Cover the Cost: Restoring Local Housing Allowance rates to prevent homelessness August 2019 About us Crisis is the national charity for homeless people. We are committed to ending homelessness. Contents Every day we see the devastating impact homelessness has on people’s lives. Every year we work side by side with thousands of homeless people, to help them rebuild their lives and leave homelessness behind for good. Foreword Through our pioneering research into the causes and consequences of Jon Sparkes Chief Executive, Crisis 4 homelessness and the solutions to it, we know what it will take to end it. Andy Street Mayor of the West Midlands 6 Together with others who share our resolve, we bring our knowledge, Executive Summary 8 experience and determination to campaign for the changes that will solve the homelessness crisis once and for all. Introduction 12 We bring together a unique volunteer effort each Christmas, to bring warmth, Context to the Cover the Cost campaign 14 companionship and vital services to people at one of the hardest times of Policy changes to Local Housing Allowance rates 14 the year, and offer a starting point out of homelessness. The impact of Local Housing Allowance rates on homelessness 15 The impact of Local Housing Allowance rates on councils 16 We know that homelessness is not inevitable. We know that together we can end it. Restoring Local Housing Allowance rates: the case for change 21 The solution 22 Summary of findings from the research 23 Overview of the costs and benefits of restoring Local Housing 27 Author Allowance rates to cover the cheapest third of rents Jasmine Basran works in the Policy and External Affairs directorate at Crisis. With The impact on homelessness of restoring Local Housing 29 special thanks to Ruth Jacob and Sarah Rowe in the policy team for contributing Allowance rates to cover the cheapest third of rents to the section on quality in the private rented sector. Preventing homelessness from the private rented sector 29 Preventing the human cost of homelessness 32 Reducing the need for temporary accommodation 33 The impact of restoring Local Housing Allowance 38 Acknowledgments rates on poverty Local Housing Allowance rates and poverty 38 With special thanks to Crisis clients and campaign supporters for sharing their Restoring Local Housing Allowance rates lifts thousands 40 stories and experiences, and colleagues at Crisis for their help in developing this of individuals and families out of poverty report, in particular Maeve McGoldrick, Hannah Gousy, Francesca Albanese, Sorana Vieru, Beth Reid, Nick Morris, Ruth Jacob, Sarah Rowe, George Olney, A private rented sector that works for all 42 Tahmina Nizam and Arto Maatta. Ensuring good quality housing in the private rented sector 44 Conclusion 47 The following leading organisations in housing and homelessness support Crisis’ Cover the Cost campaign, which is calling on the Government to restore Local Housing Allowance rates to cover the cheapest third of private rents (the 30th percentile): 4 5 Foreword Ensuring everyone has safe, stable housing creates a stronger know the answer lies in building society that benefits us all. But currently in Great Britain, too enough affordable social housing. many people face the inhumanity of unsafe, temporary, or no But with significant investment into housing. Crisis’ research shows that unless there is a significant housing needed over the next 15 years to address the current shortage, we shift in current government policy, homelessness will more than cannot ignore the essential role that double across Great Britain. Local Housing Allowance rates play in preventing and ending homelessness now. By restoring Local Housing With currently around 170,000 This report builds on our previous Allowance rates to cover the cost of individuals and families trapped in the report, Cover the Cost: How gaps the cheapest third of rents, we can worst forms of homelessness, this in Local Housing Allowance rates make sure everyone has the support simply cannot continue. We know that are impacting homelessness, they need to keep their existing home homelessness is not inevitable, and where we outlined the problem of or move off the streets or out of that ending it for good is possible. underinvestment in Local Housing temporary housing and into a home Allowance rates on rising levels of that they can afford - so that in our In England, the introduction of the homelessness. In this second report, society, homelessness has no place. Homelessness Reduction Act (2017) we set out the inarguable case for introduced a significant shift towards restoring Local Housing Allowance homelessness prevention, and the rates to cover the cost of the cheapest publication of the Rough Sleeping third of rents. This report is based on Strategy in 2018 signalled action to research by Alma Economics showing fulfil the Westminster Government’s that restoring the rates over a three- commitment to end rough sleeping year period will prevent thousands of in England by 2027. In Scotland, individuals and families from becoming the Scottish Government produced homeless and lift many thousands a high-level action plan to end all more out of poverty. The research forms of homelessness, and is already also shows the benefits of investment Jon Sparkes implementing key elements of the far outweigh the costs by reducing Chief Executive, Crisis plan. The Welsh Government has set the need for expensive temporary up a new homelessness action group accommodation and services relating to develop recommendations on how to homelessness, meaning it prevents to end all forms of homelessness in the significant economic, as well as Wales, building on the implementation human, cost of homelessness. of the Housing (Wales) Act (2014) which focused on homelessness We have a moral duty to act now. prevention. But all of this progress Upcoming spending decisions will towards ending homelessness is in be critical to making homelessness danger of being undermined if we do prevention a top domestic priority for not tackle its root causes. Government. In the long-term, we 6 7 Foreword I left the job I loved at John Lewis to run to be the Mayor of the There is an urgent need for the West Midlands because I believed I could help restore pride in Government to act, and it cannot the region. That meant expanding the economy, and two years wait until Brexit is sorted out. The later, business growth is strong. However, alongside the cranes Government should increase Local Housing Allowance to a level where and new offices, rough sleepers are to be found in doorways 30% of rented homes in any area and at mobile soup kitchens. Behind closed doors, there are are affordable to everyone. Not only thousands of people sleeping on sofas at the homes of friends or would this help people in need, but family, families in B&Bs and vulnerable people living in some of there is a clear return to the Treasury: the worst-quality shared housing. there will be less need for costly temporary accommodation and fewer people getting into a spiral of health issues that burden the NHS and No one can take pride in that. We But the Government also has to act to public services. have made some progress in tackling tackle welfare-related poverty. Local homelessness, securing around £10m Housing Allowance is the element of We have a moral duty to tackle from the Government to roll out Universal Credit paid to those who homelessness and these changes Housing First, a model of homeless need it to rent a safe place to live. With would make an immediate and support developed in Helsinki, Finland. the rates frozen since 2016, while rents significant difference. Over seventy homeless people have are rising, it’s no wonder that many been given accommodation and people fall behind on their payments support through the scheme since and end up being evicted. Losing a it was launched in the autumn. It’s a private tenancy as a result of getting good start, but we need to go into arrears is the most common much further. reason for becoming homeless. The freeze of Local Housing Allowance To tackle the wider issue, we need rates has undoubtedly contributed to to “design out” homelessness an increase in homelessness in the from society, for example, through West Midlands. Andy Street businesses willing to hire people Mayor of the West Midlands experiencing homelessness and And these low Local Housing offering employee hardship funds Allowance rates have led many for when their workers go through landlords to skimp on the upkeep of tough times, and banks making properties, leaving tenants in poor- accounts open to people experiencing quality housing, or to move into the homelessness. It also means building supported housing sector to reap thousands of high-quality, truly the higher rates of Housing Benefit affordable homes and tackling the available, often without providing the rogue landlords taking advantage of high-quality support services that are vulnerable people. also needed. 8 Cover the Cost: restoring Local Housing Allowance rates to prevent homelessness Executive Summary 9 Executive Summary Homelessness is an indignity that no People lose their homes when the one in our society should have to face. rising pressure from high rents and Access to a safe, stable, and affordable low incomes becomes too much. home is a moral right that many of Evidence shows that ensuring there us take for granted. But currently in are enough affordable homes is the Great Britain, too many of us suffer the best way to relieve this pressure and inhumanity of unsafe, temporary, or prevent homelessness.2 The most no housing. cost-effective way to provide enough organisations, is calling for investment This means most individuals and affordable housing is to considerably in Local Housing Allowance rates to families receiving Local Housing Crisis research shows there are around increase the supply of social housing.3 cover at least the cheapest third of Allowance rates face a gap between 170,000 individuals and families However, with 100,000 social homes private rents (the 30th percentile).