27th November 2017
Scope of the inquiry
In March 2017 there were 77,240 households in temporary accommodation, according to a report from the National Audit Office. These households included 120,540 children. In total, homelessness costs taxpayers for than £1 billion per year – of which £845 million was spent on temporary accommodation.
Across England, the end of private sector tenancies accounts for 74% of the growth in homeless households since 2010. According to the NAO, the capping of Local Housing Allowance benefits could also have contributed to the rise in homeless households.
Tackling homelessness is the responsibility of the Department for Communities and Local Government (DCLG). DCLG has said it will improve data around homelessness but does not yet have a cross-government strategy to prevent and tackle the problem. The Homelessness Reduction Act 2017 gave more responsibility for homelessness to local authorities and required them to have a strategy, but DCLG does not monitor these strategies.
The Public Accounts Committee will take evidence from local councils and the local government ombudsman about authorities’ progress with combatting homelessness. The Committee will then hear from DCLG about their work in reducing the number homeless households, as well as asking the Department for Work and Pensions about whether benefit reform is contributing to the problem.
Questions from Gillian Keegan MP
Q45 Gillian Keegan: Do you have any idea what is driving the increase in the number of households that are ending their assured private tenancy? That seems to be one of the drivers for homelessness, but what is the driver for that?
Chair: There is a good graph in the Report that highlights this point. It is figure 3 on page 18.
Jon Sparkes: I will start with some structural reasons that are contributing to that. In fear of stating the obvious: the affordability of the housing in the first place; access to social housing; the access arrangement for private rented sector housing; and welfare reform and restrictions to that. Put simply, homelessness has been tackled over the years either by there being enough social housing or through a welfare system that plugs the gap between what people can afford and the cost of rents. We are where we are because neither of those things are working right now.
Q46 Gillian Keegan: But we have been hearing for years that there is not enough social housing, yet there has been a little bit of a spike in delivery of social housing. It is something that has been going on for years, so why is that? Is it because we have much more demand? What are the factors that are making that change recently?
Jon Sparkes: We have had that for years, but it is also a recent phenomenon. Between 2007 and 2016, for example, the number of single homeless people obtaining a social let each year has gone down from 19,000 to 13,000. It is simply the case that with welfare being frozen, reduced or cut variously, and rents continuing to up, that gap has become unsustainable for many households.
Philip Glanville: I would echo what Jon said. Since some of the welfare reforms that we just heard Sir Robert talk about, we have seen rents go up 47% in a borough like Hackney. The amount of funding available for residents to support that rent rise has only gone up 2%. The de-linking of LHA rates and housing benefit from local rents, and then the cap on those, has had a massive impact. The proportion of people exiting the private rented sector and becoming homeless was only 7% in Hackney in 2006-07; in the last year it was 30%. The key driver is not family breakdown, domestic abuse or being in the wrong size property; it is the ending of those private rented sector tenancies.
Building on what Jon said, you have seen more people in the private rented sector in a borough like Hackney, but it is completely unregulated in terms of its affordability and the length of tenancies. You are seeing that dual effect of welfare reform and an unregulated sector. The public purse—local government and housing benefit—is having to pick up the strain, with more people coming through the door seeking housing support because there simply isn’t anything else affordable in the system. Only 3% of rents in Hackney are now affordable to a family relying on local housing allowance. That has fallen in the last seven years.
Q48 Gillian Keegan: We are trying to understand ASTs, and you have just brought up something. We were thinking that, perhaps because there is just more pressure in general in the marketplace, landlords were basically getting choosy, but there is an affordability element that is actually causing them to be terminated.
Gillian Douglas: Yes, definitely. Bristol City Council has tried to work really positively with private landlords and incentivise them to take people on LHA or just above—we have even offered top-up, rent in advance and deposit bonds—but it is understandable that most landlords want to maximise the return on their property. Therefore, if they can get working households—people who do have 30 times the monthly income as their salary—then obviously they are going to go to that market first. Some lettings agents have told us that for some properties in Bristol they will see 25 working households with the income they need to take those properties, so the people on LHA are off the radar in that respect.
Q49 Gillian Keegan: Are you using discretionary housing payments for those schemes?
Gillian Douglas: Yes, we do use discretionary housing payments. We have administered about 440 in the last quarter to prevent homelessness. That often buys us some time to negotiate with a landlord. In some cases, we have successfully worked with families to get them out of the benefit cap—especially single parents, if they can get 16 hours’ work; people sometimes do not realise that they will increase their income if they take that advice and help—but that usually just buys us a bit of time. It does not necessarily save the tenancy.
Q51 Gillian Keegan: We hear a lot about housing pressures. It is clear that we have not been building enough homes; we need to build more—but if you add the housing pressures, rental increases, particularly in areas like Hackney, which hardly anyone can afford quite frankly, and the housing benefit cap, have you got any forward predictions? We have just had this quite shocking report, which has showed a doubling of homelessness, but all of these factors are just continuing—right? So have you got any forward predictions in terms of homelessness?
Jon Sparkes: We have some. We commissioned some research from Heriot-Watt University recently to try and really pin down some of the numbers and the projections going forward. They estimated that across Great Britain there are 160,000 households suffering the most acute forms of homelessness—rough sleeping, sofa surfing, living in hostels, living in unsuitable temporary accommodation and so on: 9,100 sleeping rough.
The projection over the next 10 years, if the current policy trajectory or policy environment stays as it is, was the 160,000 increasing by 25% and the 9,100 sleeping rough increasing by 76%. The other thing they did for us was to reverse that, which was to say, “Well, if we didn’t go ahead with the welfare cuts that are programmed in for the next five years, what would that do to those projections?” And they saw their 20-year projection reduced by 33% by not going ahead with welfare changes that are programmed in.
Q52 Gillian Keegan: Which cuts are you talking about specifically? The housing benefit cap?
Jon Sparkes: Yes.
Q53 Gillian Keegan: You mean stopping the housing benefit cap?
Jon Sparkes: Yes, stopping the changes that are programmed in. Similarly they looked at if you follow the very best practice on prevention across all local authorities then similarly it would reduce that long-term projection by a third. So what the numbers demonstrate is that they will go up and down with policy; they are not just some sort of random shift in the system. They go up and down.
Q54 Gillian Keegan: But the cap was introduced because you had the opposite: you had working people having very inferior properties to people who were on benefits, which they couldn’t afford, in those areas. It was to try and get some measure of fairness; so surely it is social housing, or alternative ways of housing. Have you looked at some of the more innovative schemes, like the one in Lewisham? What stops you from being able to do that as local authorities?
Philip Glanville: I think it is working households suffering in the system now that are being priced out of the private rented sector. We haven’t seen rents fall with the introduction of the LHA cap. They have gone in the exact opposite direction.
I think you can do work like we do around single homelessness; we have a prevention service. We are pioneering No First Night Out, looking at those that might be at risk of rough sleeping, moving out of sofa surfing, and things like that; but they are only very small, limited interventions. They are not going to shift the numbers that we have seen. We have seen a 117% rise in only seven years in homelessness—that is families, and that is children.
I think the only response to that is actually really investing in new affordable social housing, council housing, in a borough like Hackney, and seeing real rental reform in the private rented sector. Those two things are the only real answer. Anything else around that is just sticking plaster on this crisis.
We have done some projections, which we have put to CLG, around a possible deal that Hackney could do around the lifting of a debt cap. If we invested in the same way that housing associations are able to—using the HRA; the housing revenue account—we could reduce temporary accommodation costs by £100 million and take 1,000 people out of temporary accommodation in the next five to six years. That would make a meaningful impact on both the housing benefit bill and those individuals’ lives.
Q60 Gillian Keegan: I think we got that point. You just mentioned 300 houses being brought back into repair. I have heard in my constituency about there being lots of voids. I think there may be some kind of pressure on rent increases, maybe due to the fund for refurbishment. In a place like Hackney particularly, why are those houses not always kept in full repair? What blocks that?
Philip Glanville: Our general voids are at an all-time low, but we are doing large-scale regeneration and developing new homes across the borough. We are building 4,000 homes over the next couple of years and demolishing homes that are not fit for purpose. Rather than seeing those homes let out through guardians, we have decided to invest in them and bring them back into use for temporary accommodation. Obviously, if they have been flats before, they have separate bedrooms and separate facilities, so they do not come with some of the challenges for people in shared accommodation or shared rooms. That is what we have been doing to meet that objective.
Q61 Gillian Keegan: That should improve things. Something we thought we picked up in the NAO Report was that it seems we have created some kind of incentive whereby properties that used to be longer-term let premises are being turned into nightly hostels to try to optimise the profit. Have you seen that in either of your boroughs? Have you seen that, Mr King?
Chair: Let us start with Ms Douglas.
Gillian Douglas: We have concerns about some hostels that are not commissioned by the city council and not subject to the same scrutiny and that we do not nominate to, but they still fulfil a purpose, especially in terms of single people and rough sleepers, of which Bristol has about 90 on any given night.
It is very difficult to say to people, “You’re better on the street or in a tent in a park than in some of the private sector hostels.” But yes, some of those hostels are looking to get exempt accommodation rates. It is up to our benefits team to regulate that and ensure that they are providing the support they say they are providing to be able to claim those levels of housing benefit.
Q63 Gillian Keegan: And that comes across clearly in the Report. The money is all being spent in the wrong way, effectively; so what would you do? You see this from a crisis situation. Clearly it is going to take time to build new homes. Clearly voids we need to move on, as quickly as possible. What are the other innovative schemes that you would implement?
Jon Sparkes: One of the other points about hostels, as well as being more expensive—and we completely understand the use of hostels where there is an emergency, and where there is no alternative—is that there isn’t the evidence that even says that people then move on into sustained tenancies, when they have been in the hostel system. So not only is it more expensive, it is less effective.
A piece of work we just did in Liverpool city region looking at their hostels and what they would have to do to their system to move away from a hostel-by-default system to a housing-by-default system showed that of people going through the hostel system, only 15% were then going on to sustained ongoing tenancies. All of the international benchmarks and all of the UK benchmarks—on Housing First, for example, which is a technique used with people with more complex needs, to move them straight from the street to housing and wrap around the support for them—say 80%, 85%, 90% sustainment. There is a project in Manchester called Threshold which works with women who have offended: 90% tenancy sustainment over two years and zero reoffending, in their particular case. So there are examples.
Of course, in all of this the difficulty is moving from one system to another. If you move from one system to another you need investment to double-run the system—otherwise your only alternative is to go into the hostel system; but the evidence is all there that, particularly with people with complex needs, the Housing First approach is both effective and more cost-effective.
Q76 Gillian Keegan: Ms Dawes, we are spending more than £1.1 billion on homelessness services, but we are spending more of that on firefighting and crisis management than on actual prevention. We therefore have an unsustainable model that is not solving the problem. What is your Department doing about that?
Melanie Dawes: Well, can I say thank you for inviting us to give evidence today? I think the approach that the Government is taking for the future does recognise that we need to focus even more on prevention. That is in the end where you get the best value for money. We know that it costs around £500 to help somebody when they are are still at that early stage, and it can be 10 times that much later on when they are in need of temporary accommodation. So I certainly agree with that overall premise; it is very much the one that Government policy is built on. But you will always need a safety net. So I think we will always see the need also to spend to some extent on helping those who are in crisis through temporary accommodation, through other services and so on.
Q77 Gillian Keegan: Sure, but it is taking a much bigger part of the budget right now. Would you accept that?
Melanie Dawes: We have certainly seen an increase in temporary accommodation, yes. We have seen overall spending by councils on prevention and other services broadly stable over the last few years. But, as I have said, this is something we want to see councils feel able to do more up front on.
I think the other thing I would say is that at the beginning of this year we shifted what used to be the old temporary accommodation grant for councils—that turned into something that is much more flexible for them. So, rather than having to respond simply to a system dictated by the welfare system, they now have the money in their own hands, and many of them are now using it to put money further up front in the system and to invest in prevention. That has given them more flexibility, but it is still very early days.
Q78 Gillian Keegan: You have had quite a light-touch approach—it has been kind of devolved down to local authorities—but during that time we have seen a massive increase in homelessness, we do not have a sustainable model, rents have shot up and the assured tenancy has been a massive problem in terms of people being evicted from their homes. All this has happened on your watch, when you have had quite a light touch. Surely local authorities need much more support to get this right, and your Department has been failing them in that.
Melanie Dawes: I think that rather overstates the case. I accept we need to do more in a number of areas. The greater ambition the Government has, as was clearly echoed in last week’s Budget, to tackle rough sleeping, but also the introduction of the new Homelessness Reduction Act from April, will significantly change our approach. It is going to require us to get much more closely involved in working with local authorities, overseeing what they do and supporting them. We are getting ready for that. We now have a team of advisers in the Department who are expert. They have come in mostly from local authorities and from voluntary sector organisations that have been working on homelessness services, and they are already beginning to draw together local authorities and start to help them to get ready for the Act.
Q79 Gillian Keegan: But it is clear that this has been looming since 2012-13. Why has it taken you so long?
Melanie Dawes: You are asking partly questions of policy and partly questions of departmental performance. During those years, we have been investing quite a lot in innovation. We have had social impact bonds. We have had a number of other projects where we have been trialling new approaches. As I said, a couple of years ago we took the decision—our Ministers took the decision—to change the way the temporary accommodation management fee was administered, to give local authorities more flexibility. So we have been active in these areas, but we are certainly stepping up our effort now.
Q80 Gillian Keegan: I don’t doubt you have been active. What we are trying to establish is whether you have been effective. The results are quite shocking, and what is most shocking is this. You have referred to rough sleepers, and rough sleeping is mostly what we think of as homelessness, but that is not actually the biggest problem, is it? Many, many more people—indeed, many working families—are falling into homelessness. This is a very different phenomenon. It seems it has appeared but we are all quite surprised, including you.
Melanie Dawes: I don’t think we are surprised. The figures have shown that homelessness has risen in a number of different forms, as you say, at all ends of the spectrum, over recent years.
Q81 Gillian Keegan: When did you first realise that this crisis was looming?
Melanie Dawes: The data has shown that increase for a number of years.
Q82 Gillian Keegan: But when did you first realise you had this kind of crisis on your hands?
Melanie Dawes: I think you are asking a question here of overall Government policy and strategy.
Q83 Gillian Keegan: No, I’m asking about measurement and seeing what the impact of Government policy and strategy is locally. It is not about policy; it is about measuring where you are spending the money and what is happening in the local authorities and in all the areas when you see that the policy is not working.
Melanie Dawes: The data has been clear for a couple of years, and we have responded to that in a number of ways, as I have just described. What was drawn out very clearly from your panellists just now was the extent to which this is also a reflection of the wider problem of affordability and availability of housing in general—
Gillian Keegan: And we will get on to that.
Melanie Dawes: Certainly of homes to rent, but also of homes to buy. And again, you have seen my Department, I think, being very active in those areas for a number of years, but particularly in recent months and years.
Q88 Gillian Keegan: What is concerning is that many strategies were put in place in the past that seemed to be very effective and then suddenly they are all undone, and we are now back without any real highlighting of this looming crisis from the Department responsible for it. It seems that we are going backwards, and we were doing quite well.
Melanie Dawes: As I said, you are partly asking questions of Government policy.
Q89 Gillian Keegan: It is not Government policy to increase homelessness.
Melanie Dawes: During the 2010-15 Parliament, as you may know, there was certainly a shift towards putting more responsibility on local authorities for their own strategies rather than having teams of civil servants monitoring them on a very regular basis. That policy of localism was certainly the Government’s strategy of the day. It is important that, as we now get more active in the Department—we are now doing that, as I say—we respect that local authorities in the end are in charge of what goes on in their areas, are accountable for that, and are often best placed to work out the detailed strategies that need to be put in place. We are, however, going to be significantly upping our effort over the coming months and years. We are already doing so. Improving our data, for example, is another big investment that is going on right now.
Q90 Gillian Keegan: It seems, as well, that one of the causes of this spiking again is some of the changes in the benefits system. How much were you aware of those, and how much did you model the potential impact of changes, for example, to housing caps and so forth on homelessness or the risk of homelessness?
Melanie Dawes: First, as I said, the issues we have seen are ones of wider affordability in the market. That has clearly taken place over this period. We have seen rents rising very rapidly, particularly in some areas. As the NAO Report draws out, where we have seen the fastest rising rents, we have seen the fastest rising homelessness. There is a clear link, as you heard from your panellists earlier.
On the question of welfare reform, again, my DWP colleagues can speak to that, but we keep very closely in contact with them. When there are major changes in a Budget or a spending review, we do work together. Our analysts, in particular, work very closely together. It is part of the process of government that when there are changes to one Department’s policies, those are discussed with others so that any wider impacts can be taken into account. We do that as well as we can.
Q91 Layla Moran: So you predicted the rise that has happened over the last few years.
Melanie Dawes: I don’t think it’s the case that we can say that the rise has been caused by any particular factor. One of the things that the Report says is that we should do more work to look at the causes of homelessness, and that is something we are very actively thinking about with DWP.
Q92 Gillian Keegan: If you have rising rents and a welfare cap that is way below the rising rents, surely it doesn’t take much to understand that that could be a root cause of this problem.
Peter Schofield: Shall I come in on that? The key thing, Ms Keegan—it is brought out very well in the Report—is the fact that homelessness is an incredibly complex situation. For any one household, there is a complex chain of issues that will be happening. It is very difficult to say there is any one particular cause of homelessness, but I would just add to what Melanie has said—
Q93 Gillian Keegan: A lack of a house is one. In this case, that is being exacerbated by rising rents and the welfare cap not keeping up with those rents. We have seen that. It is clear in the Report. I know there are complex issues, and that is perhaps a secondary issue. There are many, many people in this Report who have just lost their homes.
Peter Schofield: I think you are making two points. The first is: do we work well together as Departments? I would just echo what Melanie has said: from the working level in terms of analysis, to the senior level and the way Ministers come together in terms of decisions at fiscal events, that works seamlessly. As some of the Committee may know, I have worked in both Departments, so I have seen it from both sides of the house. The thing that has really struck me is how well this works at local level as well. One of the things I hope we will get into is the way that, for example, DWP staff in jobcentres work very closely with claimants and then with local councils in terms of trying to make an effective outcome.
Q94 Gillian Keegan: So can you explain how you would solve this? We heard earlier that the average rent is £1,200 and the LHA allowance is £780 in a very competitive housing market such as Bristol. How would you solve that?
Peter Schofield: The Report sets out very clearly the basis on which the LHA is set. The LHA was previously set at the 30th percentile in terms of market rent. In terms of what the graphs show—
Q95 Gillian Keegan: And it is not adequate in many cases now, is it? You can see that in figure 6 on page 23 of the Report. “Weekly rent available below LHA rate” is the small orange bit at the bottom, and then you have the yellow, which is kind of on target. You then have the red, which is, “Weekly rent available above 30th percentile.” All the red is the problem.
Peter Schofield: Well I do not want to trivialise this, but let me just be clear about what this graph actually shows. This graph has picked this 25 areas where there is the biggest problem, so it is not representative. These are the 25 areas where there is the biggest problem.
Q96 Gillian Keegan: We would accept that homelessness probably does come in specific areas, but they are the areas where people are homeless. So they are the right areas to measure for the problem.
Peter Schofield: I accept that, but I am just trying to give you a picture of what this graph is showing. The top of the red—I was talking to Aileen of the NAO about this only on Friday—is basically the most expensive three-bedroom property you could rent in that area. That is entirely irrelevant to the claimants, to our customers, who we are talking about. The key thing to focus on is the thing where you really need to narrow in on the orange part.
Q97 Gillian Keegan: And there are not enough orange houses, are there? There is not enough supply at that level, I think. That is another thing we have been hearing.
Peter Schofield: Is it worth just stepping back in terms of the local housing allowance policy? The object here, first and foremost, is partly to reduce the cost of housing benefit, so you would expect there to be a gap that grows, because that is how we are delivering savings to housing benefit, but it is accompanied by two really important things. One is that, since the freeze on the LHA, which came into force in April 2016, we have been recycling 30% of the savings into targeted affordability funding. That targeted affordability funding is then used to raise, in a targeted way, the LHA in those particular places where there is the biggest affordability problem. The Chancellor announced last week that that was going to be increased to 50% for the next two years. From next year 50% of the savings from the LHA cap will be recycled into targeted increases in the LHA and that also applies in some of the places in London where there was already a cap on the amount that that could go up to.
Q98 Gillian Keegan: And how many areas is that going over?
Peter Schofield: In the current year that has been 48 of the rates. We know that this will provide an additional £125 million over the next two years to go into this fund. Ministers will make decisions about how to target that in the future. Alongside that, as the Committee has already heard, we have the funding for discretionary housing payments. Discretionary housing payments in the current year total £185 million and that is then available to local authorities in the way you have heard from the previous panel.
Q99 Gillian Keegan: So it is clear that you will have some savings in DWP because of the welfare cap changes, but have you actually looked at the knock-on impact of the savings there and the increased cost to other Departments, including the local authorities, or indeed to the people who are now homeless? Have you modelled how much you have saved versus how much cost has been shunted onto other areas and much more expensive solutions?
Peter Schofield: The real challenge here—this goes back to what Melanie was saying about the challenge of data—is trying to understand the causes of homelessness. I think paragraph 3.9 in the Report is rather good, because it talks about some of the limitations to data, and the following paragraph talks about the sorts of changes we are going to see going forward from April next year when DCLG colleagues will have access to data, which does not just tell you what the particular trigger was when someone moved into homelessness, but it will actually tell you a bit more about the journey that claimant has been through from the moment they first presented to the council.
Q100 Gillian Keegan: So you don’t have a model today to do that? You could make assumptions to model this. It is quite clear how you would develop a model from this Report.
Peter Schofield: The basis of our decisions, in terms of the targeted affordability funding and the discretionary housing payments, was to provide provision that enables our customers to make the transition if they are effected by the LHA cap. Our whole objective here is—
Q103 Gillian Keegan: How are you going to prevent that money going, as it looks like it is at the moment, into nightly accommodation and unsuitable accommodation? As a result of whatever has happened or not happened, the market has changed, and you have new entrants, with what used to be long-term lets now being nightly lets at much greater rates. That money is just being wasted.
Peter Schofield: This is where we have worked closely together.
Q104 Gillian Keegan: Are you not working closely together today? It doesn’t look like it.
Melanie Dawes: We are working closely together and always have done between DWP and DCLG on these issues. The question of how we spend temporary accommodation money is for my Department. The Report draws out that there have been changes. More of that money is going on nightly paid accommodation. That is, to some extent, a concern. It doesn’t mean it is always going to be a value-for-money concern, but we need to do more to understand this. The NAO Report recommends that.
A very important part of the Homelessness Reduction Act is that next year, for the first time, we will be able to have proper data on cases of homelessness. We will be able to link for the first time someone’s journey through the system, from when they first present right through to the interventions they have and then whether they go into temporary accommodation and, if so, for how long. For the first time we will be able to understand unit costs for TA, which we cannot do now, which will enable us to do much better research into some of these areas.
Q105 Chair: Ms Dawes, with all respect, most councils worth their salt could do that now. They have a very clear understanding—our witnesses were a good demonstration—of the financial challenge and the human cost of people going through the system. You are making out that a great revelation will happen next April and thereafter, but it’s not really, is it?
Melanie Dawes: The Committee often rightly says that DCLG needs to have a system-wide view, and for the first time we will able to take that view, because we will have proper system-wide comparable data.
Q106 Gillian Keegan: But it’s quite passive, isn’t it? This is a light touch. You could model this today. We have looked at the many links between welfare benefits and housing shortages and the knock-on impacts on mental health and prison services. You could model this all today. You will have proper data, which we can use to update it, but it is all very passive, light touch and waiting for this to present itself. Meanwhile, a lot of families that were not homeless a year or two ago are now effectively homeless or living in very unsuitable accommodation and cannot get on with their lives.
Melanie Dawes: We absolutely do see this as a concern. I share your concern that there are families in unsuitable accommodation, and that is something we are very committed to tackling with our Ministers, but I don’t think we are passive—I really don’t. In recent years, and particularly over the last two years, we have put a huge amount of effort into devising a new approach and working with the private Member’s Bill that became the Homelessness Reduction Act. That is a very significant change indeed. It is only possible because of some of the investment we have made into understanding preventive approaches, and we have done that over the last three to five years. I don’t think we are passive.
Q118 Gillian Keegan: Together with the data you are going to collect and the new initiatives you are implementing, what is your goal in terms of homeless reduction? What are the numbers going to look like by when? Do you have real targets? I do not sense a measurement that you are measured by. Do you have targets?
Melanie Dawes: Our Ministers have not set out an overall target for what they want to achieve on homelessness reduction—
Q119 Gillian Keegan: Have you ever had one in your Department?
Melanie Dawes: There were targets for homelessness in the mid-2000s, yes. We have not had targets—
Q120 Gillian Keegan: When it was lowest—
Melanie Dawes: That was when we had the very highest levels, which are still higher than those we have seen recently.
Q121 Gillian Keegan: So those targets were effective in bringing about some action, weren’t they?
Melanie Dawes: Well, there was a very concerted Government strategy at this time—this is obviously way before my time in the Department. And there was significant activity from the Department. There were new legislative approaches and so on and alongside that went some targets. Particularly on rough sleeping, the Government has a clear target to halve rough sleeping by 2022 and abolish it by 2027. On homelessness more widely—
Q122 Gillian Keegan: And that is a smaller number. That is why I am trying—
Melanie Dawes: Exactly. On homelessness more widely, we are clear that the Act is the big change that we are implementing, and as I said that comes with lots of change for us: on data, on more activity from the Department and so on. We do not have a single number for that. Our new burdens estimates, which we may come on to, do assume that we will see some reduction there. That is not at this stage a target, but it is something our Ministers may well consider in future.
Q130 Gillian Keegan: Yes, I think many will have problems, particularly where we have seen the crunch points here. It is clear that the real long-term answer here is to have good quality social housing at affordable rents, so what can local authorities do without central Government support to encourage building for social rent rather than affordable rent? It is clear where the answer is here. Instead of waiting a couple of years for the data and so on, what can they do right now to start to address this problem?
Melanie Dawes: First, can I just be really clear about one thing? I am not saying that we are waiting for the data; I am saying that we are improving the data, which is going to significantly improve our ability to do analysis and evidence. We are introducing the Act in April. That has taken several years of work. We haven’t waited for the data; we have used the evidence that we have. It is frustrating that it takes a long time to get that in, but we are not waiting for it.
On affordable housing, I absolutely agree. In the end—
Q131 Gillian Keegan: Social rent, not even affordable rent.
Melanie Dawes: Yes. I agree about that, too.
Q132 Gillian Keegan: A 50% rate as opposed to the 80% rate.
Melanie Dawes: We have more than £9 billion for affordable housing over the five years to 2020-21. That has been increased over the last year. The first thing I would say is that I do not think councils can do all this on their own. They need grant support from central Government, which is being provided on quite a large scale over the coming years.
Q137 Gillian Keegan: Can I just go back to housing? In my area, Chichester, there are quite a number of housing association properties that are empty and need basic refurbishment. I think some change in the rent cap has made that less likely or meant that there are fewer funds available. Have you looked at that as low-hanging fruit, to make sure that every property that is void is made good within a short period of time?
Sally Randall: Obviously, housing associations are private bodies, but they are regulated and expected to operate efficiently. One of the measures of efficiency that they benchmark themselves against is the period of turnover between a property’s becoming vacant and its being let again. It is not something we regulate directly from central Government, but it is something we look at. We would expect an efficient housing association to have a rapid rate of turnover between a property’s becoming vacant and being ready for re-letting.
Q138 Gillian Keegan: Have you heard that the rent caps that were put on have had an impact on their ability to fulfil that promise?
Sally Randall: To be honest, no, we haven’t, and we are in very regular dialogue with housing associations. They have certainly said to us that they have had to make changes to their forward-looking and cyclical repairs programmes, to make adjustments and find efficiencies in order to live within the rent reductions that were put in place from 2016 to 2020. I have not had a housing association say to us that that is causing longer void lengths. It is not something that has been reported to us.
Q152 Gillian Keegan: Turning back to Mr Schofield, a quarter of the people in the private rental sector are on benefits. It is clear that this is the sector that has been most affected by a competitive market. Have you considered, studied or modelled the impact that Universal Credit will have on this marketplace in terms of the drivers for homelessness and private rental availability?
Peter Schofield: There is quite a lot packed into that question. In terms of the impact of housing benefit reforms on homelessness, I would go back to what I was saying at the beginning of the hearing—
Gillian Keegan: Universal Credit in particular—have you looked at that with the different timeframes and kinds of schemes?
Peter Schofield: Robert has described the changes that have been made to Universal Credit as part of a budget change—
Gillian Keegan: Will it help these figures?
Chair: Let Mr Schofield answer.
Peter Schofield: In terms of some of the measures that we are talking about: first of all, the housing benefit run-on that Robert described, in which housing benefit continues to be paid for two weeks, that is clearly a benefit to our claimants, and Robert described how that would work in practice; the access to advances that will be made available from the beginning of January so that a claimant can access the estimate of the full month of their entitlement as an advance up-front, and can pay that back over 12 months rather than six months, that will certainly be a help to our claimants; and, obviously, the removal of the seven-day waiting days. All of these are there to advantage our claimants and I think they have been widely welcomed.
Q154 Gillian Keegan: Of course that makes sense. However, what perhaps makes less sense and maybe has caused some of this is that at the same time as when there is a known housing shortage and predictable rent increases in the private rented sector—as the same time as all that is going on—you put in place a policy that in most cases that we have heard about is about half of the need, in terms of housing benefit. Those two policies together is why we are asking the question—did you consider them in tandem?
Sir Robert Devereux: Yes. Two things—first, some of the sums in the benefit world are very large, so when Ministers go for making savings they are talking about savings well in excess of any of the numbers you have talked about this afternoon for a start. Secondly, as the Report makes perfectly clear, despite that fact a lot of people who are actually renting below the LHA and all the ones above it are choosing to do that. Some part of the policy we are trying to do is to give people the choice to do it. We do not go around telling people what they can and cannot rent.
Gillian Keegan: Everybody would like to if it was available, I would have thought.
Sir Robert Devereux: The point I am making is a slightly different one. When it says in the Report that some people are, as it were, paying more rent than the LHA provides for, then that is a choice that is in a sense is a function of the way in which the system is working. But coming back to the homelessness, which is the point of this particular hearing, the quantum of homelessness is in my view a function of the numbers of people chasing homes and the supply of those homes, together with people’s choices about either occupancy or household formation.
Q155 Gillian Keegan: But they don’t get a choice. One of the big drivers was this assured tenancy. They have been evicted—
Sir Robert Devereux: With respect, you can’t evict people while they are in a tenancy. If there is a competition at the end of a tenancy for the price, as one of your colleagues has said, the landlord says, “Look: this house is worth a lot of money. I’m going to put up”—
Q156 Gillian Keegan: I get that, but I just don’t get that you think there is choice.
Sir Robert Devereux: There is choice in the sense that people are clearly choosing—even with the money that we provide—to pay rents in excess of the LHA rate. The Report says that. I am not saying that that is a good thing; my point is simply that in a world in which the choices in front of Government are to think what is the best way to play this—
Q172 Gillian Keegan: I am a little concerned. We have 77,000 households in temporary accommodation. Clearly that is the problem we are trying to solve. We recognise that in quite a few areas around the south-east and London in particular, social housing is the only thing that will deliver truly affordable rents—and even that is probably questionable in London. You have been talking much more about affordable housing, but affordable housing that is 80% of market value is not going to solve this problem most of the time. We are on a trajectory where this will just increase exponentially, and nothing is going to change unless we focus on getting the right housing. I don’t see a plan for that to happen. What is your plan to address that in particular?
Melanie Dawes: The choices our Ministers have made so far are to put significant funding in—
Q173 Gillian Keegan: Into affordable housing. You keep talking about that.
Melanie Dawes: Into the affordable housing programme, but that includes some flexibility on homes for social rent for the first time in a number of years.
Q174 Gillian Keegan: Flexibility for?
Melanie Dawes: Sally may want to say more about this, but the reason the Government moved towards affordable rents at 80% a few years ago is that, that way, the grant goes further and you get more homes built. There is always that trade-off. In many parts of the country, affordable rent is actually fine. It is particularly in high-demand areas that social rent is often still needed.
