Housing benefit changes The impact in London West London Lead Members for Housing 16 th November 2010 Nigel Minto Head of Sustainable Communities London Councils

2 Agenda What’s being proposed/Timeline Cost and maps Implications London Councils asks

What’s being proposed - Timeline Nov - Dec 2010 – DHP 2011/12 decided Nov – Dec 2010 – Draft regulations laid Wave 1 – April 2011 –LHA Caps + 30 th percentile change + 5 bed rate Wave 2 –April 2013 up-rate local housing allowance rates in line with the consumer prices index rather than base them on local rental values; –restrict housing benefit for working age social rented sector customers who are occupying a larger property than their household size and structure would warrant; –reduce by 10 per cent housing benefit paid to JSA claimnants where period which exceeds 12 months; and reduce expenditure on council tax benefit by 10 per cent and localise it from , giving councils a greater stake in getting people back to work and discretion to target benefits to local priorities, while protecting the most vulnerable. Wave 3 –October 2013 Universal Credit

Cost & Implications 2011/12 national savings of £55m (£47m in London) London LHA caseload represents 16.4% numerically of the national case load but 68% of the national hit financially on the caps London individual households hit the hardest on the 30th percentile £17 a week average (compared to £9 a week nationally) 2012/13 Single Room rent and Shared Room 1 boroughs indicating a possible 23,400 claimants in London could be facing shortfalls of £50 to £90 a week. No account of this in the DHP budget and further resources should be made available. 32% (59,000) of LHA claims who are in work in London will have a cut in their LHA compared to 25% across England (DWP response to recent PQ). 60% of landlords in London would not reduce their rent 82,000 households across London will be at risk of losing their home as landlords would not be willing to lower their rents following the housing benefit changes. Although the caseload is smaller the magnitude of the impact of 30th cuts in London are far greater e.g. range from –£28 to £160 per month for a 2 bed –£46 to £245 per month for a 3 bed –£72 to £230 per month for those in a 4 bed that have escaped the national cap

Havering Barking & Dagenham Redbridge Newham Bexley Tower Hamlets Greenwich Lewisham Bromley Southwark Croydon Merton Sutton Kingston Upon Thames Richmond Upon Thames Hounslow Ealing Hillingdon Harrow Brent Barnet Enfield Haringey Waltham Forest Hackney Islington Camden City of London City of Westminster Lambeth Kensington and Chelsea Hammersmith and Fulham Wandsworth £ 250+ per week shortfall £ £ per week shortfall £ £ per week shortfall £ 50- £ per week shortfall £ 30 - £ per week shortfall £ 20- £ per week shortfall £ 0- £ per week shortfall 3 Bedroom Impact of all the LHA changes on London: (by potential average LHA shortfall)

Havering Barking & Dagenham Redbridge Newham Bexley Tower Hamlets Greenwich Lewisham Bromley Southwark Croydon Merton Sutton Kingston Upon Thames Richmond Upon Thames Hounslow Ealing Hillingdon Harrow Brent Barnet Enfield Haringey Waltham Forest Hackney Islington Camden City of London City of Westminster Lambeth Kensington and Chelsea Hammersmith and Fulham Wandsworth £ 250+ per week shortfall £ £ per week shortfall £ £ per week shortfall £ 50- £ per week shortfall £ 30 - £ per week shortfall £ 20- £ per week shortfall £ 0- £ per week shortfall 4 Bedroom Impact of all the LHA changes on London: (by potential average LHA shortfall)

Havering Barking & Dagenham Redbridge Newham Bexley Tower Hamlets Greenwich Lewisham Bromley Southwark Croydon Merton Sutton Kingston Upon Thames Richmond Upon Thames Hounslow Ealing Hillingdon Harrow Brent Barnet Enfield Haringey Waltham Forest Hackney Islington Camden City of London City of Westminster Lambeth Kensington and Chelsea Hammersmith and Fulham Wandsworth £ 500- £ 700 per week shortfall £ £ per week shortfall £ £ per week shortfall £ 100- £ per week shortfall £ 70 - £ per week shortfall £ 50- £ per week shortfall £ 0- £ per week shortfall 5 Bedroom Impact of all the LHA changes on London: (by potential average LHA shortfall)

London Councils ‘asks’ Current claimants in the Central BRMA to be subject to the 30 percentile change from April (not October as proposed), but not the national cap (as proposed for April) New claimants in the Central BRMA would be subject to the National Cap. More money from the discretionary housing pot - We originally asked for £18m in 2011/12 from the discretionary housing benefit pot. Upwards of £30m more realistic Borough discretion – Reinstate borough discretion to refuse to pay LHA where the landlord is claiming unreasonable rent levels, preferably before April Use direct payments to landlords as an incentive - Returning to a LHA ‘payments direct’ system to landlord as an incentive to reduce their rents from 1 April 2011 and be time-limited (with annual review in the light of market conditions and the extent that landlords are reducing their rents to the cap level and below) 8