Local Housing Allowance: transitional arrangements

‘Regulations may make provision for those in receipt of Housing Benefit to be entitled to claim Local Housing Allowance from the coming into force of this Act.’.—[Danny Alexander.]

Brought up, and read the First time.

I beg to move, That the Clause be read a Second Time.

This new clause relates to the treatment of awardsof existing housing benefit. Schedule 4 provides for regulations that will make provision for the transition of those people receiving incapacity benefit on to the employment and support allowance instead. However, the Bill includes no similar provision in relation to housing benefit, so I look forward to the Minister’s response.

In her previous remarks, the Under-Secretary made it clear that the Government’s intention is that the new local housing allowance system should apply to new claimants only and that it is not their intention to remove people who are in receipt of housing benefit to the new local housing allowance. The new allowance will be rolled out on a new claims only basis. Ministers have made clear previously that, after two years, the Government intend to review the situation and consider transferring any remaining claimants on to local housing allowance.

I am grateful to the Citizens Advice, in particular, for its comments on this proposal. There are a number of potential criticisms to which I look forward to hearing the Minister’s answer. First, that this is an untested approach. Under the local housing allowance, two approaches to implementation were piloted. The  phased approach meant that new claims were transferred on to the local housing allowance immediately and existing claims were transferred gradually when their claim was reviewed or renewed. Secondly, in another of the pathfinder areas, there was a big-bang approach. All the claims were transferred from day one. Both approaches were extensively assessed in the DWP’s evaluation of the pathfinder areas, which runs to several volumes. I know that every word of them will have been studied by members of this Committee.

For the natural roll-out, the DWP is now proposing a third approach that has not had the benefit of having been piloted or assessed in any of the pathfinder areas. In his response, could the Minister set out what lessons the Government drew from the evaluation of approaches one and two which have led him—if he will pardon my choice of phrase—to choose a third way in relation to the transitional arrangements?

The proposed implementation approach could be seen to undermine one of the key principles thatwould guide the development of the local housing allowance—the promotion of greater fairness. Under the Government’s proposals, similar households with identical incomes and rent levels may end up receiving different levels of housing benefits for an undefined period of at least two years. Some claimants may face a shortfall between their benefit and their rent, whereas others in identical circumstances might receive an excess.

In addition, local authorities will be required to keep the two systems of administration running in parallel. The hon. Member for Colne Valley has made repeated references to the need for rent officers to be more open. I fully agree with that, but if rent officers are going to be asked to provide information for two systems that will run in parallel for at least two years for existing claimants versus new claimants, one suspects that there is another difficulty facing that particular group of people. I look forward to hearing from the Minister how that is being thought through and why this conclusion has been reached.

That relates to another point that I hope the Minister will address. Where the local housing allowance results in a higher level of benefits, there will be a risk that some landlords—and I appreciate that this may only apply to a small minority of them—may seek to evict the existing tenants in order to let to new tenants on the higher rate of the new benefits. Although that may only apply in a small minority of cases, it is a risk that has to be weighed in the balance in relation to these transitional arrangements. It is worth noting that some citizens advice bureaux, working in the pathfinder areas, have reported many cases of landlords increasing their rent up to—

It being One o’clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at Four o’clock.