IDS’ detailed plan at odds with Conservative housing policy

Iain Duncan Smith’s new report may come as a shock to some of his Tory colleagues

Iain Duncan Smith’s Centre for Social Justice (CSJ) report on shaking up the benefits system, released today, proposes the coalescing of the current 51 benefits available for working age people into just two – one encompassing the likes of Jobseeker’s Allowance and Income Support, the other including Housing Benefit and Tax Credits.

The plans, which the CSJ hope will move 600,000 households off welfare and into work – and raise the incomes of the lowest paid by “an average of £1,000 per year” – have been broadly welcomed by Guardian and Spectator alike. Housing benefit reform, however, represents one area where the centre-right think tank’s aims would run against their own policies and those of some Conservative-run councils.

The report (p.70) details the deterrent to work posed by housing benefit being withdrawn when the unemployed find work:

Housing Benefit, the main means-tested programme though which the government helps people on relatively low incomes with their housing costs, has an extremely high withdrawal rate. This exacerbates the problem of undesirably high marginal rates.”

But the CSJ’s own “Housing Poverty” report (p. 21) last December said:

“Local authorities and housing associations must be encouraged to produce asset management strategies that would ensure that they maximise the value that they secure from those assets, and dispose of homes which were not economic to repair, in the wrong areas or the wrong unit types.”

On a similar note, a Localis report (p. 33) published in April on the “Principles for Social Housing Reform,” written by Tory leader of Hammersmith and Fulham council Stephen Greenhalgh, said:

“To continue building and publicly investing in the ‘social rent’ template which provides tenancies for life with no incentive or requirement to seek work or move on and which locks investment and people into properties, makes no sense.”

In July, Left Foot Forward reported on Mr Greenhalgh’s secret proposals to demolish 3,500 homes on estates deemed “not decent”.

In other words while Iain Duncan Smith himself promotes a policy of raising housing benefits to encourage a return to work, his colleagues are looking to restrict supply and set market rates for rents, which would squeeze the purchasing power of the benefits.

It is also worth noting that the report does not include any explanation on how 600,000 new jobs would be created in a weak labour market. The Child Poverty Action Group note that it, “underplays other barriers to work, such as lack of jobs, low pay, lack of childcare, inflexible employment practices and ongoing discrimination.”

Other responses to the report include Don Paskini who links to a Joseph Rowntree Foundation report and notes that:

“The total cost is £3.6 billion, and it would reduce child poverty by 210,000. In contrast, increasing benefits and tax credits by roughly this amount would reduce child poverty by around 1 million.”

National charity Gingerbread welcomed the report. CEO Fiona Weir said,

“We’re delighted that the report recognises that the route to help more parents into work isn’t to impose tighter benefit conditions, but to do more to make work pay.

“Benefit simplification is never easy because people’s lives are complex; we need to make sure that there is support for those who can’t work as well as those who can. But we welcome the ambition of this report to do more to help the lowest paid single parents.”

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4 Responses to “IDS’ detailed plan at odds with Conservative housing policy”

  1. Shamik Das

    Iain Duncan Smith’s new report at odds with Tory housing policy:

  2. Roger McCarthy

    I would question the general argument of this report.

    Firstly everyone knows that think tanks produce new policy recommendations – and that being new these will inevitably contradict existing policies in some way.

    Secondly the examples of ‘Conservative Housing Policy’ that IDS is at odds with aren’t conclusive.

    You actually cite not any Conservative Party policy documents but another report from the same think tank, another think tank report from Localis and a single instance of one Tory council trying to demolish some social housing.

    (strictly speaking supply or even pricing of social housing is only tangentially related to policies on Housing Benefit – logically one could still have a generous Housing Benefit system even if there were no social housing at all).

    As a construction market analyst I have some expertise in this area and have closely read the main Tory party policy documents relating to housing (e.g. April’s Housing Green Paper) and off the top of my head can’t remember them mentioning Housing Benefit at all.

    Their Welfare Policy paper only passingly mentions Housing Benefit in the same context as IDS does – implicitly criticising its role in deterring return to work – but not actually offering any specific changes.

    So given the lack of any detailed Tory policy pledges on Housing Benefit ‘IDS detailed plan at odds with Conservative housing policy’ certainly seems to be overstating it.

    There is a real story here about how such radical welfare changes will actually cost a lot more to implement in the short-medium term and are clearly incompatible with plans to cut public spending by 10% (or whatever it actually is).

    FWIW I actually see IDS shaping up nicely to be the Tory Frank Field – lionised in opposition and for the first year or two of a new government actually paid to think te unthinkable – and then unceremoniously dumped when the Treasury works out what the actual cost of his proposals would be.

  3. Roger McCarthy

    Have now had the chance to look at the 369-page tome that CSJ has produced.

    Given the complexity of the existing system it does make some – indeed many – valid criticisms.

    Indeed in some respects it is actually a quite progressive document in that it does argue for what is in effect more rather than less redistribution – although this was hardly reflected in the press commentary.

    Those of us who favour a Minimum Guaranteed Income could also see it as a significant move in that direction – although of course for the right giving everyone money for doing nothing is a love that can not speak its name so the CSJ can’t make this explicit.

    Its Achilles Heel is the blithe assumption that all one needs to do to magically create 600,000 new jobs is to tweak the benefits system to reduce the disincentives to taking low paid jobs – AFAICS their model does not factor in the likely state of the labour market and regional disparities.

    (However of course much the same can be said of Comrade Purnell’s welfare reform programme – certainly it is a good thing to move hundreds of thousands people off Incpacity Benefit and into work, but if there are no suitable jobs for them to go to all you are doing is forcibly transferring people from one relatively more generous to another less generous benefit).

    A second huge lacuna is the apparent absence of any costings for implementation – the cost of changing various benefits are scrupulously calculated to total £3.6bn as are (rather less plausibly) the positive financial impacts of moving people from welfare to work – but where are the costs of such a massive programme of organisational change?

    For instance developing a national IT system that can combine existing historical data for millions of claimants across 51 benefits into just two benefits – and integrating it seamlessly with both PAYE and the systems used by councils – strikes me as in many ways as complicated to implement as the NHS IT system and would almost certainly cost £billions.

    This more than anything else is what will lead the Treasury to kill these proposals – much as it killed Frank Field’s abortive programme a decade ago and every other programme for fundamental welfare reform going back to the fifties.

  4. richard globe

    Would a conservative government change the current housing benefit payment system, where landlords were once again paid directly instead of issuing local housing allowance cheques to DSS tenants. The present system is causing many hard working landlords a lot of un-nescessary financial worries, especially where tenants are spending the rent money instead of handing it over.

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