On 17th November 2015 the House of Lords debated at Second Reading the Government’s Welfare Reform and Work Bill. The Bishop of St Albans, Rt Revd Alan Smith, raised concerns about potential impact on vulnerable adults, both in the proposals for supported housing and for those receiving the Employment Support Allowance. The Bishop of Durham also spoke in the debate.
The Lord Bishop of St Albans: My Lords, I will pick up on some of the themes that have been raised by some of my noble friends who have spoken today, particularly on the area of vulnerable adults and those who are disabled. I invite the Government to think about two issues in particular. The first relates to the clause in the Bill legislating for a mandatory 1% annual reduction in social housing rents over the next four years. I, like other noble Lords, understand that the Government have their reasons for introducing this mandatory reduction, not least the considerable savings on housing benefits that such a rate reduction would deliver. I welcome the discretionary power that the Secretary of State will have to waive the requirement for rent reductions. This will go some way to protecting those housing associations which find themselves financially exposed due to circumstances outside their control.
What concerns me most about these measures is the direct and indirect effect that they might have on the supported housing sector, which provides vital accommodation and a degree of independence for vulnerable groups such as the mentally and physically handicapped, the homeless, those with addiction issues and those fleeing domestic violence. While I welcome the DWP’s indication that there will be an exemption from the rate reduction for specialised housing support, that constitutes only a very small subset of the supported housing sector, and I do not believe that the exemption goes far enough.
Because of the various needs of the tenants, supported housing is far more expensive to maintain than standard social housing, creating an extra cost burden on supported housing that is inevitably reflected in smaller operating margins. One supported housing provider has pointed out that its housing is on average 64% more expensive to provide than standard housing, while one large, mixed-sector housing association has calculated that the proposed rent reduction would leave one-third of its supported housing stock making a loss. Given the small margins involved, it seems highly likely that a forced rent reduction in supported housing will endanger the supply of supported social housing in this country. Smaller housing associations which are devoted to the supply of supported housing might be simply unable to absorb the rate cut, while larger housing associations with a variety of housing stock might find themselves forced to get rid of their most unprofitable supported housing. New supported housing developments would inevitably be postponed and, even where supported housing remains viable, it is likely to face staff cuts that would lead to a drop in the standard and provision of care for some of the most vulnerable people in our society.
Any of these outcomes would not only be bad social practice, but be bad economics. Any measure that increases the number of vulnerable people in unsuitable accommodation, or the number of those experiencing homelessness, is only going to increase the wider financial burden on the state. Given that other measures in this Bill are liable to increase the pressure on the social housing sector, such as the benefit cap as applied to homeless households and the proposed changes to the support for mortgage interest scheme, it seems ill advised to place this vital service under undue pressure.
There is, of course, a simple solution to all this, which is to exclude supported housing from the measures in this Bill. Given that supported housing forms only a small proportion of wider social housing—estimates put it at around 4%—the cost of such a measure would be relatively small, and would certainly not prevent the Government from making significant savings on housing benefits. That is one way in which we can seek to ensure that the most vulnerable in our society are properly protected, and I urge this House, and indeed the Government, to consider any such amendments if and when they are brought forward.
I also want to raise a more general point of concern about how this Bill impacts vulnerable disabled adults. The Government have rightly given some protection to the most vulnerable disabled people in protecting the current employment and support allowance support group component from cuts. Yet even this group, which the Government have promised to protect, will face a cut in real terms through the freeze on the basic ESA allowance. The Motor Neurone Disease Association has estimated that the freeze will leave those suffering from terminal and degenerative illnesses over £250 a year worse off by 2020, when the projected rise in prices is taken into account. This is deeply problematic, both in that it is liable to put an extra burden on those who might be nearing the end of their life—and something like motor neurone disease hits people with incredible speed—and in that it sends the wrong message to those who should have our fullest support. I would welcome a comment from the Minister about whether Her Majesty’s Government would consider measures to mitigate the impact of the rate freeze on those in the support group.
I also find myself deeply concerned about the substantial reductions in benefits for those in the ESA work-related activity group. This issue has already been discussed by those far more knowledgeable than me, but I want to make one point before I finish. The work-related activity group is formed of half a million people who, as has already been said, have been medically assessed as not fit for work. This includes those with cancer, mental health issues, musculoskeletal diseases and even progressive and incurable diseases. They are people who are in a deeply vulnerable position. Those who have had members of their own family hit by these illnesses realise just what a huge and devastating impact they make—and how quickly they can hit. In no way should they be treated as your average jobseeker, just because there is a hope that with the right training and support they might one day be able to re-enter the world of work, yet that is exactly what this Bill is in danger of doing. I urge the Government to reconsider this aspect as we go through to the next stage.
Lord Freud: [extract]…employment support provides an opportunity to begin talking to ESA claimants about their ability to work. A positive relationship with a work coach, combined with evidence-based methods for goal-setting and striving, offers a promising way towards moving ESA claimants back into work. We will be increasing the practical support with new funding. The noble Baronesses, Lady Sherlock, Lady Manzoor, Lady Doocey, Lady Browning, Lady Meacher and Lady Gale, the right reverend Prelate the Bishop of St Albans and the noble Lord, Lord Patel, argued that these claimants have been found unfit for work. The ESA claimants in the work-related activity group have been found to have limited capability for work. This is very different from being unfit for any work and, although they are not required to look for work, ESA explicitly recognises that claimants may be able to undertake some work via the permitted work rules. This change, combined with the new funding, is about providing the right incentives and support to encourage more people to move closer to the labour market…
…A large number of noble Lords talked about social housing rents. The answer to the noble Lord, Lord Smith, is that the Government were elected with a mandate to put welfare spending on a sustainable footing to reduce the deficit. We are confident that housing associations and local authorities will be able to find and make efficiencies to accommodate the new settlement.
On specialist supported accommodation, which a large number of noble Lords brought up, we are proposing that there will be some exceptions from the rent reductions. We have set out some of those in the Bill and we will be setting out further exceptions in regulations. Our intention is to align exceptions with the equivalent provisions of the rent standard. At present these include specialised supported accommodation, residential care homes and nursing homes, and intermediate rent and private finance initiative housing.
We will work with the sector to ensure that the most vulnerable people are not adversely affected—indeed, I am planning to meet with St Mungo’s.