Category Archives: Work and Pensions Select Committee

Housing Costs in a Reformed Welfare System

The below article written by Dame Anne Begg MP appeared in this month’s edition of  24 Housing.

Because housing costs form a large part of any household’s budget they also figure large in the benefits system.  It is not surprising, therefore, that a government who wishes to make huge cuts to the cost of welfare has turned its attention to Housing Benefit to realise some of these savings.  Over the past 4 years there have been many changes to the amount paid to tenants to help with their housing costs, in both the social and private rented sectors.  Which is also why the current inquiry of the Commons Work and Pensions Committee entitled “Housing Costs in a Reformed Welfare System” is important.

The UK social security system is often criticised for being overly complex and contains various disincentives to work.  That is why both the last government and this have attempted reforms of the system aiming to “always make work pay”. The last Labour government’s solution was the introduction of Tax Credits while the Coalition government is staking its reputation on a wholesale reform of working age benefits by consolidating most of them into the Universal Credit.

However, once you factor in housing costs the tapers which are meant to smooth the transition from benefit to work don’t always work effectively, especially in areas with high housing costs.  That’s because in this country we calculate the level of housing benefit based on the actual cost of housing in different parts of the country, not a flat rate depending on the size of your household.

What identical families living in different parts of the UK can receive towards their Housing costs can vary by as much as £1000 per month depending on whether they are in a private rent, receiving Local Housing Allowance in Central London or rent a Council house in deprived area in the north of England. Therefore the work incentives, or lack of them, can vary hugely.

The government’s reforms have been a rather blunt instrument and are only beginning to make themselves felt.  The changes to LHA introduced in 2011 only applied to new private sector tenants  or once existing tenants tenancy agreement came up for review, so the impact wasn’t immediate.  As more tenants face a shortfall between what they receive in benefit and their rent, the larger their arrears grow.  This means fewer private landlords are willing to take tenants who are benefit claimants which, in turn puts pressure on the social rented sector where there is already a shortage of properties.

The shortfall between HB received and level of rent is being replicated in the social sector with the introduction of what has become known as the “bedroom tax”.  If the policy had worked perfectly, the government’s own impact assessment shows that there would have been no savings.  Those in homes deemed too large would simply move to smaller properties freeing up the larger houses for those overcrowded, who would then qualify for more HB.  But we don’t live in a perfect world.  Councils and Housing Associations have not been building 1 bed properties for years so the smaller houses don’t exist in sufficient numbers. At the moment few are moving house, preferring to subsidise their housing from their other benefits.  However, the crunch can’t be far off as this is not sustainable for most households in the long term.

There has been an enormous outcry against the “bedroom tax”, even amongst those who believe that the government is right to be cutting the benefit bill.  I think this is because it is seen as being unfair.  It is not floor size, or bed spaces which are the determining factors, but bedrooms regardless of how small they might be.  Many of the government’s own backbenchers believe that disabled people living in houses specifically adapted for them are exempt.  They aren’t. They have to apply for the temporary Discretionary Housing Payment (DHP) to make up the shortfall. A married couple who can’t share a room because one or both of them has a disability are not exempt either.  Nor are households where it is a family member who is the full time carer.

For these households, moving is not an option, nor is increasing their income by working. So the government will have to keep paying out DHP so it makes sense that such households should be exempt.

There are a number of cases where it might even be costing the government more.  Apart from in London, many of the people who have been caught by the Benefits Cap are in temporary accommodation, which by its very nature is more expensive.  Of course some of them are in temporary accommodation because they have been evicted from their cheaper accommodation because of rent arrears caused by the government’s reforms!  A one bed private rent is likely to cost more than a 2 bed Council house but a tenant will qualify for full benefit for the more expensive tenancy, but not for the cheaper one.

All this, and I haven’t even mentioned how things might change with the introduction of Universal Credit.  Lots, then, for my committee to get their teeth into.

Dame Anne Begg MP

Chair of Work and Pensions Select Committee

16th January 2014

Dame Anne Questions Iain Duncan Smith

As Chair of the Work and Pensions Select Committee, Dame Anne led the questioning Secretary of State for the Department for Work and Pensions Ian Duncan Smith yesterday on the problems facing Universal Credit and the delay in vital information being passed to the Committee.

With the Department’s controversial welfare reforms, of which Universal Credit is the flagship, being implemented and rolled out, the role of the Select Committee is to scrutinise the Department and offer recommendations as to how proposals can be improved or amended.

During the heated questioning session, Mr Duncan Smith was accused of not being open with a Commons Select Committee and of treating it with arrogance and disrespect.

Dame Anne also raised her concerns over failings in the policies and the negative implications of botched welfare reform.

Coverage of the evidence session can be found on the following sites;

Read the full transcript on the Parliament UK website- http://data.parliament.uk/writtenevidence/WrittenEvidence.svc/EvidenceHtml/5774
Watch on Parliament TV- http://www.parliamentlive.tv/Main/Player.aspx?meetingId=14819
Guardian – http://www.theguardian.com/politics/2014/feb/03/iain-duncan-smith-universal-credit
BBC – http://www.bbc.co.uk/news/uk-politics-26020025
Telegraph – http://blogs.telegraph.co.uk/news/benedictbrogan/100257938/whitehall-is-shuddering-over-universal-credit-problems/

Visits Back-to-Work Programme for People with Disabilities

Dame Anne was delighted to visit the Shaw Trust and their centre to witness its work in action.

The visit included a tour of the centre, meeting with people with disabilities on the programme and holding discussions with staff. Dame Anne was introduced to Shaw Trust job coaches and employment advisors who provided detailed, step-by-step overviews of the intensive, tailored support Shaw Trust provides its beneficiaries to guide them into sustainable employment and independence.

Anne at Shaw TrustStaff at the Aberdeen centre emphasised the holistic nature of the support Shaw Trust offers, highlighting the assistance given to the charity’s beneficiaries to help them overcome the challenges facing them.

Work Choice is the Government’s specialist disability employment programme designed specifically for people who, due to their disability or health condition, may find it difficult to find or keep a job. Shaw Trust delivers the Work Choice employment programme as a subcontractor to prime provider, Momentum Skills, in Aberdeen.

Dame Anne Begg said of the visit:

 “Nearly half of all working age people with disabilities are out of work, underlining the need for effective employment support. People often need to be supported over a long period of time to ensure they are successfully guided into independence and long-term employment. Programmes like Work Choice, as delivered by Shaw Trust, can help get more people with disabilities into work.”

Tanya Gilchrist, Shaw Trust head of operations for Scotland, added:

“Work Choice is proving an incredibly effective programme, with over 2,500 people supported into work in Scotland so far. As a charity, Shaw Trust offers help to the most vulnerable members of society in need of extensive support. Many of our beneficiaries contend with a range of severe disabilities and health conditions, and as a result, require intensive and long-term support.”

Calls for greater transparency to make charge cap viable

Anne delivered the key note address at a recent Westminster Employment Forum event where she called on the Government to force insurers to disclose all charges to make a cap work.

You can read more about her speech here: http://www.moneymarketing.co.uk/news-and-analysis/politics/anne-begg-calls-for-greater-transparency-to-make-charge-cap-viable/2002595.article

The Work Programme is not working for those most in need

Following the Select Committee’s recent inquiry into the Work Programme, Dame Anne led a debate in Westminster Hall highlighting that, while the programme might be delivering sustained job outcomes for some people, it was not effective in helping those who have major barriers to work, in particular, those who have a disability or health problem.

In fact, where previous specialist welfare-to-work programmes for people with disabilities achieved job outcomes between 10% and 30%, recent statistics show that the Work Programme has achieved a success rating of only 5.8%.

Dame Anne said: “The Work Programme is failing those furthest from the labour market.

“Major changes to the way in which the contracts are delivered, and to how the differential pricing structure works, need to be made if the Work Programme is to begin properly delivering job outcomes for those with the highest barriers to work.”

The new Minister for Employment, Esther McVey MP admitted that the Work Programme was “not perfect”.

A full transcript of the debate can be read here: http://www.publications.parliament.uk/pa/cm201314/cmhansrd/cm131010/halltext/131010h0001.htm#131010h0001.htm_spnew22

Scope Parliamentary reception for campaign on better local disability services

Dame Anne attended Scope’s Parliamentary reception in Westminster which launched the charity’s campaign for better local services for disabled children and their families.

To launch the campaign, Sally Phillips (known for her roles in ‘Miranda’ and ‘Bridget Jones’s Diary’) was at the reception.

Taking centre stage during the reception was a giant Christmas tree adorned with handmade ‘wish stars’ decorated by members of the public and inscribed with messages to the MPs stating why supporting disabled children and their families matters.

Dame Anne said: “I am in support of Scope’s campaign and share their belief that it is vital for all who need services to have access to them in their local area.”

Dame Anne Begg MP at Scope Christmas parliamentary reception
Dame Anne Begg MP at Scope Christmas parliamentary reception