Wednesday, 10 December 2014

Hunger and food poverty in Britain

An income squeeze, benefit delays and excessive utility bills are blamed by an All-Party Parliamentary Group (APPG) for a huge rise in the use of food banks.

The APPG inquiry into hunger and food poverty in Britain published its final report in the House of Commons on Monday 8 December, having took evidence on the extent and causes of hunger, the scope of provision to alleviate it and a comparison with other Western countries.

The inquiry raised concerns over the late payments of benefits which have had a 'detrimental impact on poor and vulnerable claimants'. The report calls for benefits to be delivered within five days of a legitimate claim and for more discretionary payments to be made when delays occur.

Low income households saw the proportion of their incomes swallowed up by housing costs, utility bills and food soar by 31% to 40% between 2003 and 2012, leaving them little margin to cope with emergency expenses, found the inquiry.

The inquiry found the number of food banks run by the charity Trussell Trust had grown from a handful to 420 in the past 10 years, and that there may be at least as many food banks operating independently. The growth in food bank use is mirrored across Europe and the US, the inquiry found.

The report, 'A strategy for zero hunger' in Britain, made 77 recommendations, including:
  • establish a national organisation called 'Feeding Britain' to drive a campaign to end hunger
  • introduce a ‘Yellow Card’ system, warning benefit claimants of a possible sanction
  • end government subsidies to destroy surplus edible food
  • radically re-design food bank services to offer debt support and welfare advice
  • provide education on cooking, parenting skills and budget management
  • extend the reach of the Troubled Families programme to stop children repeatedly coming to school hungry.
In his speech at the launch of the report Justin Welby Archbishop of Canterbury said 'how shocking it is to find this happening here [Britain]'.

The Inquiry published its first two evidence papers in the spring and summer 2014, focusing on long-term trends in household expenditure.

The APPG on Hunger and Food Poverty was established by Frank Field MP and Laura Sandys MP in October 2013, in order to proactively investigate the root causes behind hunger, food poverty and the huge increase in demand for food banks across Britain.

Wednesday, 3 December 2014

Housing measures in Autumn Statement

Chancellor George Osborne today announced his Autumn Statement, the last before General Election 2015; and a major part of this was the revelation that stamp duty will be cut for 98 per cent of home-buyers. The Chancellor said, 'If you buy an averagely priced home of £275,000, you will pay £4,500 less in tax.'

Mr Osborne also unveiled a wide ranging set of housing initiatives. For example, 'This Autumn Statement package includes measures which will: take forward existing commitments for up to 42,000 homes, release land with capacity for up to 150,000 homes and commit to new measures to support up to 133,000 homes.'

Aside from commitments to various local housing and regeneration projects, the Autumn Statement looks at proposals to build the first new garden city for nearly 100 years at Ebbsfleet, designed to 'deliver up to 15,000 new homes.'

Part of the Government's vision to develop new housing is to redeploy underused public land, and the Chancellor wants to release enough land to build up to 150,000 homes between 2015 and 2020.

In terms of delivering more affordable homes, the government pledges to extend affordable housing capital investment to 2018-19 and 2019-20. This should, 'ensure that on average 55,000 new affordable homes per year continue to be delivered.'

In addition the Government claims that this will serve to, 'build more new affordable homes than in any equivalent period in the last 20 years.'

Shared ownership features in the Chancellor's plan to boost home ownership, with the announcement that 'the government will extend the scope of Stamp Duty Land Tax (SDLT) multiple dwellings relief so that "lease and leaseback" arrangements with housing associations on shared ownership properties also attract the relief.' Further:

'The government will also consult on options for streamlining the process for selling on shared ownership properties, and will work with housing associations, lenders and the regulator to identify and lift barriers to extending shared ownership.'

George Osborne plans to consult on different ways to increase the borrowing capacity of housing associations, 'in relation to the valuation of properties transferred from local authorities.'

Regarding housing benefit, the Autumn Statement says, 'New financial rewards will be paid to local authorities that reduce the amount of money lost through fraud and error in Housing Benefit'. These rewards will be worth up to £35 million over the next 3 years.

Mr Osborne said the Office for Budget Responsibility was predicting growth of 3 per cent this year - up from the previous estimate of 2.7 per cent, but admitted that government borrowing this year would be nearly £5 billlion more than had been predicted in March. The Chancellor claimed that government borrowing would fall in future years, and insisted his overall plan to eliminate the structural deficit was on track to be completed by 2018.

Tuesday, 2 December 2014

Government to become housebuilder

Today the Government announced plans to increase housing supply as part of its National Infrastructure Plan 2014. According to a press release from HM Treasury and Danny Alexander MP:

'One of the key proposals is for the government to master-plan, directly commission, build and even sell homes.

'A pilot programme on a government-owned former RAF base in Northstowe, near Cambridge, will see the Homes and Communities Agency leading development of 10,000 homes, twice as fast as conventional approaches.'
Further, it says:

'The government will also evaluate the feasibility and economic impacts of rolling out this model on a wider scale, to support and accelerate housing supply.'

The broader Plan sets out this Government's intention to extend the capital settlement for affordable housing by £957 million in 2018-19 and 2019-20, 'to ensure that 275,000 new affordable homes can be delivered over the next Parliament.' Danny Alexander, said:

"New houses support economic growth and are a crucial element of a fair society, so I’ve prioritised the investment of almost £2 billion to ensure we can build on average 55,000 new homes a year until 2020."

Monday, 17 November 2014

Universal Credit claimants face 20 per cent rent arrears deductions

On 13 November the Department for Work and Pensions (DWP) published a Universal Credit 'support pack' to advise social landlords on how to help their tenants get ready for the new benefit. Included in the Department's press release was a short, but very important, statement:

'The amount that can be deducted from a claimant’s Universal Credit if they fail to pay their rent, has been increased from 5% to an amount of up to 20% of the Universal Credit standard allowance, which will ensure claimants are back on track with payments quicker. The minimum amount that will be deducted is 10%.'

DWP calls these 'third party deductions' - see, for example, page 9 of this document.

If a claimant accrues a months worth of rent arrears it will trigger 'early intervention' by the DWP, who will review a tenants financial status. DWP may then consider making rent payments direct to landlords.

If a tenant builds up two months of rent arrears, DWP will intervene immediately, and divert the housing element of Universal Credit to a claimant's landlord.

Earlier this year, DWP consulted on a proposal to 'increase the rate of rent arrears deductions in Universal Credit,' and a wide range of charities and experts responded to this.

Looking at the original consultation, mailed directly to respondents (here is Shelter's response), it's clear that DWP initially wanted to deduct as much as 40 per cent from claimants' Universal Credit allowances, should they fall into arrears.

DWP writes, 'Work coaches are being trained to assess a claimant’s financial capability and will refer them to personal budgeting support where appropriate.'

The national roll-out of Universal Credit is expected to be complete by 2018, but the scheme has been beset by delays. According to a Guardian article dated October 2014:

'... from 2016 to well into 2018, it is likely Britain will have a two-tier welfare system with some people on universal credit and millions not. The DWP estimates there are 7.7m eligible claimants at present.'

Thursday, 30 October 2014

Welfare trends report considers housing costs

The Office for Budget Responsibility (OBR) published its first welfare trends report on 16 October, looking backwards at the last three decades of welfare spending, and forwards to future prospects.

The OBR will be producing welfare trend reports each year, in response to a request from the Chancellor of the Exchequer to assess the Government’s performance against its new 'welfare cap' and, in order to facilitate open and constructive debate about welfare spending, to “prepare and publish information on the trends in and drivers of welfare spending within the cap.”

The report includes a section about housing costs, and it discusses overall trends in welfare spending. This is a very detailed document which may reward closer reading. For example, OBR writes:

'Over the past 30 years, welfare spending has risen steadily in cash and real terms, but on average that increase has been broadly in line with growth in the economy. So the proportion of national income devoted to welfare spending has not shown a significant upward or downward trend over time.'

In terms of housing, the report tends to focus on housing benefit which, 'accounts for a significant share of welfare spending'. Social housing has not been left out of OBR's findings, and we learn that:

'The number of households living in the social-rented sector has been declining steadily for decades.'

Linked to this, the report says, 'Reduced spending on social housing may have had a significant impact on the housing benefit bill, by increasing the proportion of the caseload paying higher rents in the private-rented sector.'

Trends in housing benefit spending are also identified. For example, 'Spending on housing benefit has fluctuated with the economic cycle, but on a generally upward trend over time.'

It is also claimed that, 'recent reforms to both private- and social-sector rents are expected to reduce growth in housing benefit average awards and spending ...'