Housing benefit

A couple of weeks or so ago there was another how awful piece in the Guardian about how awful the proposed changes to housing benefit were, that is to say the changes sparked off by tales of the families of terrorists living in seven bedroom houses in St. John's Wood at taxpayer expense.

This against a background where, according to page 6 of the budget report, social spending is around one third of government expenditure and government expenditure is around £100 billion more than government receipts. Debt repayment is heading for 10% of government spending. So our books are way off balance. Unsustainable. And it is hard to see how we can get back into balance without hitting social expenditure. Even if we put the imbalance down to cyclical effects, which to my mind while part of the story, is not the whole story, there is still an awful lot of debt to pay off before we can afford whizzy new submarines, never mind more civilised treatment of the needy.

To be fair, the article does recognise that the housing benefit bill is very large and is growing, but does not think that tinkering with the rules is the way forward. It looks forward to a brave new world where there are pots of housing available at the sort of rents that the increasingly poor poor people will be able to afford.

The tinkering in question is the reducing benefit paid to people living in publicly funded social housing which is too big for them, too big in the sense of too many bedrooms according to some formula or other. Proper number of bedrooms equals the number of pairs (of any orientation) plus half the number of grandparents plus two thirds the number of children over 13 less one fifth of the number of other children sort of thing. The idea being that if you depend on the public purse for your housing you are jolly well going to have to move around a bit as your circumstances changes. No more house for life; that is a privilege for those who can afford to buy their own housing.

One catch seems to be that we have a lot of three bedroom houses and a lot of people on housing benefit are in them. (And there are even more old people living by themselves in such houses - but that is another story). But there is a dearth of smaller accommodation for the needy to move into. Not only is there not enough housing to meet the present demand, the mix of housing is all wrong. Furthermore, a less bedroom house in the private sector is apt to cost more than a more bedroom house in the public sector, so it is not clear that we save much by pushing families from one to the other. Plus, by so doing, we are lining the pockets of greedy private landlords which is a bit like bailing out Russian gangsters from the consequences of their careless banking habits.

The Guardian also highlights all the unpleasantness and anomalies implicit or in the new rules. Their application to those with households including people with special needs - either because they are very old or otherwise - may well be rather harsh.

At this point I turn to the case for the government and in reasonably short order turn up an unnumbered impact assessment with the title 'Housing Benefit: Under occupation of social housing'. The assessment, 21 pages worth, appears to be some kind of pro-forma which departments have to fill out for the Treasury or No. 10 if they want legislative action. Lots of boxes, some of which, inevitably, are not terribly relevant to this particular bit of business. Lots of management speak like 'evidence base'. All very calm and sober; no tales of wailing and gnashing of teeth at all.

I was not very impressed by the annual profile of costs and benefits, with benefits (to the general public) said to be £1 billion over two years, defined to be equal to costs (to benefit scroungers). I couldn't find another table which explained exactly where these benefits came from, although to be fair I did not read the assessment with any care. Perhaps it was designed for people with more time to spare or with speed reading skills.

An important element of the government case seems to be that all it is doing is bringing the rules for housing benefit in public sector housing into line with those in private sector housing. Which does not seem that unreasonable - although this simple assertion of equality before the benefit may be disturbed by large differences between the two sectors.

I guess the trouble is that in any change of this sort some people are going to be hit harder than others - and it is these last which the Guardian focuses on, while the assessment is much more soft focus. So at the end of the my short time on this long problem, I am not very convinced of the government case. Full marks for making the background to the policy freely available. Full marks for promising to do a post implementation review in due course (providing they remember to do it). But not so many marks for the policy itself.

PS 1: or maybe it is rather that our housing ambitions have swollen beyond our means. My wife and I spent the first year of our married life in a bed-sit, something which was not unusual at the time. And people on the continent are far less ambitious in the matter of housing than we are.

PS 2: it is well to remember that there is unlikely to be an easy solution. Big people with big brains have been working away on this with perfectly good intentions for a long time. It is reasonably unlikely that they have overlooked any easy policy options. There is no magic bullet or someone would have found it before now.