Joined up thinking

The Universal Credit (Housing Costs Element for claimants aged 18 to 21) (Amendment) Regulations 2017 (2017/252) came into force on 1st April 2017.

In this post Alice Richardson considers the regulations and their incompatibility with the Government’s support for the Homelessness Reduction Bill 2017 which is currently awaiting Royal Assent.

Background

Former Chancellor, George Osborne, announced the removal of entitlement to the housing element of Universal Credit from certain young people aged 18-21 as part of the Summer Budget in 2015.

The policy had been suggested as far back as June 2012 when then Prime Minister, David Cameron, proposed removing access to Housing Benefit for people aged 16-24 during a speech at Bluewater in Kent. The idea was raised again at Conservative Party Conferences in 2012, 2013 and 2014 by which point, following some criticism, the age range was narrowed to those aged 18 to 21.

The Regulations

The Universal Credit (Housing Costs Element for claimants aged 18 to 21) (Amendment) Regulations 2017 (2017/252) came into force on 1st April 2017.  The regulations amend the Universal Credit Regulations 2013.

The changes have widely been reported as a withdrawal of housing benefit although the provisions only apply to new claims made after 1st April 2017.

Certain classes of claimant are exempt from the removal, including those who;

  • are responsible for a dependent child;
  • were a care leaver before reaching the age of 18;
  • do not have a parent living in Great Britain;
  • are accommodated in temporary accommodation under Part 7 Housing Act 1996;
  • receive DLA middle-rate care or above, or PIP Daily Living (at either rate);
  • have been subject to, or threatened with domestic violence;
  • cannot live with their parents due to a serious risk to their physical or mental health, and the Secretary of State considers it inappropriate to expect them to do so;
  • earn the equivalent of 16 hours per week at the National Minimum Wage.

 

The Department of Work and Pensions expects that around 11,000 people will be affected by the regulations by 2020/21.

The Homelessness Reduction Bill 2016/2017

The Homelessness Reduction Bill is a Private Member’s Bill introduced by Bob Blackman MP which passed through parliament with Government support and is now awaiting Royal Assent.

If enacted the Bill would make changes to Part 7, Housing Act 1996. It would place duties on local housing authorities to intervene at earlier stages to prevent homelessness and to take reasonable steps to help those who become homeless to secure accommodation. It also requires local housing authorities to provide some new homelessness services to all people in their area and expands the categories of people who they have to help to find accommodation.

Comment

Organisation from across the sector, including Centrepoint, the Chartered Institute of Housing, Crisis, Shelter, the Residential Landlord’s Association and the National Landlord’s Association have all raised concerns with the regulations.

The CEO of the National Landlords Association, Richard Lambert, was reported as saying:

 “Never mind the nuances, all landlords will hear is that 18-21 year olds are no longer entitled to housing benefit.  Faced with a young person who may not be able to pay the rent, a landlord won’t worry about the details of their life, they just won’t consider them as a tenant… However much the Government tries to make this policy more palatable by talking up the exemptions, it still leaves a nasty taste in the mouth”.

The policy was also criticised by Labour’s Shadow Secretary of State for Housing John Healey MP who said:

“This disgraceful cut to housing support will leave thousands of young people with nowhere to go. Many could end up on the streets…”

Of particular concern to many is how a young person who is unable to remain at the family home would demonstrate that to the decision-maker so as to be exempted from the cut. Anyone who has experience of DWP decision-making is likely to be sceptical of Caroline Noakes MP’s assurances that:

“…it is a question of young people informing a work coach, somebody in the local authority or a trusted medical professional of their inability to live at home because their relationship with their parent has broken down, and in those cases they will receive the exemption.

The Regulations come at a time when homelessness, including street homelessness, is already increasing. The estimated number of rough sleepers in England has increased from 1,768 in 2010 to 4,134 in 2016 according to “Rough Sleeping in England”.

In an article dated 6 March 2017 Inside Housing reported that the regulations “…could place 9,000 at risk of homelessness” and reported concerns that, if youth homelessness increases, it could “wipe out” almost all of the forecast savings.

On 5th April 2017 the Residential Landlord’s Association reported that their survey of more than 1,000 landlords found that 76% fear the measures will leave under 21s unable to pay their rent, making landlords less likely to let property to those in this age group.

On announcement of the regulations Crisis urged the Government not to continue with the “destructive policy” commenting that:

“The Government has made positive steps towards preventing homelessness in recent months, including pledging its full support for the Homelessness Reduction Bill… today’s announcement runs entirely counter to those aims and could have disastrous consequences…”

(Crisis, 18-21 year olds at greater risk of homelessness as Government announces benefit cuts, 6 March 2017)

Although the Bill arguably does not go far enough to tackle the growing homelessness crisis, it is very much considered to be a positive step. As is the Government support it has received. The introduction of the regulations, which have been so heavily criticised and risk increasing youth homelessness, does somewhat undermine that support.

Furthermore, researchers at Heriot-Watt University predict that the likely savings would actually only be around £3.3 million. Of course, if a young person becomes homeless as a result of losing of the policy this will ultimately cost the taxpayer. The researchers estimated that only 140 people would need to become homeless for the policy to cost more than it saves.

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