Last month’s budget revealed the Treasury’s intention to cut a further £10 billion from the welfare budget. The first reaction in the Shelter office was – how? Housing benefit has already been cut by over £2 billion in the Emergency Budget, in a high risk move that has prompted concerns of rising homelessness. But now the Prime Minister has indicated the Government is prepared to take a wholly more radical approach to welfare cuts.
Downing Street has floated the idea of banning all under 25s from claiming housing benefit. Presumably this would not apply to younger parents, although headline grabbing proposals don’t tend to have the details bottomed out. According to news reports, the Prime Minister wants younger people to return home if they are out of work, like many people working in entry level jobs.
But a policy already exists to discourage young people from moving out funded by housing benefit – it’s called the Shared Accommodation Rate. This restricts single, childless claimants under 35 (raised from 25 in January) to enough housing benefit to rent a room in a shared house. This was introduced in 1996 in part to explicitly discourage people from leaving home, and in this respect it worked really well: after its introduction the number of people under 25 and claiming housing benefit dropped dramatically.
The SAR has been hugely controversial since its introduction, partly because of the moral assumption it makes about younger people, and partly for the huge practical problems it creates. The Government ignored these concerns and recently increased the number of people subject to the SAR – now they seem prepared to go a step further.
Shelter doesn’t want younger people to move out until they are financially ready. But the Government has to be realistic and accept that staying at home is not an option for everyone. Last year nearly 10,000 households in priority need were recognised as homeless after they were thrown out by their parents. Many more won’t have shown up in the statistics and will have resorted to sofa surfing, hostels or at worst the streets. If a family home is overcrowded it’s not uncommon for older children to be told to leave. Others will have gone through the care system, irretrievably lost contact with their parents or been orphaned. Parents may have downsized or divorced, making it difficult to return.
This also contradicts many of the Government’s own policies. The under-occupancy cut coming into effect next April is designed to encourage parents with a spare bedroom to downsize – now they are being told they need to keep it waiting in case their child loses their job. Increased penalties on parents who have an adult child living at home will also have the perverse consequence of encouraging families to break-up.
There are currently fewer than 163,000 single young adults without children who rely on housing benefit to keep a roof over their head. Of private tenants, six in ten will be on benefits for less than six months while they are unemployed and look for work. They receive the lowest level of support available – the average SAR award is roughly £60 per week – but claim housing benefit as a short-term safety net because it is often the only way they can keep a roof over their heads when work or family aren’t available.
In many cases, if young people are forced to return to their family home it will be in an area where work is not readily available. This proposal risks stopping people job-seeking in areas where there is employment to instead remain on benefits long-term in areas where there is not.
The Prime Minister’s proposal will be seen by many as a young people’s issue, but it represents a fundamental shift in the Government’s attempt to roll back the welfare state. The essential safety net has already become more threadbare following changes to Support for Mortgage Interest and housing benefit – what further cuts are in the pipeline? David Cameron has said he is prepared to ‘rub people up the wrong way’ over cuts, but is he prepared for a fundamental debate about what people morally and practically expect from the welfare state?