§ Mr. KirkwoodTo ask the Secretary of State for Work and Pensions (1) in how many and which registration areas the Rent Service uses administrative boroughs to determine the locality by which the local reference rent is ascertained; [27418]
(2) what assessment he has made of the implications and economic consequences of the Court of Appeal Judgment in the case of Regina (Saadat and others) v. The Rent Service; [27419]
(3) what consultations took place in the drawing up of SI 2001, No. 3561; when the LGA was informed of SI 2001, No. 3561; and for what reason the SI was not referred to the Social Security Advisory Committee; [27420]
259W(4) how he will apply SI No. 3561 to ensure that in determining local reference rent, the Rent Service is not disadvantaging otherwise eligible claimants from more affluent areas; [27421]
(5) if the purpose of SI No. 3561 is to allow the Rent Service to continue to use administrative boundaries to set local reference rent. [27422]
§ Malcolm Wicks[holding answer 15 January 2002]: Our priorities for housing benefit are to drive up standards of service, tackle fraud and error, reduce barriers to work and tackle social exclusion. In support of these aims we want to ensure that housing benefit does not provide a disincentive to work by subsidising accommodation which a person could not otherwise afford. That is why housing benefit for rented accommodation in the deregulated private sector is restricted to the broadly average rent level for similar sized properties in a locality (the local reference rent).
Our policy is that local reference rents should reflect the generality of the market and must therefore be based on a geographical area large enough to take account of the bigger picture, reflecting a broad choice of housing.
Rent officers use their professional expertise and judgment to determine the size and boundaries of localities. Using fixed boundaries, such as local authority areas, would not necessarily reliably reflect the market. Moreover, market forces mean that, over time, the size and shape of localities will change. Information on those localities which happen to be co-terminous with local authority areas at a particular point in time is not collected
The Court of Appeal in its recent judgment Regina (Saadat and others) v. The Rent Service took the view that the locality used by the rent officer to calculate a local reference rent was larger than that needed reliably to decide such a rent. The formula arrived at by the court under the order then in force runs counter to our intention that localities should be based on broad geographical areas. The application of this formula could also have led to a large increase in the number of localities nationally, making it impractical to operate, resulting in delays for people claiming benefit and putting an extra burden on local authorities.
We therefore acted swiftly to introduce amending legislation in the Rent Officers (Housing Benefit Functions) (Amendment) Order 2001, SI 3561 which now defines locality in a way which reflects Rent Service good practice. These amendments are designed to ensure that our policy is achieved and to restore certainty. They are not designed to change the way in which localities and local reference rents are decided or to widen the definition of localities so that they increase in size. The position for people claiming housing benefit is therefore unchanged, irrespective of the affluence of the area in which they live.
The Department wrote to the local authority associations on 1 November 2001, four days before the order was laid before Parliament, outlining the nature of the proposed amendments. No representations were received in the intervening period. There is no statutory requirement to consult the Social Security Advisory Committee about proposals to make orders, but the 260W committee was informed of the proposed amendments, as a matter of courtesy, at the same time as we wrote to the associations.