing Benefit as the maximum Housing Benefit (or its UC equivalent) due to the OBC policy is £31.75 per week and the average social rent will be £116.37 per week.
Rather than creating a separate chart for each household I have included a data table below which has the percentage of average social rent that Housing Benefit will pay for each household type.
Table 1 – Percentage of social rent HB pays according to household composition
The heading 1P3C means the 1 parent 3 child household; 2P1C is 2 parent 1 child etc., and the methodology is the same as explained above using CPI of 2.2% thus benefit income increases 2.2% each year and social rents increase 3.2% each year.
What the data table reveals is ever smaller families cannt afford the cheapest rented housing and the cheaperst social landlords cannot afford to accommodate the benefit tenant household.
That means existing tenants will build up arrears rapidly and be evicted. It further means that council and housing association landlords will not allocate the 400,000 or so new tenancies they have each year with the benefit household (aka NO DSS).
Both the existing tenants and prospective tenants will be homeless because of this and hence the homeless epidemic will happen … unless the Overall Benefit Cap policy is abandoned as this is what causes the homeless epidemic (with help from inflation-busting council and housign association rent rises.)
Last week saw two significant and linked housing and bnefit announcements. The DWP did a U-turn on child tax credits for the 3rd and subsequent child if they were born before April 2017. This means those households keep the £53.50 per week / £2,780 pa Child Tax Credit from February onwards yet because the Overall Benefit Cap policy is a zero sum policy it means they can receive £53.50 per week and £2,780 pa less in Housing Benefit.
The second was the Shelter Commission Report that called for government to invest £10.7bn per year for the next 20 years (until 2039 – the same as my data table) to build 155,000 new homes per year at the social rent level. Yet what is the point as these 3.1 million new social rent homes are unaffordable to the tenant in receipt of social security benefit and again due to the OBC policy aided by inflation-busting social landlord rent increases.
YET the great and the good of the housing and homeless sectors and the MPs and former MPs and the economists who formed this Shelter Commission totally ignored the Overall Benefit Cap in their considerations and figures. For this reason the Shelter Commission Report and its conclusions and recommendations are literally not worth the paper they are written on and the Shelter Commission Report (SCR)despite its hyperbole and high-profile is utterly meaningless.
The SCR was an attempt to solve the UK Housing Crisis and it cannot be a solution to it. The OBC as the figures which are facts and undeniable facts show that the UK Housing Crisis is about to get much, much worse as evictions from social housing and NO DSS being the norm for all new allocations means that the UK Housing Crisis is more correctly called the UK Homelessness Crisis and IF the three critical factors remain of (i) the cap stays and stays a constant, and (ii) benefits are uprated by CPI and (ii) social rents are uprated by CPI+1% then UK homelessness could easily rise ten-fold over the next ten years!
The current Government has a target to cut rough sleeping (just one aspect of homelessness) in half by 2022 and eradicate it altogether by 2027. That aim and policy initiatives to get there are also meaningless due to the OBC policy.
Council and housing associations – the social landlords as they are known – have almost 40% of all their housing as a 3 bed property or larger. Yet within a few years no benefit household that would fully occupy a three bed house can afford one due to the massive cuts in housing benefit caused by the OBC.
As far as all the hundreds and hundreds of thousands who will be evicted from the social rented sector and face NO DSS from the scial rented sector (and the private rented sector) one question – Where the hell are they going to live?
The answer can only be temporary homeless accommodation such as hotels and bed and breakfast hotels. And the only way they can get out of that unsuitable and incredibly costly accommodation is to get a job. It is not scaremongering or even flippant to say that the Tories OBC policy creates an environment of NO JOB, NO HOME as that is exactly what it does create and obviate.
In conclusion, this also means the housing safety net created as one of five central and interrelating pillars of the 1948 Welfare State is dead. No other element of the venerated Welfare State would be allowed to be changed with such ignorance and such neglect. This OBC policy not only increases homelessness ina way never seen or even imagined before it will massively increase costs to every other part of the public sector that the taxpayer pays such as social services, care sector, the health service, the criminal justice system, the education and just about every other public sector activity.
This is madness and unbelievable neglect by politicians in government and opposition and by the so-called ‘great and good’ of housing, homelessness and wider social welfare policy. The Overall Benefit Cap policy has to be stopped and stopped yesterday.
* ‘Nothing’ except a token 50 pence per week which is what the OBC policy gives