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Should Housing Benefit be devolved?

January 18th 2016

Victoria Winckler reflects on whether better use could be made of the £1 billion spent on Housing Benefit in Wales.

terrace houses

By any measure, Housing Benefit is a big deal in Wales. The bill last year was over £1 billion, and it helps nearly a quarter of a million claimants with their rent. While the biggest chunk goes towards the rent of people in social housing, about a third of claimants are in the private rented sector.

Housing Benefit has been subject to an enormous number of changes since 2010. Many are highly technical and lose all but benefit experts in their application – but the effect on claimants has been substantial.  There are now:

  • restricted in the size of property

    While the removal of the ‘spare room subsidy’ / bedroom tax is the most well-known, there are other changes which limit the size of property a claimant may  seek help with.

  • limits on the amount of benefit

    The benefit cap has received the most attention, but changes in the calculation of claimants’ incomes and changes in the amount of rent that can be considered have also cut – sometimes substantially – the amount of benefit than can be received.

  • changes in payment arrangements

    Once help with housing costs is included in Universal Credit, claimants will receive the contribution to rent as a lump sum along with other benefit, monthly, in arrears, paid to one person in a household.

The impact of these changes on households receiving benefit is considerable, with those affected by the loss of the ‘spare bedroom subsidy’ losing an average of £14.17 a week and four out of ten of those affected by the benefit cap losing more than £50 a week.

The impact on housing need is even greater.  The changes to Housing Benefit underpin a bigger shift away from housing for a lifetime to housing for current need, and also see a growing risk that some people could be excluded from housing – because they simply cannot afford it – completely.

Is devolution the answer?

Some people have argued that the case for devolving Housing Benefit (or its successor element of Universal Credit – UC) is “compelling”.

The Scotland Bill includes provision for the Scottish Government to make changes to the housing element of UC, including changing payment arrangements and varying rent and size criteria, and the ability to make additional payments. However, these are administrative changes not devolution.  Some English cities are calling for increased powers over the housing element, particularly to determine Local Housing Allowance.

There has been little debate in Wales, other than Community Housing Cymru’s call a few years ago for Wales to retain payment of Housing Benefit to landlords. Yet the scope to use Housing Benefit as part of a progressive, needs-based approach to housing, which recognises the nature of Wales’ population, housing stock and local markets is immense.

Our first discussion about what a Welsh approach to housing benefit might look like takes place today. We’d also welcome your views and ideas either as a comment on this post or by email to [email protected]

Victoria Winckler is Director of the Bevan Foundation.

For more information about our project ‘Making Welfare Work for Wales’ please click here

 

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