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Social rent 1% cut deferred by a year for specialist housing

The chancellor's planned 1% reduction to social housing rent will be deferred for 12 months for supported accommodation, the government has revealed in a U-turn during an Opposition Day debate yesterday at the Commons.

Housing minister Brandon Lewis MP said the government’s plan to cut rents in the social housing sector, originally unveiled in July, would not apply to specialised homes for the time being, while the DCLG and the Department for Work and Pensions (DWP) carry out a “fact-finding review” of the specialist housing sector.

“We will work with the sector to ensure that the essential services it delivers continue to be provided while protecting the taxpayers, making sure that we make best use of the taxpayer’s money and meet the government’s fiscal commitments,” Lewis said. “We will look at this urgently to provide certainty for the sector.”

The DWP and DCLG’s joint commission is due to report by the end of March.

Responding to questions from Labour’s Clive Betts MP, chair of the Communities and Local Government Committee, disabled people minister Justin Tomlinson MP guaranteed that supporting housing rents will be uprated by CPI plus 1% up until April 2017 during the one-year rent cap delay, and then reviewed after that.

The minister’s pledge came soon after a report from the National Housing Federation that revealed that over 40% of specialist homes could be forced to close as a result of the government’s housing benefit cap planned for April.

A spokesman for the DWP said in response to the report that “nothing will change until 2018”, a point which shadow housing minister John Healey MP contested during yesterday’s debate.

“The cut and the cap apply to new tenancies from April this year, so the problem is immediate,” Healey said. “My local housing association, South Yorkshire Housing Association has told me that ‘it takes time to rehouse anyone, let alone the most vulnerable people. Consultation on scheme closures will need to begin within a matter of weeks’.

“No one will sign contracts for supported housing when they do not know whether the basic costs can be covered. New investment has already been stopped in its tracks: one in five providers has frozen investment and new schemes.”

Conservative MPs at the debate argued that there will be long-term benefits from capping the housing benefit, with some arguing that more is spent on it than on secondary education.

Lewis then went further in promising that Whitehall “will always ensure appropriate protections for the most vulnerable in supported housing”, working closely with the sector through the government’s review to ensure that “we do that in exactly the right way”.

Conservative MP Richard Graham asked the minister to confirm that those exempted from the 1% rent reductions this year will include people fleeing from domestic abuse, homeless provision and housing for ex-offenders, and supported housing for older and disabled people.

“Let there be no doubt: this government will always protect the most vulnerable and provide them with the support they need and a safe home to live in,” Lewis answered.

In response to the government’s temporary U-turn, Clive Betts and fellow Labour MP Andrew Gwynne argued that the minister should have done the research into supporting housing benefit caps “before making the announcement in the first place”.

But Lewis blamed the “financial mess” in which he said the previous Labour government left the country for having to “make difficult decisions and move quickly”.

Speaking after the debate, the shadow minister, despite welcoming the deferrals, argued it has “taken Labour to force some recognition from Tory ministers of the devastating effect George Osborne’s cuts could have on supported housing”.

“Ministers don’t seem to understand that decisions are being made now to halt or scrap development of new supported housing, and preparations to wind up existing accommodation could start within weeks,” he added.

“Labour will continue to argue for these vital homes for the elderly and vulnerable to be exempted from the chancellor’s cuts.”

(Top image: specialist housing in Newport, credit to Telford and Wrekin Council)