Under-Occupancy Penalty (Birkenhead)

Part of the debate – in Westminster Hall at 4:42 pm on 26th March 2013.

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Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions 4:42 pm, 26th March 2013

People in the social rented sector still benefit from subsidised rents and, potentially, spare bedrooms. The figure used by the right hon. Gentleman was of more than 800,000 spare bedrooms in households where the rent is paid for by housing benefits.

To give a sense of scale, we are asking a household with one spare bedroom to contribute £2 a day on average for having the spare bedroom. I do not belittle the financial pressures that many households are under, because it would be entirely wrong of me to do so, but we know from experience of the private rented sector that some households will decide that, notwithstanding the financial pressures on them, £2 a day for the advantage of that extra bedroom is a price that they will pay. There will also be many other responses. The right hon. Gentleman mentioned taking in lodgers, and some housing associations and local authorities have given their tenants advice on how to do that. It is good use of a spare room, because it provides accommodation to someone, such as a young single person perhaps, as well as extra income to the household, and deals with the problem.

There will be some movement in the social rented sector. In the right hon. Gentleman’s area, 20 housing associations and local authorities have come together to form Propertypool Plus, doing exactly what they should be doing, which is pooling their stock and giving a much greater chance of having something to suit a particular family than an individual housing association would have. If we facilitate someone moving from under-occupied accommodation into a house that fits, someone else who is living in overcrowded accommodation can also move to a house that fits, which seems to be an entirely good thing, although the latter person’s voice was silent in the speech of the right hon. Gentleman.

I looked at the Wirral housing strategy for 2011 to 2026, and the council has realised that under-occupation is an issue. Before we invented our policy, the local authority stated:

“Research has identified that there are a number of people who are under occupying their home, regardless of tenure,” going on to say that

“the Council will seek to help people by offering a range of services” to help them live in more appropriate accommodation. There is therefore recognition in Wirral of a mismatch between the homes people are living in and the homes that they might need, perhaps particularly in the case of older people, although I stress that pensioners are exempt from our policy.

Creative things are being done in the right hon. Gentleman’s part of the world. For example, Wirral metropolitan borough council has obtained £2 million of Homes and Communities Agency funding to work on empty properties and plans to bring 765 empty properties back into use over a three-year period. He is right to say that supply is a crucial part of the story. We want to ensure that the supply is there for people, but that will not happen overnight. We also know that initiatives to deal with under-occupation have not really worked. Simply saying, “Would you like to move to somewhere smaller?” when there is no reason for anyone to do so, has not worked, and we have to regard the spare bedrooms in social housing in this country as a precious resource, because there is not enough housing.

The right hon. Gentleman colourfully described bricking up spare bedrooms, but I can save the landlords he is seeking to send down that track the trouble. If, for example, they want to designate a property with one bedroom occupied and a spare bedroom as a one-bedroom property, they can do so. They do not need to brick anything up or knock any walls down; they can simply designate it as a one-bedroom property. They will take the lower rent, but the tenant is not under-occupying. The reduction in the spare-room subsidy would not apply because there is not a spare room; it is the landlord who takes the financial hit in that situation. Knowsley local authority has, on occasion, followed such a policy. If landlords decide that that is the best solution, we have no problem with that. Obviously, we get the saving, because we are only paying the rent for a one-bedroom property and not a two-bedroom property, so if local authorities and other landlords can bear the financial impact, that might be a part of the mix. I do not think that many will be able to do so, but questions of bricking up rooms do not arise.

I have come across cases in which housing associations have designated a box room as a second bedroom and they have been gaily claiming the rent on a two-bedroom property. Then this measure comes in and it is quickly apparent that it is not really a bedroom; it is just a box room. Part of the answer is for landlords to be honest about the nature of their properties and say whether there really is a spare bedroom that someone could sleep in. They should then designate the property accordingly.

The right hon. Gentleman mentioned fairness. I have referred to fairness between social and private tenants, but what about fairness between overcrowded households, households on the waiting list and those who are in under-occupation? In Wirral, there are 21,280 households on the waiting list for a home. Where is their voice in this debate? I may be wrong, but I do not think the right hon. Gentleman mentioned the people on the waiting list or the people who are overcrowded. Fairness is surely about them as well as the people already in occupation.

We recognise that there are some people who should not be affected by this measure. That is why, for example, we have exempted pensioners. People living in their lifetime home, who have retired and have no prospect of working again, are exempt. We have also taken the view that local authorities need money to deal with what one might loosely call hard cases. In Wirral, in the year that is coming to an end—2012-13—roughly £500,000 of discretionary housing payments were available; next year it will be not far short of £1 million. For individuals whom it would be wrong or inhumane to expect to move, money is there to make up the shortfall. Nearly £1 million in that local authority and about £150 million nationwide is a huge sum of money, provided to make sure that where the room is not really spare and where it would be inappropriate to expect someone to move out or put someone else in the room, local authorities have got the resource to respond appropriately.

It is vital that local authorities spend the money, yet we have come across cases of local authorities underspending their discretionary housing payments. Hon. Members berate the Government and say how terrible the policy is, but their local authority is sitting on cash that it has not spent to help people who have a shortfall in their housing benefit.