FTSE 100
Dow Jones

Friday, 28 August 2009

Cheap, nasty, smelly

That is the choice of housing that you get when you are poor, unemployed and living on benefits. It also describes the government's treatment of some of the very poorest in society.

At the moment people on Local Housing Allowance who cannot make ends meet are able to trade down to find accommodation that costs less than the maximum allowance available to them and keep the savings, up to a maximum of £15 a week. Believe me, this is not something that anyone does lightly. LHA is means tested so if anyone is claiming it, they are in a bad way. Many families cannot cope with the levels of income that are available to them and are forced to move to lower quality housing simply to take advantage of the extra £15.

Essentially this policy has cost the tax payer nothing because the families would have claimed the more expensive housing if they had no choice.

Now we hear that the Treasury says that the policy costs too much and that the ability to pocket any surplus should be scrapped from April 1. Someone living on £65-a-week jobseeker’s allowance would lose 18.75% of their income. The press and the government both kept quiet about it at the time and the measure was not a feature of the Finance Act. Details were hidden away in the text of press notices:

Local Housing Allowance

The Government is reforming the Local Housing Allowance (LHA) so that it is more equitable and promotes work incentives. From April 2010, households will no longer be able to keep any of the surplus if the LHA they receive is higher than their rent. For those already receiving LHA, this reduction will not apply until the anniversary of their claim. It is essential that the LHA represents good value for money for the taxpayer and as this measure will only affect surpluses, it will not produce rent shortfalls.

The truth is this will not save the government a penny because if the cash is taken away, families will simply move into more expensive accomodation to take up their full housing allowance, but will lose valuable cash.

So all I can do is suggest that you write to your MP, not that it will do any good and support your local food bank. If you really need convincing how tough life can be at the sharp end, pop round to see their "clients". Requests for help at the food bank in our nearest town have risen 40% over the last year. The situation is probably the same where you live and will be much worse if this measure goes through.


Demetrius said...

For weeks now Channel 4 lawyers have been throwing a wobble about a report on the scandal going on in leasehold retirement housing. They may or may not run it on Tuesday 1st September in a much watered down form. Basically, a major company with a near monopoly on the property management services and freeholds ownership has radically pushed up its charges. They are a property investment company with close links to the Icelandic fiasco. They had been using thir assets, a major one being the income streams from increasingly impoverished pensioners as a base for leverage in some highly speculative ventures.

Alex said...

This is a different issue with private housing. I have some sympathy with the housing companies who as I understand it want to replace resident wardens with 24 hour non-resident wardens on the basis that the resident wardens effectively only work 40 hours a week and the service is better provided with area support - much more manageable than twenty years ago when this sort of accommodation started and there weren't multiples sheltered housing addresses in every town.

Demetrius said...

The warden issue is a different one in a different context. The problem in the private sector is a lot of pensioners, many on low incomes, facing huge hikes in service charges, added fees, and failure to pay insurance claims. The people involved are the same sort as in the pubco's and are amongst the fattest of cats with celebrity lifestyles to match.