Anne Power thumbA new report examines impact of the coalition government’s welfare reform on working age social housing tenants. Anne Power summarises the findings, writing that government savings are lower and costs are higher than planned.

In 2013 and 2014, LSE Housing and Communities carried out a survey of 200 social housing tenants across the South West of England to find out whether welfare reform, introduced by the coalition government, was in practice helping tenants into jobs and making them better off. We found that the impact was direct, harsh and in most cases not leading directly to work. We have also talked to 150 social landlords and their tenants all over the country to understand the impact of cuts in benefits on the way landlords and tenants are managing.

Our findings are striking. Welfare reform isn’t working as planned. Government savings are lower and costs are higher, particularly disability payments due to mismanagement. The ‘Bedroom Tax’, was introduced to make social housing tenants with one spare bedroom move home or pay more rent. This has led to empty homes in some parts of the country as many social landlords in the North and the Midlands have surplus larger properties which they have under-let to small households. Tenants now compete to downsize, leaving a costly supply of empty, larger units. Often tenants simply can’t find a smaller unit to move too.

Sanctions, government-imposed penalties on job seekers who fail to meet Job Centre requirements, suspend all benefits with no notice. Many appeals have over-turned the job centre sanctions but often too late to prevent deep and sometimes tragic hardship. Housing benefit payments are also rising because evictions have forced tenants to pay higher rents in the private rented sector.

Welfare reform is directed at getting a job. But older working age bands struggle because, after a long gap, skills may no longer be usable and jobs requiring IT require considerable retraining. Former manual workers often suffer serious injuries at work and can no longer do hard labour. Benefit cuts create longer term social costs too. For example, carers and their dependents may need a spare bedroom for a foster child or sick relative or night-time carer.

The government is playing to popular attitudes. Spending on welfare, when austerity hits everyone, is not popular. There is a common belief that far more people cheat than actually do, whereas bureaucratic errors are far more common and cost more. There is general belief that people should work, whatever the job and certainly tenants we spoke to want to work. Tenants like working. But “booting” people into standing on their own feet can cut vital support lines without jolting them into a job. It can incapacitate them.

Welfare reform is underpinned by a strong belief in the value of the market; if things don’t pay, they will stop happening, so if benefits don’t pay, people will stop depending on them. This over-simplified view has led to unintended and unnecessarily harsh consequences. As tenants feel less certain that they can rely on benefits, they find job centre interviews and the threat of sanctions too painful and too humiliating, so some just disappear off the unemployment register. The number of people actually finding work through job centre action is far smaller than claimed.

On the other hand, tenants want to work whenever possible, even when pay is poor, so in that sense the strong work focus of welfare reform is positive. Tenants also like training and learning – and job centres send claimants on courses.

Tenants are adjusting to lower incomes, although paying bills is a constant juggling act and it is no longer possible to take basic support for granted. The adjustment tenants are making would be far more painful if it wasn’t for advice organisations like CAB, churches and charities that offer emergency support. Food banks help in extreme circumstances.

Social landlords are responding to welfare reform and the wider cuts they face with considerable anxiety. They know the vast majority of their 4 million tenant households are hard hit. Collecting rents becomes even more important, but far more challenging. Welfare reform has forced social landlords to recognise the need for more direct, face-to-face, front-line contact with tenants to ensure payments and help resolve problems. They develop opportunities for training and accessing jobs to help welfare reform work.

LSE Housing and Communities has developed a new programme called Housing Plus to help housing associations play a bigger role in low income communities, beyond simply providing rented housing. Welfare reform has reinforced the need for Housing Plus as most social landlords try new ideas to help their tenants survive. A Housing Plus Academy at Trafford Hall, the National Communities Resource Centre, will train both tenants and front line staff in managing welfare reform and its impact.

So where next for welfare reform? Some aspects of welfare reform are already being softened and the Department for Work and Pensions is running pilots on how to operate a locally managed face-to-face support system for vulnerable tenants in the light of the difficulties they are facing. At the same time, the election is challenging some central elements of welfare reform, such as the “bedroom tax” and Universal Credit with monthly payments which will go straight to tenants, rather than housing benefit going to social landlords as now. The private rented sector may change too, as it increasingly houses the most vulnerable, as an extension of social housing, often fully paid for by the government, with no control over rent levels or conditions.

Yet in spite of these changes and challenges, public austerity is likely to stay in place whatever government is elected, and may even become more severe if the Conservatives form a majority government. Social housing tenants feel stigmatised by receiving benefits. They feel judged and their confidence in finding work or being helped through the remote and harsh official system is low. Against this, their confidence in their landlords and their local councils is stronger where face-to-face support is being provided. So social landlords have a uniquely important role to play. There could be a much fairer and more balanced rental system if the next government decided to work more closely with and through social landlords.

Note: This article expresses the personal view of the author, based on four separate studies and surveys of tenants in the South West of England, households in financial difficulty in East London, social landlords across the country and representative tenants nationally. This article gives the views of the author, and not the position of the British Politics and Policy blog, nor of the London School of Economics. Please read our comments policy before posting.

About the Author

Anne Power thumbAnne Power is Professor of Social Policy and Head of LSE Housing and Communities


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