§ Mr. MeacherTo ask the Secretary of State for Social Security by how much public expenditure has been reduced as a result of policy changes to housing benefit each year since 1987, both at current prices and at 1990 prices; and what has been the cumulative total of savings.
§ Mrs. Gillian Shephard[holding answer 21 June 1990]: Direct comparisons over this period are difficult both because the definition of what constitutes public expenditure has changed and because the replacement of domestic rates by the community charge has involved a fundamental change to the structure of the benefit. It is also not feasible to isolate the effects of individual policy changes in such a way as to judge their cumulative effect over time because they cannot readily be disaggregated from other factors affecting benefit expenditure such as benefit upratings, movements in housing costs and income levels, the level of the domestic rates or community charge set by local authorities, and changes in the numbers and compositions of the caseload.
However, in very broad terms, the overall effect of policy changes over this period has been to increase public expenditure on housing benefit and community charge benefit and also to increase the overall spending on housing benefit and on other social security support to assist with payments of rates and community charges. The main changes on a year-on-year basis are as follows. The 1988 reforms were estimated at the time to save £150 million in public expenditure on housing benefit, compared with continuing the old scheme unchanged. In addition, they were estimated to save some £480 million in expenditure not classified at the time as public expenditure, of which £350 million arose from the requirement for all claimants to meet at least 20 per cent. of domestic rates from their own resources. Against this must be set an increase of £400 million in public 314W expenditure from the adjustment to the benefit rates to provide help with this contribution to those receiving income-related benefits.
In the year of the reforms there were certain improvements to the scheme which increased overall expenditure. These were the higher capital limit (£35 million) and the transitional protection scheme for vulnerable groups (£65 million).
Since then there have been further improvements including a package of measures for poorer pensioners (£32 million) and the further increase in the capital limit (£90 million). The transfer of support for the accommodation costs of boarders from income support increased housing benefit expenditure by £190 million. The more generous taper used for community charge benefit in 1990–91 is estimated to cost a further £210 million.