Housing Benefit: Landlords and Tenants (Hansard, 23 April 2001)

§ Earl Russell
asked Her Majesty's Government:
Whether they have any plans to reduce the proportion of landlords who are unwilling to accept tenants on housing benefit.

§ The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham)
My Lords, perhaps as many as half of landlords prefer not to let to tenants on housing benefit. One of the reasons for that has been the delays in payment. As your Lordships will know from responses to previous Questions in your Lordships' House, we are working in partnership with local authorities to make the payment of housing benefit more efficient.

§ Earl Russell
My Lords, I thank the Minister for that reply. She will be aware that all the research, including the Government's own, indicates that the imposition of the single room rent on people under 25 is one reason why many landlords have ceased to accept people on housing benefit. I direct her attention to a reply given by her honourable friend Angela Eagle in another place on 2nd April which indicated the prospect of some relaxation in the single room rent. 11 Will she explain to the House what that relaxation is? I welcome it with a warmth proportionate to the answer which I am about to receive.

§ Baroness Hollis of Heigham
My Lords, I expect warm and robust thanks from the noble Earl, to whom I am grateful for raising this matter. At the moment the single room rent applies only to young people who are in a self-contained unit; effectively, a bedsit. Therefore, young people in a shared house, for example, have no contribution through housing benefit to the cost of the shared living room or the shared bathroom. The proposed extension which will come into effect in July will allow the cost of the accommodation in which most young people live—that is, a shared flat—to be met by housing benefit. Some 65,000 young people should benefit, at a total cost of about £25 million. I hope that the noble Earl will welcome that with enthusiasm.

§ Baroness Gardner of Parkes
My Lords, is the Minister aware that it is not just the delay in payment that is causing difficulty, but also the fact that landlords, particularly small landlords, are uncertain whether they will get the payment? Will her department consider introducing a scheme rather like that introduced by building societies under which one is given an indication of the mortgage one can obtain and one then looks for a property? Would it help if people were certified as eligible for a certain level of housing benefit before they approached a landlord?

§ Baroness Hollis of Heigham
My Lords, that is a helpful suggestion. We have explored the possibility of accommodation having a predetermined rent level. That would enable anyone seeking that accommodation to know what he or she would be likely to pay in rent and what the appropriate housing benefit might be.

§ Lord Astor of Hever
My Lords, in its report on housing benefit last year, the Social Security Advisory Committee invited the Minister's department to provide a detailed analysis of the impact of the main models for a reformed system for private tenants. Has that analysis been undertaken and, if so, what were the main findings?

§ Baroness Hollis of Heigham
My Lords, the basic problem is that housing benefit has to follow the reform of the restructuring of housing rents. Either you have to control rents or you have to control housing benefit. If you do not do one or the other, landlords will increase rents accordingly and the taxpayer will be left to pick up the bill. The Government made it clear in their housing Green Paper that housing benefit reform in the long term must follow the restructuring of rents, which could take seven to 10 years. But in the short term we are picking up the sort of issues addressed by the noble Baroness, Lady Gardner; that is, the speed, effectiveness and verification of housing benefit payments.

§ Lord Avebury
My Lords, is the noble Baroness aware of the particular difficulties faced by discharged prisoners who cannot enter into commitments to take on a tenancy without the certainty of being able to get housing benefit, but they cannot get housing benefit until after they have been discharged? Will she look into that matter and try to do something about it?

§ Baroness Hollis of Heigham
My Lords, that is a real problem. Prisoners and their support organisations could press local authorities much harder to use the exceptional hardship payment scheme. In the past year, for example, the Government made available £20 million to local authorities for individuals in exactly the kind of position that the noble Lord has described. Some 10 per cent of local authorities spent not a penny of that money; 60 per cent spent less than 50 per cent of their allocation. Well over half of that allocation is unspent. As a result, people in extreme need such as former prisoners and young women who may be pregnant who could get additional help in high demand areas are not being given it. I hope that your Lordships will join me in pressing local authorities to spend the money they have been allocated for such cases and not to spend it on other things.