Income Support and Rent (Hansard, 16 June 1999)

§ The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham)
My Lords, we are reviewing housing policy and housing support and aim to publish a housing Green Paper by the end of the year. We remain committed to the principle that the benefit system should help people on low incomes to afford decent housing at reasonable rents.

§ Earl Russell
My Lords, I thank the Minister for that Answer. She is probably familiar with the Centrepoint survey of the effect of the single room rent in Devon. Is she aware that the findings of that survey are those of a vast body of research that, where limits are placed on 280 housing benefit, the landlord does not reduce the rent, but either stops letting to tenants, or goes out of the private rented market, or requires tenants to pay the rent out of income support? Do the Government learn anything about the nature of the market from that information?

§ Baroness Hollis of Heigham
My Lords, I entirely accept the noble Earl's analysis. Like him, I was warning the then government of the implications of the deregulation of private rents that occurred in the late 1980s. No doubt, the then government had the wistful hope that landlords might invest in their properties. Instead, all they did was pocket the profits. The problem that we now face is that about two-thirds of all private tenants do not receive housing benefit that fully covers their rent. If it did, we would sustain landlords in being able to ask for any rent they chose, as they have been doing since the late 1980s.
The noble Earl's point about the single reference rent is right and we are examining that as part of the housing review.

§ Baroness Gardner of Parkes
My Lords, will housing benefit in general be considered in the review? Is the noble Baroness aware that in central London many people receive housing benefit of many hundreds of pounds a week? Does she not believe that it is time to consider a ceiling on the amount of benefit?

§ Baroness Hollis of Heigham
My Lords, we do have a ceiling on housing benefit. Either the rent officer must determine what is a reasonable rent or it must be determined by reference to the local reference rent. The noble Baroness is right that there is a huge disparity in rents between, say, London and the north-west and north-east where 20 to 25 per cent of rented stock is difficult to let. One of the difficulties in finding an adequate response to housing benefit is precisely to take into account those regional variations. But, yes, we need to review housing benefit.

§ Lord Dholakia
My Lords, does the Minister accept the findings of the National Audit Office that 30 per cent of the cases classified as fraud are wrongly classified?

§ Baroness Hollis of Heigham
My Lords, yes, that may well be so. As regards housing benefit, there are many mistakes on both sides. As noble Lords will know from press reports and so forth, in a few cases there is systematic abuse of the housing benefit system by landlords who claim for fictitious tenants. The payment of housing benefit is directed to the landlord rather than to the tenant, and when the tenant moves on often the landlord continues to pocket the cheque. Every pound that is spent fraudulently, particularly to landlords, is a pound not available for housing benefit to other needy families.

§ Lord Evans of Parkside
My Lords, does my noble friend agree that in too many local authorities an applicant for housing benefit often enters a bureaucratic nightmare? Will the review look at the performance of 281 local authorities and ensure that every local authority is encouraged to streamline the process of accepting, receiving and dealing with applications for housing benefit?

§ Baroness Hollis of Heigham
My Lords, my noble friend makes an important point. That was one of the serious criticisms of the administration of housing benefit raised by the latest NACAB report entitled Falling Short. We take that on board. The NACAB solution is to transfer housing benefit to the Benefits Agency. We believe that the right solution is to achieve best practice among local authorities. We are sending out guidance and working with local authorities to achieve what my noble friend suggests.

§ Lord Higgins
My Lords, while the review is welcome, it will clearly be some time after the Green Paper before any legislation is brought forward. Arising from the point just made by the noble Lord, Lord Evans, in relation to delays, in advance of the review could we not eliminate one or other of the two forms which are required at present: one goes to the Benefits Agency and the other to local authorities? It does not seem to me to need too much of a review to simplify the form filling which I know from my own constituency experience causes problems.

§ Baroness Hollis of Heigham
My Lords, that is an entirely fair point. In the pilot areas for the single work-focus gateway, we are looking at the matter to which the noble Lord referred; namely, that one sort of information comes from the applicant which can then be shared by local authorities and the DSS If we go down that road, I hope that I shall not be criticised by the noble Lord for sharing information with other authorities which did not originally collect it.