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The Chartered Institute of Housing is the independent voice for housing and the home of professional standards

No-go housing areas where there’s no one left to serve you your cappuccino

18/02/2011


Sarah Webb, Chief Executive, talks about the effects the Welfare Reform Bill will have on Housing Benefit

I’ve just recorded some comments for the BBC on David Cameron’s Welfare Reform Bill and, as usual in these situations, months of careful research and analysis (in this case by CIH’s world expert on HB, Sam Lister in partnership with Shelter) gets squeezed into one 20 second sound bite. But that’s OK if it helps the wider public understand the implications of the current proposals. Who wouldn’t agree with Cameron’s ‘work should always pay’ agenda – and CIH has been calling for HB reform for years – but some of the consequences, albeit unintended, of the current reform ideas will surely work against this ambition.

Let’s be clear – most HB goes to people already in low paid work – only 12% of HB claimants are unemployed. The CIH/Shelter modelling clearly shows that the proposed HB caps and the move to basing payments on CPI rather than RPI will result in thousands of households being unable to afford their housing costs and therefore having to move to a cheaper area to live. You may think this is fair – very few of us can afford to live in the place we would love to – but the reality of this policy for low paid families is that they may also have to give up their job. Moving to an area of low priced housing that you can afford under the new proposals may well result in you moving to an area with few jobs and already high levels of unemployment – and, if you currently live in Westminster and the only place you can now afford is Hastings - you wont be in a position to commute for your £6 an hour job back in the capital.

Apart from the potentially destructive impact this will have on the individual families concerned, the other missing part of this jigsaw is the abandonment of from the concept of mixed communities. The reforms will clearly result in ‘no go’ housing areas where only wealthy people can live – and Westminster surely needs its share of people to work in coffee shops, to clean offices, to see children safely across the roads etc. I thought we all bought into Bevan’s concept of a ‘living tapestry’ in which the doctor, the nurse and the patient all lived in the same community. And, incidentally, there is absolutely no sign of rents in the private sector coming down in response to these proposals as is suggested by the government – and don’t take my word on this – look at the surveys done by PRS landlord organisations. Such a market response may be a theoretically possibility but the reality is that the current over-demand of households without a home (in part because they can’t get a mortgage) makes this extremely unlikely in many areas.

So, yes, lets tackle worklessness and lets take our share of the deficit reduction pain but, in so doing, lets revisit some of the elements of this reform package – in particular the HB caps (which need to relate to the actual market) and the move away from RPI-based payments. We must not break the link between actual housing costs and the support payments available to low income and vulnerable families – doing so will result in more homelessness and more unemployment.


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