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

We expect local authorities to budget, but of course this measure comes into effect on a single day, and good landlords and good local authorities have already been looking at the existing stock of people.

It is by definition a stock of people that does not turn over very much, so it is pretty predictable. My plea to local authorities is to use the money that we have given them.

We have given local authorities discretionary money, initially with two groups in mind. The first is people whose houses have been substantially adapted for disability. We accept that if there is a spare bedroom in a house that has been completely redone to reflect wheelchair access or whatever, it is not cost-effective, sensible or humane to say, “You’ve got to move,” and then either the public purse has to pay for another property to be done up or the people have to live somewhere inappropriate. We estimate that, nationwide, roughly £25 million of the potential saving from the measure would be related to properties of that sort. Our initial plan was to try to define that centrally in regulations: what is a substantially adapted property? We then took the view that it is better left to local discretion, so we made the money available locally.

We did the same for foster families who have a spare room because they are between foster children. Most people would accept that foster parents need to have a spare room. Initially, we thought that we would support that through £5 million of discretionary payments, but the message we got back was that foster families wanted to have a right to a room and not to be reliant on a discretionary payment from the council. We have now passed regulations, which will come into force next month, that give foster families the right to a spare bedroom, subject to certain constraints. We have also recently made it clear that where, for example, a child with a disability or health condition cannot sleep in the same bedroom as a sibling, the family can go to the local authority, which, having satisfied itself that it is a valid claim, can allocate an extra bedroom.

I stress that the measure is not a crude one-size-fits-all cut. We have to save money. The right hon. Gentleman knows that we have to save money and that housing benefit is one of the biggest working age benefits that we have. He knows that two thirds of the housing benefit bill is for social tenants and that we have already cut back on the housing benefit bill for private tenants. In the context of needing to save money on social tenants’ housing benefit bill, not paying for spare bedrooms seems to be a place where we can find savings, subject to the crucial proviso that we protect the most vulnerable.

We have protected the most vulnerable through discretionary housing payments. Of course, although local authorities can use such payments for substantially adapted properties, the clue is in the title: they are “discretionary” payments. Local authorities have the payments for this purpose and for other changes. They have core discretionary housing payments that they had anyway, before any of the measures came in. Local authorities have that pot of money, which is of course not limitless and does not cover everybody, but at least it gives them the flexibility to respond to people as they come to them. The crucial thing for anybody listening to our proceedings who is concerned about the impact of the measure is that if people genuinely need the additional room, and if the options that some would take up, such as swapping, taking in a lodger or working extra hours, are not options for them, they should approach the local authority.

The right hon. Gentleman said that if people move into the private sector, it will cost money, but that is a very static way of looking at things. When somebody moves out of the social sector and into the private sector, a social sector property will be freed up that someone perhaps paying a high rent in the private sector will move into. It is not self-evident that in cases where someone moves from the social sector to the private sector, it costs money overall. Yes, we are trying to save money, and half a billion pounds will be saved by the measure, but let me set that in context: in the final year of the previous Labour Government, we were trying to fill a hole not of half a billion pounds, but of £150 billion a year. The right hon. Gentleman objects to the measure, but it illustrates the scale of the task we have been faced with. Even a measure such as this, which has been controversial and difficult, saves only half a billion pounds, and we have had to take many more such decisions to deal with the fiscal deficit.

Good things are going on in local authority areas, such as that of the right hon. Gentleman. I welcome the fact that housing associations and councils are pooling their stock to enable people to exchange. My local housing association and others have had what they call “speed-dating” events—I am not being flippant; that is what they call them. They try to bring together people from among their tenants, some of whom have a spare room and some of whom are desperate for a family home. I think of a constituent of mine who contacted me after receiving a letter about this. She said, “I am living on my own in a three-bedroom house. What are my options? Actually, could my brother and sister-in-law move in?” I said, “Absolutely. Talk to the landlord.”

That was an ideal outcome: it meant that the housing stock was better used and someone else had suitable housing.

To summarise, the way in which people respond to the measure will be individual and varied. Some will be able to exchange with someone else. Some will stay where they are, regarding £2 a day, on average, as worth paying for that spare bedroom. Some will fill the spare bedroom with a lodger. As the right hon. Gentleman colourfully suggests, some landlords will redesignate properties, so that in effect there is not a spare bedroom, and the landlord will take the cost. Some people will go to the local authority, and we have put money into the pockets of local authorities such as his—nearly £1 million in the Wirral—so that the most vulnerable people can go to their local authority and make their case and be heard.

Again, I urge the local authorities to spend the money that they have been given to help people, because we have sought to protect the most vulnerable. We have sought to protect families with disabled children, fosterers, and people with service personnel living at home. We have given local authorities the ability to respond on a case-by-case basis. None of these decisions is easy, but they are necessary decisions that we have sought to mitigate where possible. We are trying to bring about a beneficial effect: to make better use of scarce social housing stock and to create fairness between private and social tenants, which, I have to say, in the past, we have not had.

Question put and agreed to.

Sitting adjourned.