Removing access to Housing Benefit for 18-21 year olds could place many vulnerable young people at increased risk of homelessness. This briefing explains why.
After the Queen’s Speech, implications for homelessness take shape
So the election is behind us and the first majority Conservative Government for nearly twenty years has been formed. The ink on the Queen’s Speech is dry and work is now underway to turn the Conservative election manifesto into reality.
In this blog I have tried to give a feel of the policy agenda in which homelessness agencies are now operating. Much of the information is sketchy while we wait for more detailed proposals – however, I have drawn on manifesto commitments alongside information that came out in the Queen’s speech last week.
Housing Benefit for young people
The manifesto pledge around this was a strong one:
“It is not fair that taxpayers should have to pay for 18-21 year-olds on Jobseeker’s Allowance to claim Housing Benefit in order to leave home. So we will ensure that they no longer have an automatic entitlement to Housing Benefit.”
In last week’s Queen’s Speech, the reference to Jobseeker’s Allowance was removed to say simply that the Government will:
“Remove automatic entitlement to housing support for 18-21 year olds.”
It is unclear whether this altered wording is recognition that the Government plans to end Jobseeker’s Allowance for 18-21s (more on this later) or represents an intention to include non-Jobseeker’s Allowance claimants.
To date there has been no steer on what, if any, exemptions there will be for young people who do not have the option of staying with their families. Along with other charities, we are working hard to oppose these changes as we believe it will directly increase homelessness among young people. We have produced this briefing on the issue.
Tougher benefit conditionality for younger people
“We will introduce tougher Day One Work Requirements for young people claiming out-of-work benefits.” (Queens Speech)
We do not know what these new requirements for young people will look like as jobseekers already have to show they are looking for work or risk sanctioning. We do know that this commitment is part of the Government’s aspiration to “abolish youth homelessness” as is their policy around replacing Jobseeker’s Allowance, although questions remain around how the Youth Allowance will dovetail for any 18-21s who are granted exemption from the Housing Benefit changes:
“We will replace Jobseeker’s Allowance (and Universal Credit) for 18-21 year-olds with a Youth Allowance that will be time-limited to six months, after which young people will have to take an apprenticeship, a traineeship or do daily community work for their benefits.” (Queens Speech)
According to the manifesto, the conditionality regime will also be reviewed for people with certain health problems who are not judged to be taking adequate actions to address them:
“We will review how best to support those suffering from long-term yet treatable conditions, such as drug or alcohol addiction, or obesity, back into work. People who might benefit from treatment should get the medical help they need so they can return to work. If they refuse a recommended treatment, we will review whether their benefits should be reduced.”
Reductions in the social security budget
During the election the Conservatives were committed to reducing Social Security spending by £12 billion a year on top of savings already planned. It is estimated that removing Housing Benefit for 18-21s on JSA will lead to a saving of (at most) around £100 million – potentially much less, if exemptions are in place.
Further reduction of the Benefit Cap from £26,000 to £23,000 might save another £100 million, but with inflation running so low at the moment, freezing most working-age benefits (Jobseeker’s Allowance, Local Housing Allowance and others) may not save as much as the Government hopes.
This still leaves a large shortfall in terms of reaching the planned reductions. With the Housing Benefit bill at around £26 billion and rising, it may well be that the Government looks to that budget for savings. We will probably not know until the Emergency Budget on the 8th July whether this will happen, but options for cuts could include:
- Increasing the age at which someone is paid the Shared Accommodation Rate of Local Housing Allowance
- Reducing the way that Local Housing Allowance is calculated, to decrease the percentage of affordable properties from its current figure of 30%
- No longer paying Housing Benefit for the whole of a person’s rent, instead expecting them to make a contribution (for example 10%) themselves.
At this stage, these are simply ideas which have been mentioned as possibilities by independent commentators rather than anything we know the Government is definitely looking at.
With the architects of Universal Credit Iain Duncan Smith and Lord Freud back running the Department of Work and Pensions we can expect to see the full roll-out of Universal Credit over the next few years. Ultimately Jobseeker’s Allowance, Employment & Support Allowance and Housing Benefit will cease to exist and be replaced by this single benefit.
As homelessness agencies frequently work with individuals who remain in their accommodation for only a few days or weeks the monthly rental model of Universal Credit remains a problem. This is something on which we have been working with the Government for a long-time now, and it will stay on our radar for the foreseeable future. As a short-term solution, in part as a result of our work with DWP, supported housing is being largely kept out of Universal Credit. However, as the roll-out progresses there a long-term solution must be developed for the payment of rents in homeless projects.
This will be one of the issues at the very top of our policy priorities for the foreseeable future.
One of the most controversial proposals that the Conservatives announced during the election was the pledge to extend subsidised “right-to-buy” to tenants of housing associations. This will be introduced via a Housing Bill which will require local authorities to dispose of high value council houses in order to compensate housing associations for their loss of properties. The mechanics behind this were vague during the election and remain so today.
The manifesto also contained a commitment to increase the supply of affordable rented housing over the lifetime of the Parliament.
“We will build 200,000 quality Starter Homes over the course of the next Parliament, reserved for first-time buyers under 40 and sold at 20 per cent below the market price. We have delivered over 217,000 new affordable homes since 2010. We will now go further, delivering 275,000 additional affordable homes by 2020. And we will offer 10,000 new homes to rent at below market rates, to help people save for a deposit.”
Although there were no further details on affordable housing in the Queen’s Speech there were pledges to remove obstacles to stopping new homes building built
“simplify and speed up the neighbourhood planning system, to support communities that seek to meet local housing and other development needs through neighbourhood planning.”
“give effect to other changes to housing and planning legislation that would support housing growth”
In their manifesto the Conservatives committed to increase innovation in the delivery of public services, including homelessness.
“We have pioneered ways to deliver high-quality public services, including through getting the voluntary sector more involved. For example, our Work Programme has helped harness the talent and energy of charities to help people turn their lives around and find their way back into work. We will examine ways to build on this type of innovative approach in the future. We have also pioneered the use of social impact bonds and payment-by-results and we will look to scale these up in the future, focusing on youth unemployment, mental health and homelessness.”
Although this obviously offers opportunities, at this stage we have no further details of how and when this will take place.
Of course the advent of a new Government is always a time of much speculation about the future. We will continue to work with the Government and with parties across Parliament to try and ensure that any measures introduced do not increase homelessness or adversely impact on vulnerable people.
As ever, we will be relying on the invaluable evidence provided by our members working on the front-line to identify the potential and actual impacts of any changes introduced.