Diary of a Sutton Councillor

Evidence on welfare reform impacts at the London Assembly

assembly

I had been invited to give evidence on the impact of the Welfare Reforms on London Boroughs to the London Assembly Housing Committee on 12th February. I attended as representative of a Liberal Democrat-run borough alongside my Labour counterpart from Hackney, Karen Alcock, and Conservative Dudley Mead from Croydon.

Private rents increasingly unaffordable

Despite our political divergence, it was clear that we were all experiencing similar effects as a result of welfare reform. We were all seeing increased demand for private rented accommodation, but increasing rent levels are putting inner London properties outside the affordability of the majority, and as a result outer London boroughs were seeing increased migration from inner London as people seek to take advantage of the lower rents here. However even in outer London the discrepancy between Local Housing Allowance rates and actual rents was proving too large and this means that tenants are being forced into overcrowding as they cannot afford the larger houses they need. In Sutton the difference between the Local Housing Allowance rate and actual rents averaged 14% – a gap that is just too wide for families to cover, or for the Local Authorities to plug. I concurred with Cllr Alcock’s description of the pressure on the private rented sector as ‘the Perfect Storm’.

It is also clear that working people are finding the rents as unaffordable as those totally dependent on benefits.

I was able to point out that Local Housing Allowance is meant to be set to cover private rents falling within the 30th percentile of local Broad Rental Market Areas (BRMA), however steeply rising rents meant that properties renting in the LHA range were becoming rarer than that. I also questioned the accuracy of the calculation of the BRMA rates on which the LHA rate is set. If the basic calculation is flawed, then the books don’t balance.

Children & disabled face biggest impact

Another undesirable effect of the ‘Bedroom Tax’ and transfer of the Council Tax Reduction scheme from central to local government is the disproportionate impact on households with a disabled member, and families with children, most particularly single parent families. In Sutton we have 350 families who are impacted by this double whammy to the tune of more than £25 per week.

Increased pressure on cash-strapped councils

The fallout as a result of these pressures is that we are seeing an increase in people struggling to pay their rent and council tax, and starting to fall into arrears, and an increased number of applications for Discretionary Housing Payment Support and to our local Crisis Loan and Grant scheme. In Sutton we are putting increased effort into helping to prevent tenants falling into arrears, and invested in a Welfare Reform  Outreach Officer to work with those people affected by the reforms and help them budget and adapt to the changes. However more and more work is needed to be put in to support those affected, whilst at the same time councils are facing cuts to the funding available for this work, as announced by Eric Pickles recently. The pressure on staff to administrate and mitigate these new burdens passed on from central government was echoed by my colleagues giving evidence. Then there is the increase in homelessness applications, and the additional work necessary to prevent homelessness and maintain our good relationships with private landlords by offering financial incentives. And all of this pressure is likely to increase with the introduction of Universal Credit.

Benefits of welfare reform hard to identify

One Assembly member asked what we thought were the benefits of welfare reform, and there was a long period of silence. Eventually I volunteered that we had seen an increase of people getting into employment in Sutton, however it would be hard to directly attribute this to welfare reforms because under our Opportunity Sutton Economic Programme we have been making a concerted effort to bring new jobs into the borough through inward investment, and to skill-up our residents to enable them to take advantage of those employment opportunities through our Skills Matching work.

Broken communities

I was keen to highlight the equally damaging, but less easily quantified social impacts of the reforms. The financial pressure on families to seek out cheaper accommodation is leading to the break up of communities and local support networks. Families are losing the informal childcare arrangements with family and neighbours, they are finding it harder to maintain school places, employment and health & social support. They may find themselves paying less rent, but have additional travelling costs to work or education. This is particularly the case for low paid workers, who are effectively being banished from inner London.

Financial stress can manifest itself in domestic violence, relationship breakdown, debt and mental health issues. If the problem then has to be picked up by the NHS, the Police or social workers, then the reforms are a false economy and are just cost shunting onto other services. It can also unravel the complex multi-agency work being done under the Troubled Families schemes. We can also expect to see an increase in anti-social behaviour where communities are broken up and people feel less connection to an area.

The solution: more housing

When asked what the solutions were, all three boroughs agreed that increasing the supply of housing across all tenures was the key, as the issue was essentially affordability of housing. We also agreed that the way to assist in that was to devolve greater freedom and powers to Local Authorities by increasing our borrowing powers, and having less caveats on grants & borrowing. I disagreed with my Conservative colleague that the planning system was a blockage, as in Sutton we offer a facilititive approach with the aim of bringing forward development that works for the area, as well as for the developer. The Hackney member & I also agreed that councils could take over the work programme as we have shown in many areas that local government can implement these initiatives more efficiently and cost effectively than central government.

I additionally pointed out the disconnect between rent policy and housing policy which needed to be properly addressed to enable new measures to work effectively.

Our evidence was part of a piece of work being done by the London Assembly Housing Committee and a report will be forthcoming on completion.

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February 17, 2014 - Posted by | Meeting | , ,

1 Comment »

  1. Well it’s good to see a politician who believes in clear communication with people. Housing and rents are major problems in the whole south east and I agree the issues need to be addressed and more housing is an obvious start

    Comment by Gazzie Harries | February 28, 2014 | Reply


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