Housing experts have expressed grave concerns over the potential impact of proposed housing benefit cuts on some of the most vulnerable people in society.
Last month, a specialist housing association warned that people under the age of 35 in mental health accommodation face rent shortfalls of almost £200 a week, due to government plans to cap housing benefit for social housing tenants at Local Housing Allowance (LHA) rates.
John Healey MP, Labour’s Shadow Cabinet Minister for Housing and Planning, warned at the time that housing providers could be forced to close accommodation for the most vulnerable because of housing benefit cuts.
Brighton Housing Trust (BHT) said that its financial modelling of the impact of capping housing benefit for social tenants, including supported housing tenants, at Local Housing Allowance rates revealed that 70% of all its homes would be unaffordable to under 35s under the plan, as they would only qualify for the “shared room rate” – the cost of renting a single room within a house.
There would also be shortfalls of up to £75 per week in specialist drug and alcohol units, homelessness hostels and young people’s accommodation.
Tenants older than 35 would also be unable to afford many of the homes, although the rent gaps would be smaller.
The association warned that the Government’s offer of additional Discretionary Housing Payments to plug the rent shortfalls would be insufficient.
The housing benefit cuts, announced last Autumn in George Osborne’s budget Statement, are claimed to be aimed at bringing housing benefit rates for social housing in line with the sums paid to landlords in the private sector.
However, the National Housing Federation warns that the policy has already resulted in specialist housing providers shelving plans to develop thousands of sheltered housing properties.
The Federation’s Chief Executive, David Orr, said: “New homes for people with support needs – vulnerable people – that would be being built have been cancelled.
“The impacts of the LHA cap are real and immediate. The threat alone has caused the building of thousands of specialist homes for the nation’s most vulnerable to grind to a halt. And if the cap comes into force, our research suggests that 156,000 specialist homes could be lost.
“The PM has said that this would be a government that supports the vulnerable. But if this cap applies, society’s most vulnerable – dementia patients, women fleeing domestic violence, army veterans suffering mental health problems, older and disabled people – will be asked to find an extra £68 a week.
“We have repeatedly tried to engage the Government on the urgency and severe impacts of this cap on supported housing – we need clarity that this won’t apply to those in specialist homes today.”
Mr Osborne said the move, affecting England, Scotland and Wales, would deliver savings of £225m by 2020-21, and is part of a £12bn package of cuts from the welfare bill. Conservative ministers claim they are reviewing the sheltered housing sector “to ensure it works in the best way possible”.
But hundreds of planned new sheltered accommodation units have been delayed or scrapped owing to proposed cuts to housing benefit, and several housing associations have said they are no longer financially viable.
The National Housing Federation (NHF) has calculated that nearly 2,500 units have so far been scrapped or delayed as sheltered housing providers face losing an average of £68 a week per tenant.
Flats for elderly people and people with learning disabilities are more expensive to build and run because they provide crucial additional support. Concerns have also been raised about how the cap will affect other groups, such as women fleeing domestic violence, dementia patients, army veterans suffering mental health problems, and older and disabled people. Those affected will need to find an extra £68 a week to cover rent shortfall.
BBC News reports that a further four housing associations have shelved plans to build and develop supported housing.
- Southdown Housing in East Sussex has been forced to scrap plans for 18 units for people with learning disabilities
- Knightstone Housing in Somerset has delayed a complex of 65 homes for the elderly and 13 properties for learning-disabled people
- In Manchester, Contour Homes has had to put on hold a scheme to build 36 units for the elderly
- In North Yorkshire, Harrogate Neighbours has delayed construction of 55 extra care flats
John Healey MP, Labour’s Shadow Cabinet Minister for Housing and Planning, said: “George Osborne’s crude cuts to housing benefit could mean tens of thousands of people losing their homes, including elderly people with dementia, veterans and women fleeing domestic violence.
“The consequences of these cuts are being felt right now, with the building of thousands of new homes stopped or scrapped because of Ministers’ failure to act.
“Labour will continue to lead the opposition to these crude cuts. George Osborne must halt these dangerous plans and consult fully with housing providers to safeguard this essential specialist housing.”