Why hundreds of thousands more social housing tenants will be 'benefit-capped' this year

This month sees hundreds of thousands more households go into rent arrears in the social rented sector in the English regions (but not London) as their housing benefit is drastically cut and they career down the arrears to eviction into homelessness or AEH slope.

Council and housing association landlords seem very non-plussed at this imminent financial catastrophe. The same apathy sees Shelter, Crisis and the many other homelessness lobbies not mentioning the staggering increase to already record homeless numbers this will obviate. 

The Benefit Cap is baring its teeth!

For example maximum housing benefit for the 2 Parent 2 Child benefit household falls to £409 per month with the average 2-bed social housing property at its cheapest social rent level at £465 per month leaving a £56 per month shortfall.  In the English regional average 2-bed at the average affordable (sic) rent of £642 per month the shortfall from raiding other welfare benefits to keep a roof over the heads becomes £233 per month.

Benefit households are now priced out of the cheapest council and HA rented properties is what the f*ck happens and homeless numbers caused by arrears evictions will rocket yet the apathy and ignorance is staggering.

Social housing and homeless lobbies are not batting an eyelid and just as conspicuous in silence are the disability lobbies to the 290,000 existing SRS households who in FY2425 will have their PIP taken off them being joined by 155,000 losing incapacity benefit … losing their exempt Benefit Cap status and see them hurtle down the arrears to eviction into homelessness slope as well.

The Benefit Cap policy systemically targets housing benefit (UC housing cost element and LHA) and maximum levels of housing benefit are cut systemically year-on-year as they have been since it began in September 2013 and thus ever smaller-sized households are ‘benefit-capped’ year-on-year.    

To illustrate the 2P2C household was entitled to (up to) £1,032 per month in maximum housing benefit in 2013/14 which reduced to £498pcm in 2023/24 and reduces again to £409 per month in FY2425 and, critically, maximum housing benefit payable falls below the cheapest average 2 bed social housing property for the first time in the English regions creating a shortfall.   

A more than 60% cut in actual terms to maximum housing benefit from 2013 to 2024

At least 200,000 of the existing 2.45 million SRS households of working-age who receive housing benefit will be caught by this systemic cut to maximum housing benefit and it could easily be double that projection.  The 290,000 SRS households who lose PIP every year on average will largely not have been ‘benefit-capped’ in previous year nor will the 155,000 losing incapacity benefits each year … but in financial year 2024/25 (FY2425) they will be benefit capped and have their housing benefit payments cut.

The Benefit Cap policy operates by [CAP – OTHER = MAXHB] and that is how it was designed so as OTHER welfare benefits increase by £89 per month with the 6.7% inflation uplift this week for the couple with two children it means the MAXHB reduces by the same £89 per month.  This is why MAXHB has been cut from £498 to £409 per month for that household cohort, a fall of £89 per month as we moved from FY2324 to FY2425 this week.

The CAB correctly state:

The Benefit Cap is a limit to the total amount of money you can get from benefits. If your benefits would add up to more than the limit, your Housing Benefit will be reduced. If you get the housing element of Universal Credit instead of Housing Benefit your housing element will be reduced so you don’t get more than the Benefit Cap.

Housing benefit and its replacement in UC housing cost element is the first and often the only benefit that is cut in its [CAP – OTHER =MAXHB] operation and why the policy premise is work or we will remove the roof over your head. 

Principal amongst the many systemic flaws is the overall limit or CAP has not been uprated in 9 of its 11 year operation so when OTHER welfare benefits rise there is a corresponding cut to maximum housing benefit.  It was uprated once in FY2324 and in FY1617 it was cut by 23% in the regions (£500 per month) and by 11.5% in London (£250 per month.)

In FY1314 when it began the CAP was £2,167 per month and the equivalent of £2,996 pcm today yet it is £1,835pcm in the regions and £2,110pcm in London.

      16 local authority areas in the English regions have higher social rent levels than London yet London benefit tenants are allowed £275 per month more in maximum housing benefit.  The policy is a political and economic sham.

Overall, the policy sees year-on-year lower housing benefit levels set against year-on-year higher rents creating an ever greater number with housing benefit shortfalls for whom the arrears to eviction into homelessness slope or pathway becomes the spectre. 

FY2425 sees another phenomenon:

• Benefit Cap cuts to housing benefit for FULLY occupying the ‘scarce resource’ of social housing are greater than the Bedroom Tax / Spare Room Subsidy cuts to housing benefit for UNDER occupying that same ‘scarce resource!’

In 2012 I began posting about the systemic flaws in the overall benefit cap policy which have all manifested as de facto evidence.  I projected (a) social landlords would have to operate NO DSS; and (b) housing benefit cuts would be greater in Benefit Cap than in Bedroom Tax.  You can imagine the looks I got from the many social landlord audiences for those predictions in 2013 and 2014 when I presented the systemic flaw posits at various housing conferences and seminars.   

One of these was a Chartered Institute of Housing conference in London in early 2014 and it took the CIH more than 3 years to confirm my NO DSS manifestation when they commissioned the University of Sheffield to look into this and the Tackling Homelessness Together research was published which included the LETWA screenshot as below:

Limited Entitlement To Welfare Assistance, LETWA, is NO DSS by another name.  The applicant was refused social housing as they would not get enough in housing benefit to cover the rent. Note too this is social landlords refusing homeless households.

This is also perfectly lawful providing each applicant has the same affordability testing applied and thus no unlawful discrimination. Indeed the Bedroom Tax with its 14% or 25% cuts to housing benefit is merely a variant of it.  Since July 2017 when the Tackling Homelessness Together report was published LETWA / NO DSS has become endemic in the social rented sector and operated by all council and HA landlords to ever greater numbers of benefit households matching the year-on-year cuts to maximum housing benefit payable under Benefit Cap.   

The maximum Bedroom Tax housing benefit cut in any 2 bed property is 14% and my table below shows the percentage housing benefit cut for the couple with two children in the cheapest 2 bed social rent property across England for this year (FY2425) and the following two years using the 2.5% and 2.8% CPI projections from the Bank of England MPC in March 2024. 

As you can see in the English regions but not in London the percentage cuts from Benefit Cap far outweigh the maximum 14% cut to housing benefit in the Bedroom Tax policy. 

The precise figures I have collated from official rent data (Statistical Data Return) for each of the 300+ local authority areas of England at 1 – 4+ bed sizes and at social rent and affordable rent tenures details the scale of housing benefit cuts to within ±1% of the average rents charged.

The scale of these housing benefit cuts means the benefit household will never again be granted a social housing property AND as mentioned earlier, the English SRS sees 2.45 million existing households reliant on housing benefit to pay their rent and who will very quickly see a housing benefit shortfall and face the arrears to eviction into homeless (AEH) slope. 

The level of apathy and indifference to this from social housing and homeless and poverty lobbies is astonishing.  None of them have excuse for ignorance on how Benefit Cap works or do politicians, academics or activists as we have had over a decade of irrefutable fact to show how the Benefit Cap policy works

When these ‘experts’ and ‘usual suspects’ all wake the f*ck up?

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Further sources and further information:

The 21% who lose PIP each year

Lord Freud, the Minister for Welfare Reform in 2013 when the policy began, stating, in December 2021 that the Benefit Cap policy does NOT save the taxpayer and the government refuse to conduct an impact assessment on it in an article in NewStatesman.

 

 

 

 

 

 

 

 

 

 

 

 

 

98% of PRS endings are NOT the amoral NO FAULT EVICTION

So much bollocks is written and discussed about No Fault Evictions and by all sides in the adversarial ‘event’ called the Renters Reform Bill, that’s the one where this week the Government kicked into touch the idea of abolishing the section 21 No Fault Eviction.

The facts and that other simple exact science of arithmetic prove this is bollocks.

1.     England has 4.61 million private rented sector (PRS) tenancies

2.     The average duration of a PRS tenancy is 3½ years

This means that each year 1.32 million PRS tenancies come to an end and according to official homelessness data released last week there were 24,260 tenancies ended in FY202223 by the section 21 no fault eviction route.

Thus, as a matter of fact just 1.8% of PRS tenancies are brought to an end by PRS landlords using the section 21 no fault eviction notice and route.

 98.2% of all private tenancies are NOT ended by a no fault eviction!

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 The utter bollocks of the Renters Reform Bill ‘debate.’

The Renters (Reform) Bill has been framed almost exclusively as the end of the no fault eviction and it contains far more proposed changes which have rarely been discussed.

The two principal protagonists in this adversarial debate are:

• The National Resident Landlords Association (NRLA) for private landlords, and  
• The Renter Reform Coalition (RRC) for the renter and private tenant

 The former has been lobbying Government long and hard to NOT abolish section 21; the latter has been full or moral outrage and indignation over banning this admittedly abhorrent and amoral no fault of the tenant eviction route.

The RRC would have you believe the prevalence of the no fault eviction is huge whereas the facts say it is less than 2% of all PRS tenancy ‘endings.’ 

In fact the RRC fed many of their sympathetic MPs with understated data on this issue that they parroted in the second reading of the RRB earlier this week.  The Hansard recording of that ‘debate’reveals countless use of the claim that 71,310 no fault evictions had taken place in the 4½ years from when the then Prime Minister Theresa May announced the pledge to abolish the no fault eviction in April 2019 to the end of September 2023.  

"... since his Government first announced the end of no-fault evictions back in April 2019, a total of 71,310 households have been kicked out on to the street." Angela Rayner

The debate was full of other dodgy facts such as Karen Buck stating

"On average, 290 London renters a week have faced no-fault evictions since the Government promised to bring an end to them in 2019"

290 per week every week in London alone?  That would be 15,080 in London alone yet the latest homelessness data reveals 4,240 in London in FY202223 which is circa 82 per week not this 290 claim. 

This is found in Table A1

Then Hansard records

"Each day that we delay, 172 families are handed a no-fault eviction notice."

This claim of Kim Johnson MP would mean 172 x 365 section 21 notices or 62.780 such notices per year yet the same Kim Johnson MP a few seconds before spouts the 71,310 line ...

"...Nearly five years since the Government proposed to outlaw no-fault evictions and give renters desperately needed protection from exploitative landlords, some 70,000 households have been threatened with homelessness by section 21 notices."

Kim Johnson is claiming 62,780 per year and this she says is some 70,000 over FIVE YEARS!  The level of innumeracy and politcking by regurgitaing any and every 'prevalence' claim is an insult to all private renters these MPs are projecting they support!

The fact that Angela Rayner the Labour shadow to Michael Gove, Karen Buck MP who has instrumental in the Homeless Reduction Act and Kim Johnson MP the former shadow rough sleeping minister have all had 4 years to get their arguments together for the abolition of the abhorrent NFE and all of them can't be bothered to even get the numbers right!  So those of you who may wish to believe the Angela Rayner direct answer today to the question of whether Labour will ban NFEs being a resounding YES ...

If ONLY these Labour MPs had bothered to check the number and prevalence of s21 notices they would have easily been able to expose the Michael Gove excuses of the alleged 'swamping' of the court system for the poppycock they are anyone?

The reality is the 71,310 claim for the 4.5 year period equates to 15,846 section 21 notices yearly and just 1.2% of all of the PRS tenancies that end each year and is below the official homelessness data released last week revealing 24,260 such notices in FY202223 - which is 1.8% of PRS endings.

These numbers, numeric facts and prevalence are extremely significant by being below 2% of all PRS tenancies that end each year and over 98 in every 100 PRS tenancies ending are NOT by this (amoral and abhorrent) no fault eviction section 21 route.

The craven Government and specifically the LUHC headed by Michael Gove before the second reading said that the abolition of section 21 evictions would not take place until four other factors were in play of (a) the digitisation of the courts to process evictions and repossessions; (b) recruiting and retaining more bailiffs; (c) an enquiry into how ASB should be prioritised for court cases; and (d) much greater housing legal aid is available for private renters.

In short, Government took on board the specious argument that the court system – which is already overworked and underfunded – would be overwhelmed or even that favourite term of government of ‘swamped’ with huge number of cases that would ordinarily have been the no fault section 21 notice.

However, the damn pesky numeric facts of 24,260 yearly cases of section 21 no fault eviction use breaks down to 1½ new cases per local authority area per week across England for the courts to decide. 

The Government’s 4 point excuses for not abolishing section 21 are risible as 1.5 new section 8 discretionary cases per local authority per week for the courts to make a decision upon is not anything like a ‘swamping’ at all. 

Whilst Michael Gove is on record as despising and ignoring ‘experts’ he cannot ignore irrefutable numeric fact and I remind him that it is his LUHC department which collates and publishes the official homelessness data which reveals this 24,260 uses of a section 21 notice.

The campaign and relentless almost sole focus of the Renter Reform Coalition on the amorality of no fault evictions whilst massively ‘bigging-up’ the usage or prevalence of the section 21 was crass, naïve and a case of the RRC shooting themselves in the foot by bigging-up the section 21 notice.  Their opponents the NRLA were more than happy to acquiesce to this innumerate RRC strategy as they were then able to argue to Government that the section8 alternative notice and which needs ‘fault’ would see the courts overwhelmed – yet the facts prove this narrative is absolute poppycock or as I choose a load of innumerate and specious bollocks.

Reader, if this author as a mere consultant in this area for over 20 years can access the numeric facts at the heart of this NFE argument, then bet your life the salaried policy and research staff in the large organisations who came together to form the Renter Reform Coalition must know these numeric facts of section 21 usage and prevalence.  It is incredulous to believe that the policy teams of Shelter, Crisis, Citizens Advice Bureaux, the Joseph Rowntree Foundation and all the other luminaries and self-titled ‘experts’ in this not hastily assembled coalition did not and do not know the usage and prevalence of the no fault eviction section 21.

Yet, in focusing this entire Bill almost exclusively on the (amorality of) no fault eviction, the Renter Reform Coalition ran a campaign that was naïve, incompetent and pitiful and these “experts” severely let down the vulnerable private renter they were supposed to be fighting for!

There is and never was any need for a new specialist housing court as the 1½ new eviction cases per authority per week as replacement for the abolition of section 21 no fault notices is not an undue addition that would swamp the courts.  Any increased digitisation of the courts for possession or other cases is a long slow piecemeal process and if any ‘digitisation’ process cannot cope with the addition or 1½ additional cases per week per local authority then that digitisation process is not worthy of pursuing!

That applies even with a clear acknowledgement that the current court system is on its knees due to cuts to funding and closure of thousands of court rooms by the current government.  The offensive irony of Michael Gove and the government housing department citing a chronic shortage of housing legal aid to deal with the non ‘swamping’ of the courts after this government has massively cut legal aid and housing legal aid provision is distasteful and duplicitous in the extreme.

In summary, reader, the years of bull and bluster over the no fault eviction issue has taken the usual course of any intended real reform to any housing, homeless and poverty matter – the priority of myth, bullshit and exaggeration over those darn pesky things called fact.

A plague on all your houses Michael Gove, NRLA and RRC!

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