Yesterday, the Institute for Fiscal Studies predicted that, following a deep recession and tepid recovery, the median household income in 2021-22 is likely to be 18% lower than that which might reasonably have been expected back in 2007–08. That’s more than £5,000 a year lost per household. Few of us will be where we thought we might be 10 years ago.
But some of us are likely to fare much worse. The poorest 15% are expected to, on average, have lower incomes in 5 years’ time from now if benefit cuts are implemented as planned. The current four-year benefits freeze will cut the value of most working-age benefits by 6%. Universal credit will be less generous than the benefits it replaces. And housing benefit is no longer designed to cover increases in rent for most recipients.
And who will fare worst of all? Low-income households with children. Absolute child poverty is projected to rise from 27.5% in 2014-15 to around 30% in 2021-22, returning roughly to its pre-recession 2007-08 levels. Let’s be clear about this. It means that in a class of 33 children, 10 girls and boys will be living in absolute poverty.
Absolute poverty can lead to homelessness. And we can’t allow child homelessness to increase any further. It’s already back to 2008 levels. On 31 December 2016, there were nearly 56,000 homeless families with children accommodated by councils in temporary accommodation, having increased by 65% since September 2011.
Homelessness has a devastating effect on children. No one who has been homeless as a child ever forgets it – and the feelings of insecurity, shame, and anxiety leave a lasting legacy, as last year’s Slum Britain documentary revealed. I recently met the father of the homeless family who featured in the documentary. Still in TA, he said that, although he technically has a roof over his head, he doesn’t feel part of society.
Homeless parents living in temporary accommodation tell us they no longer have control over their lives and can’t reassure their children that things will get better as they struggle to cope with their transitory existence:
“It’s the not knowing, not knowing where you are moving to and not knowing what to say to my children, knowing that we’re moving house, and where are we moving to? Just living out of suitcases and boxes and not being able to find clothes and searching for your bits.”
Ahead of next week’s budget, the Local Government Association (LGA) rightly states that “looking after our children is one of local government’s most important statutory duties”. It warns that the crisis in housing is just as serious the pressures on children’s and adults’ social care.
Last week’s Local Government Financial Settlement confirmed that there will be no additional funding for councils in 2017/18. Local authorities predict a £5.8 billion funding gap by 2019/20, with the cost pressures of homelessness particularly acute. The LGA reports that placing homeless families in expensive temporary accommodation has cost councils £3.5 billion in the past 5 years and that ‘homelessness services face a funding gap of £192 million by the end of the decade’. There is not just a burning injustice in the face of growing child homelessness – it will cost us all dearly.
These shocking predictions don’t have to come true. There is an alternative. The IFS reports the projected increase in absolute child poverty is ‘entirely explained by the direct impact of tax and benefit reforms – particularly the cuts to working-age benefits – planned for this parliament’. The LGA argues that reforms to reduce household incomes while rents continue to rise has led to landlords reducing housing options for low-income households. They are urging the Chancellor to reduce the risk of homelessness and the pressure on local authority spending on temporary accommodation, by lifting the freeze in Local Housing Allowance rates.
This was last week echoed by Lord Best, a housing expert, who is guiding the Homelessness Reduction Bill through the House of Lords:
“It seems quite likely that over the next couple of years, we could see a large proportion of the 800,000 or so households who are currently in the private rented sector and receiving housing help from the DWP being asked to leave. This will create a crisis indeed. I simply ask DWP Ministers to recognise that they cannot buck the market: if the least affluent are to be housed in the private rented sector—as they must be, because there is a woeful lack of available council and housing association accommodation—then the DWP must return to paying the same rent as the landlord can get from other tenants. The freeze on Local Housing Allowances must go.”
When the Prime Minister came into office, she vowed to fight against injustice for all of us ‘whoever we are and wherever we’re from’. The Government can use next week’s Budget to address the injustice of growing child homelessness by ending the freeze to LHA.