Young people continue to lose out under housing benefit reforms
30th November 2005
Young people on low incomes will continue to face the risk of serious debt and homelessness if planned reforms to housing benefit go ahead unchanged, problem-solving charity Citizens Advice warns in a report published today.
"Early days" says that in the 18 areas where the new local housing allowance scheme is being piloted, many tenants have gained from the more generous flat rate payments they get under the new scheme. Most no longer face the serious shortfalls between housing benefit and rent that often led to crippling debt, rent arrears and threatened eviction.
But under-25s are still struggling to find affordable accommodation and to pay their rent under the new scheme because, as with housing benefit, local housing allowance is paid to them at a lower rate - known as the shared room rate - based on the average rent of shared accommodation in the area.
Citizens Advice Bureaux in the pathfinder areas report that there remains great difficulty in finding any private rented accommodation within the shared room rate. In one case, a client had got into arrears because of the benefit shortfall and the landlord was taking possession proceedings.
Citizens Advice social policy officer Liz Phelps said:
"The rules are fundamentally unfair for young people. All the evidence is that the existing single room rate succeeds only in undermining efforts to support young people into work, and has been ineffective in forcing them into shared accommodation. Instead it has increased the risk that young people will face poverty, debt and homelessness, so making it more difficult for them to find and keep a job. The local housing allowance shared room rate only perpetuates the problem.
We believe there is now an overwhelming case for removing age-related rent restrictions from the local housing allowance."
Citizens Advice also calls for private tenants who qualify for the local housing allowance to retain the right to choose whether the money is paid to them or their landlord. It says forcing tenants to be paid direct creates huge problems for those without access to bank accounts, complicates the claiming process for vulnerable people, and makes landlords reluctant to let to people on housing benefit.
Evidence from Citizens Advice Bureaux contracted to provide money management support to local housing allowance claimants in five of the pathfinder local housing allowance areas suggests that funding for dedicated money advice services for claimants has been one of the keys to its success, helping tenants manage the transition and their new rent-paying responsibilities, and ensuring more vulnerable tenants get the support they need.
But Citizens Advice cautions that there is still much to be done before the new scheme is ready to be rolled out nationally to replace housing benefit in the private rented sector, as the Government intends.
Liz Phelps said:
"The fact that there were no losers at the point of change and indeed many claimants have benefited from reductions in the shortfall between their benefit and rent has been key to making the new scheme work, as has the dedicated funding for money advice.
We would be very concerned if these elements of the scheme were to be compromised in any national roll-out of the local housing allowance. It is vital that the concerns we raise in our report are addressed if the needs of the most vulnerable are to be protected."
The Local Housing Allowance has been introduced in 18 local authorities since 2003, making up ten per cent of the private rented sector caseload. Nine pathfinder local authorities began the pilot between November 2003 and February 2004: Blackpool, Brighton and Hove, Conwy, Coventry, Edinburgh, North-East Lincolnshire, Leeds, Lewisham and Teignbridge
A further nine 2nd wave group local authorities adopted the new arrangements over the summer of 2005: Argyll & Bute, East Riding of Yorkshire, Guildford, Norwich, Pembroke District, Salford, South Norfolk, St Helens and Wandsworth.
Last updated: February 22, 2007