Welfare Reform Bill

moved Amendment No. 81: 81: Clause 29 , page 20, line 21, at end insert— ““( ) The appropriate maximum housing benefit shall only vary for those aged under 21.”” The noble Lord said: My Lords, this amendment seeks to reduce youth homelessness, remove disincentives for young people to leave hostels and supported housing and to get jobs, and to enable vulnerable young people to obtain and retain somewhere to live. It would achieve those results by moderating the impact of the controversial single room rent, in future to be called the shared room rate, which limits the amount of housing benefit for those under 25 and creates a shortfall between what a tenant must pay in rent and the benefit they receive. The Government’s overhaul of the housing benefit system, with the introduction of local housing allowances after proper evaluation of its Pathfinders, is very welcome but, in respect of younger people, the arrangements continue to be flawed. I hope to demonstrate that the Government’s insistence to date on retaining the highly problematic shared room rate is based on a misunderstanding of the ways in which the private rented sector is now working. The amendment’s progress has exemplified very well the revising role of this Chamber. Noble Lords have brought their knowledge and presented expert evidence from concerned organisations outside this House—in this case, Shelter, Citizens Advice, the Scottish Council for Single Homeless, the YMCA, Centrepoint, the Foyer Federation, the British Property Federation and others. The amendment also takes account of discussions in the other place and represents a compromise from the amendment proposed there. After the Committee stage provided the opportunity for a detailed discussion with a powerful speech from the noble Earl, Lord Listowel, and support from the noble Lord, Lord Oakeshott, and others, and after a helpful meeting with the Minister, I am returning to the issue with some hope of persuading him that it would be entirely sensible for the Government to take this amendment on board. I am encouraged to be optimistic by hints from the relevant government department—the Department for Communities and Local Government—which is responsible for homelessness policy. Earlier this month, that department published its policy briefing, Tackling Youth Homelessness. This draws attention to the problems created by the single room rent and concludes: "““The Government is currently looking at this issue in the context of the Welfare Reform Bill””." In the hope that the Department for Work and Pensions may be able to assist the Department for Communities and Local Government on this, perhaps I could spell out the reasons why I believe that the objections to this amendment are unfounded. It is said that if housing benefit covered the rent for a self-contained flat, those under 25 would reject shared accommodation and go for the more expensive option of their own flat. This would not only cost the state more but would put the individual deeper into the poverty trap, with a level of benefit that they could not match if they got a job. Moreover, it would mean that those on benefit were enjoying higher housing standards than most young people in work, the majority of whom are in shared accommodation. This analysis misunderstands the realities of the housing market. It is possible for someone on housing benefit to obtain shared accommodation only if landlords let this form of housing to housing benefit claimants. In some areas, there is no tradition of shared lettings—for example, in parts of Scotland and in many rural areas—so such accommodation simply does not exist. Elsewhere, where there are such lettings, these are seldom available to those on benefit. In a recent Shelter survey of landlords in Brighton, only 15 per cent were willing to let to anyone on housing benefit, let alone to those under the age of 25. In most places where landlords are letting shared housing to a group of young people, there are plenty of students and young professionals needing accommodation, reflecting the decline in the number of first-time buyers in today’s overheated market. As a father of four young people who have all occupied shared accommodation in the private rented sector in four different places, both while at and after leaving university, I am very familiar with this market. Landlords like these tenants because parents such as me can be required to act as guarantors of the rent and will often help with a deposit and rent in advance. By contrast, landlords do not want the risky prospect of someone on housing benefit, particularly if that very low-income tenant faces a shortfall between his rent and his benefit. Many landlords blatantly declare, ““No DSS””— ““No DWP”” has not yet caught on—while the others are very likely to deploy the same policy without announcing it. There are other factors relating to the supply of shared housing for benefit claimants. Becoming part of a group of flat-sharers is natural and easy for my children and their friends. It is utterly different for the lone individual—someone leaving prison, leaving a violent partner or leaving specialist accommodation. Where an existing group of tenants is looking for a fellow housemate or sharer, the Shelter survey shows that only 7 per cent would ever consider, let alone accept, a housing benefit claimant to join them. Meanwhile, there have been big changes in the private rented sector over recent years, as research at York University has shown. The number of lettings in the old HMOs—houses in multiple occupation—has declined; many have been converted into self-contained flats. The Housing Act 2004 is now beginning to bite with its requirements for higher health and safety standards for HMOs, so the current decline is likely to accelerate. Conversely, there has been an explosion in the development of small flats through the phenomenal growth of the buy-to-let market. Saturation has been reached in some towns and cities, with small self-contained flats standing empty but beyond the reach of the under-25 year-olds, however great their needs, because of the shared room rate restriction. Do the statistics confirm the dearth of available shared accommodation for those on housing benefit? The answer is a resounding ““yes””. After the introduction of the single room rent a decade ago, the pressure to go into shared housing would lead one to expect a rise in the numbers moving into this kind of accommodation, but the facts show the exact opposite. Numbers have fallen dramatically from 33,000 people in 1997 to about 12,000 today. In part, as the noble Lord, Lord McKenzie, suggested, this may reflect the fall in the number of unemployed young people, but the fall in shared lettings to housing benefit claimants also comes at a time of increased homelessness, which strongly suggests that those at the bottom of the economic ladder simply cannot find any shared housing for which they can obtain the requisite housing benefit. Helpfully, the definition used for the new shared room rate for the local housing allowance is broader than for the single room rent in the past, but the DWP’s research in the local housing allowance Pathfinder areas shows that, in fact, this well intended change has not made any difference. While there are self-contained flats with the level of housing benefit capped in the new scheme at the median, preventing any extravagance by tenants, shared housing, however it is defined, is not there for claimants to find. What about those who are already in a flat, paying their own way, who lose their job? Because of the shared-room rate, they will be expected to downsize into shared housing while they seek a new job. Since we know that the chances of finding such housing are remote, they will probably have to stay where they are and face shortfalls in their rent, which will virtually halve their income from jobseeker’s allowance. This, of course, is a recipe for arrears, eviction, then homelessness. The chances of getting back into work are dramatically reduced by this unreasonable and unrealistic benefit restriction. What would it cost to sort this out? The Government accept that £20 million is about right for abolishing the single-room rent, provided the change does not increase demand. Out of a total budget for housing benefit of more than £12 billion, this figure is not too significant. However, Amendment No. 81 recognises that the Government do not want to go the whole way yet in removing the limitation entirely, so this amendment goes for a compromise by confining the change to those who are aged 21 or over. The Minister agrees that this reduces the headline figure to £10 million, but he argues that 21 is an arbitrary age. There are logical grounds for using 21 as the age when the position might change for claimants. The minimum wage goes up at age 22, and at present the single-room rent itself uses 21 as a cut-off for a special exemption that allows those leaving care to go into self-contained housing. Care leavers would not lose this entitlement after age 21 if the amendment were accepted. I would add that using the half-way house of age 21 would limit the Government’s exposure to the risk of higher costs. It allows the ground to be tested before moving on to complete abolition of this restriction on benefit if the results are positive. Even if the change costs more than the £21 million estimate, account must be taken of the savings and benefits as well. Leave on one side the relief of homelessness and an end to the miseries of sofa surfing, which makes getting a job so difficult, purely considering the cost-benefit equation, the amendment would have some significant offsetting gains. Currently the inability of young people to move out of specialist housing, hostels and supported accommodation means they unwillingly engage in bed-blocking—taking up places, which others desperately need when they are ready to move out. As the YMCA has explained to us, it costs £350 per week to retain people in housing with specialist support. The cost to the state of covering in full a rent of, say, £100 per week, would be far, far less. By enabling one person who is ready for independence to move on, the providers of supported housing can take in one more homeless single person to go through the process of support and training. This problem of expensive bed-blocking is affecting many of the organisations taking in homeless young people. The amendment would have the very great value of removing this major barrier to preventing those under 25 moving onward and upward. I apologise at this late hour for laying out my case in some detail. I tried to marshal the arguments that will lead at last to a reform that will change the lives of many thousands of young people unable to secure a place to live. I know that it is late, but unless the Minister feels able to give some hope of movement on this one, I shall test the opinion of the House. I beg to move.