My Lords, Amendment 27 stands in my name and that of my noble friend Lady Sherlock. This is also a rerun of an amendment that we moved in Committee, then part of a trio of similar amendments, so I will be brief.
The amendment would cause those families to be outwith the benefit cap if placed in temporary accommodation under the 1996 Housing Act. Regardless of whether the benefit cap has played a role, local authorities are legally obliged to rehouse families who are homeless through no fault of their own, are vulnerable in some way or are in priority need for rehousing. Families will be placed in temporary accommodation while a council decides whether it owes them a rehousing duty and then until a settled home can be found. The wait can be considerable, as can the costs. Invariably the temporary accommodation is leased by councils from the private sector, which charges the tenant a rent to cover these costs and expenses. These costs are commonly paid for by housing benefit with some top-up from DHPs.
9.45 pm
Temporary accommodation is generally leased at a premium, placing a considerable burden on local authorities. We know that councils are already struggling to secure enough temporary accommodation as a result of the combined effect of limited funding and a shortage of self-contained accommodation. This is already leading to an increase in bed and breakfast use or people being rehoused away from their local area. The lower benefit cap will increase demand for homelessness services and exacerbate the pressure on the local authority supply of temporary accommodation. With more families affected by the cap, local authorities are likely to be forced into further subsidising the cost of such temporary accommodation. This will be difficult for cash-strapped councils, increasing the incentive to place families in the cheapest areas, far away from their support networks.
It will also make it harder permanently to rehouse homeless families, as the benefit cap will make alternative housing options unaffordable. For larger families, even social housing will be subject to the cap. The policy therefore risks the perverse scenario in which families are made homeless because of the benefit cap and trapped in the limbo of temporary accommodation by the benefit cap at the expense of the public purse. The amount that can be reimbursed through the local housing allowance is limited, which means that other costs over and above that amount must be met by local authorities. In some cases this will come from funding for discretionary housing payments but increasingly that seems to have been allocated—just this evening my noble friend has used a chunk of it—and it is a diminishing fund.
Our amendment would exempt newly homeless households from the benefit cap. This will allow councils to continue to procure nearby temporary accommodation and make it easier for them to move households into affordable accommodation. It will also help councils focus their DHPs and their own budgets on homelessness prevention. If the Government are serious about cutting back on public expenditure associated with the benefits system, and in targeting the benefit cap at families in a position to make choices about where they can afford to live, it is hard to see why they should argue against exempting homeless families being housed in temporary accommodation.
The Government resisted this approach previously because they said there would be no incentives for families to move into work; that they would stay put in their temporary accommodation and avoid the cap. What is the evidence for asserting that families would react in this way? Why would not families do their best to move out of temporary accommodation and move to more settled, better quality accommodation with more secure arrangements for as long as they are available, where a family could put down its roots? It is almost as though the Government are seeking to take advantage of people who find themselves homeless and consequently face an increase in benefit entitlement which draws them into the cap with work the only route out. They will be trying to find work at the same time as looking for permanent accommodation, potentially in an unfamiliar area.
It is not that households are making extravagant choices about their accommodation—they have to take what is on offer—and surely exempting these situations from the benefit cap is the fair thing to do. I beg to move.