‘Huge uncertainty’ surrounds housing benefit reforms

An influential House of Commons Committee has accused the government of gambling with housing benefit reforms.

The Work & Pensions Select Committee report published on Wednesday says there huge uncertainties surrounding the government's reforms and questions whether discretionary funding provided to local authorities will be sufficient to help support families with acute housing needs.

The committee's report also clears landlords of widespread profiteering from the payment of housing benefit – a recent accusation from the Welfare Reform Minister Lord Freud, and Mayor of London, Boris Johnson – illustrating that most of the increase in the nation's housing benefit bill simply reflects that there are more people claiming it because of unemployment and lost income.

Anne Begg, chairman of the committee, said: "It is difficult to judge at the moment to what extent housing benefit claimants will change their behaviour as a result of these proposals.

"The government hopes that people will be able to find cheaper accommodation in cheaper areas and that private landlords will be willing to reduce their rents to Local Housing Allowance claimants, so that the new levels will not result in an increase in homelessness.

"However, it is too early to determine if this will happen in reality which is why it is hard say exactly what the impact of these changes will be."

In a recent response to a question in Parliament, Lord Freud, Minister for Welfare Reform, confirmed such uncertainty: "We are unable to provide an estimate of the number of households that may move as a consequence of the proposed reforms because it is not possible to assess behavioural effects among tenants and landlords."

The Committee's report makes some recommendations which the British Property Federation has welcomed. For example, its suggestion that local authority schemes which combine direct payments to claimants and rental guarantee for the landlord should be promoted by the government is something the BPF has watched work well in places like Edinburgh.

Ian Fletcher, director of policy at the BPF, commented: "This report encapsulates the deep concern there is amongst backbench MPs, landlords and other stakeholders over reforms to the housing benefit system. We are seeing a huge gamble with high stakes for claimants, landlords and the public purse.

"Whilst politicians on the government's benches are prepared to suck-and-see some of the immediate reforms in the name of deficit reduction, this report illustrates there is deep unease about longer term reforms such as cutting the benefit for long-term job-seeker allowance claimants and linking future housing benefit to consumer price inflation.

"I am not surprised even Conservative and Liberal Democrat MPs are asking for more information on these matters, because there has been little clarity on how each will work thus far and in the absence of transparency some signs of a rebellion brewing."

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