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Reforming the spare room subsidy rules - Liberal Democrats seek to protect the most vulnerable

September 8, 2014 11:11 AM

Affordable Homes Private Members Bill

After topping the Private Members Bill ballot in June 2014, Andrew George has brought forward the Affordable Homes Private Members Bill.
The Bill would reform policy on the spare room subsidy to protect the most vulnerable. We believe that the aims behind the policy were correct. It is right to help ensure that scarce housing is used as efficiently as possible and that private and social sector tenants should be treated fairly and equally.
However, the evidence from the interim evaluation of the policy shows that it hasn't been working in the way in which it was intended. This is why we believe that the rules should be changed so that existing tenants aren't penalised when they cannot move into smaller accommodation because this is not available or where there is a serious medical reason for an additional room.
Evaluation findings:
In the first six months of the policy, only 4.5% of affected claimants were reported to have downsized into a smaller social-sector property.
The researchers also found little evidence of claimants finding work/increasing their pay or taking in a lodger
Tenants affected were making cuts to household essentials and incurring debts, with 57% of claimants reporting cutting back on what they deemed household essentials
Total rent arrears held by landlords increased by 14% between April and October 2013, although this can't directly be attributed to the spare room subsidy because of other wider changes and wasn't accompanied by an increase in evictions.
LAs have reported concerns about the lack of long-term certainty around Discretionary Housing Payments (DHPs).
There were particular issues around the use of DHPs to support disabled people affected by the policy. Many disabled people in adapted properties weren't being awarded DHPs because LAs were applying a means test which took their disability benefits into account. Local agencies also expressed concerns that people with mental health problems may not have been applying or might have been failing to provide sufficient evidence.
Timeline

2012 - Welfare Reform Act
Autumn 2013 - Party conference
Lib Dem conference representatives vote overwhelmingly to review housing benefit rules.
They called for an immediate review of the impact of the policy and want a review to look at the money saved, costs incurred and the affect on vulnerable tenants.
June 2014 - Andrew George tops Private Members Bill draw - June 2014

July 2014 - Danny Alexander's op-ed in the Mirror on spare room subsidy reforms
A Government report produced evidence that changes to spare room subsidy are not delivering the outcomes that we need. The report showed that as few as 1 in 20 of affected claimants have downsized. The evidence clearly shows that we need to change direction.
Our plans would see those already in the social rented sector only lose their benefit if they are offered a suitable smaller home and turn it down. It would also permanently exempt disabled adults who need a spare room or who live in specially adapted properties.
July 2014 - Introduction of Affordable Homes Private Members Bill by Andrew George MP
5 September 2014 - Second reading Affordable Homes Private Members Bill

Q&A
Why are you doing this now?
We have been monitoring the introduction of the policy carefully. The results of the interim evaluation have now been published and they show some concerning findings such as that 57% of claimants reported cutting back on household essentials. We have protected the vulnerable so far but we now want to reform the policy to protect those people for the long term.

Why haven't you implemented these changes in government?
We have protected vulnerable groups by providing hard cash for hard cases - £180m in Discretionary Housing Payments last year - not all of which has been spent by councils. We have been monitoring the introduction of the policy carefully and have recently received the interim results of the initial evaluation of the policy. These show that the policy has had an impact on disabled people who need a spare bedroom and we want to ensure that these people are exempted. We also want to ensure that those who have tried to downsize but have not been able to are not penalised. We will make the case to our coalition partners that the policy needs to be reformed.

The Tories don't agree with you do they?
We will continue to make the case to our coalition partners that the policy needs to be reformed. If we do not reach agreement in this parliament we will commit to these reforms in our manifesto.

What about other groups who are affected (e.g. parents who don't live with their children but have them to visit regularly)
There would still be a (more limited) pot of Discretionary Housing Payments available for hard cash to cover hard cases. It is already the case, however, that private sector tenants have to pay for a spare bedroom in this circumstance.

Not all disabled people will be covered by your policy?
We are exempting those disabled people who need a spare bedroom or those who live in specially adapted properties. Not all disabled people will need a spare bedroom. We will consult on the detailed guidance.

What about all the other housing benefit reforms? This change doesn't go far enough.
Between 2000 and 2010 expenditure on Housing Benefit grew by around 50% in real terms. This is clearly unsustainable, particularly at a time when we need to reduce the deficit and build a stronger economy. That is why we have made reforms to the housing benefit system, but it is also why we are working to build more affordable homes. There are also still Discretionary Housing Payments available for vulnerable people.

You are penalising housing associations who can't build more houses. That isn't fair, and will mean that they have less funding to build more houses in future.
We recognise it is not fair for people to have a reduction in their housing benefit if they have tried to downsize but have not been offered an alternative property. We believe there needs to be a small incentive on housing associations and local authorities to offer people reasonable alternative accommodation, including encourage people to downsize in order to free up homes for those on housing waiting lists or those living in overcrowded accommodation. This will also be an incentive to look at ways some local authorities have tackled the problem. This includes opportunities to convert larger properties or to encourage house swaps or 'rent a room' schemes, which help to prevent homelessness, and encourage people to think about options for getting extra income.