An interesting question

Ten years ago there were almost no rough sleepers in Camden. So what’s gone wrong? The Labour-run council says it’s clear that cuts are to blame. Councillor Nadia Shah said: “Rough sleeping in Camden is now at unprecedented levels. This is an appalling situation made worse by the politics of austerity that have led to cuts in services across the country.”

Nationally, welfare reform and cuts to benefits have increased financial insecurity, while soaring rents and reductions in the permitted housing benefit payments have left many people with an impossible gap between rent owing and income. On top of this, changes to the way housing benefit is paid have increasingly meant money no longer goes straight to the landlord but to the tenant, which has led to a sharp rise in arrears and evictions.

That change in how HB is paid. When did this happen? Who argued for the change? And why?

It wouldn’t surprise to find that it was the usual SJW types arguing that people should have agency. Not a bad idea in itself, but what actually was the argument and by whom?

35 comments on “An interesting question

  1. Things that are designed to make things better actually don’t. Early days yet but measures designed to ensure the evil private landlord doesn’t make any profit will have the effect of taking rental property off the market. Might as well leave the place empty as endure the terms and conditions which are coming in.

  2. If a tenant has rent arrears, their landlord can ask for the rent payments to be temporarily paid directly to them. So I doubt that paying HB direct to the tenant has led to an increase in rough sleeping.

    One thing that has increased rough sleeping is the PC attitude that rough sleeping is somehow an acceptable lifestyle choice. Where I live, there’s a woman camping in the doorway of a prominent Grade I listed building in the town centre. She’s been there for months; but the police and the relevant ‘agencies’ (if do-nothing bleeding hearts can have any agency) say nothing can be done to move her on because she has refused all offers of accommodation and help. Yet her growing pile of carrier bags, cardboard boxes, filthy bedding and litter is a public nuisance and likely to attract vermin. Meanwhile, earnest-looking, middle-aged, left-leaning women bring the vagrant hot drinks and cash….

  3. Sounds like a local problem to me. Not so many homeless in the Outer Hebrides, after all. So what’s Councillor Nadia Shah of the Labour-run council doing about it, other than demanding more money from the national government?

  4. I think there were changes under the LHA in 2008.

    Stupid policy. Stupid, stupid, stupid.

    Instead of paying landlords direct, the tenant would be paid. Because why? No idea? Because 100% of the rent would always inevitably end up in the hands of the landlord? Fat chance. But if that was the aim, why not pay direct to the landlord.

    The completely and utterly inevitable result is a reluctance of private landlords to let to people out of work.

    Stupid, stupid, stupid, stupid.

  5. Was there not a stat released the other week that half the UK’s rough sleepers are from EE?

    Send them back and there is a 50% reduction in the problem right away.

  6. I was on the board of a Housing Association between 2003 and 2006 and this was discussed at the time, with everyone being aware that this was likely to cause the problems we have seen. But the argument was and is, like food vouchers, that we must respect and give dignity to the recipient. Choices and implications!

  7. “their landlord can ask for the rent payments to be temporarily paid directly to them”: how much time and hassle is required? How quickly and certainly does the payment arrive?

  8. > Who argued for the change?

    The evil Blairites did this. Jezza Corbin’s mob will clean up the homeless problem in no time, by building council towers (with sprinklers this time!) all over Hampstead Heath.

    More seriously though, what Theo says. As crime falls and society gets richer, it becomes ever-easier to live as a vagrant, collecting breadcrumbs from the tables of the rich. There are few homeless in the Outer Hebrides because there are no crumbs dropping off rich tables.

  9. As I said above, I doubt that paying HB direct to the tenant has led to an increase in rough sleeping – which isn’t to defend the policy but to make a point about causation.

    It’s a long, long way from incurring rent arrears to rough sleeping. If anyone is made homeless because of rent arrears, there are plenty of options available – eg local authority B&B and hostels. No-one needs to sleep rough. Those who do but are ignorant of the available alternatives are usually referred to some ‘agency’. Those remaining have refused all offers of assistance. They do so because they have mental health ‘issues’ and/or addictions to drugs and alcohol, and they know that their drugs and booze (and behaviour) will not be permitted in a hostel….

  10. LL can have direct payments if the tenant can’t manage their own finances ( disability evidence needed ) has a previous history of non-payment or is 8+ weeks in arrears.
    This assumes the LL wants to keep the tenant.
    It’s easier to evict than it once was, squatting is now a criminal offence, we don’t deport failed asylum claimants and we’re tolerant of the rough sleepers too – all have to be factors, but by how much.
    I notice that people doing the rough sleeper count don’t ask them questions about their circumstances. It’s just a count afaik. What good is that as a data collection exercise.

  11. Josephine said:
    “Welfare Reform Act 2007”

    From my hazy memory it was the Blair government that introduced payment of housing benefit (which fits with the Act you cite), but only for tenants of private landlords. The extension to housing association landlords I thought was an IDS reform, to prepare for Universal Credit.

    So it’s a cross-party effort.

  12. I think the purpose was to teach recipients to value the benefit closer to it’s money value. Could be and interesting cause of homelessness. Failure to value a home at its actual worth, because crack or whatever is more important…

  13. But the argument was and is, like food vouchers, that we must respect and give dignity to the recipient.

    Funny, though, how the same logic is never applied to education and healthcare.

  14. “It wouldn’t surprise to find that it was the usual SJW types arguing that people should have agency.”

    I think the argument is that if you’re going to offer people welfare to enable them to have certain goods, it’s best to give them money to buy the goods themselves, or whatever else they want even more (maximising their own utility), than to buy the goods for them.

    Here’s someone else I know on the subject, talking about the wisdom of the government giving people food stamps, rather than giving them the money to buy their own food.

    Sheesh, this violates the most basic stricture, always, but always, subsidise people, not things. What is more valuable to you, £10 to buy lunch with or a lunch provided to you that cost £10? £10, obviously. Because you can spend £5 on lunch and £5 on dinner, or beer, or soap.

    These people are so fucking stupid they’ve just not grasped why food stamps sell at a discount to real cash money. Idiots, morons.

    If people have expenses they consider even more important than paying the rent, what maximises their utility/minimises their suffering? To spend the same amount of money on the thing they actually want, or the thing *you* think they ought to have?

  15. [Messed up the quote, I’ll try again…]

    “It wouldn’t surprise to find that it was the usual SJW types arguing that people should have agency.”

    I think the argument is that if you’re going to offer people welfare to enable them to have certain goods, it’s best to give them money to buy the goods themselves, or whatever else they want even more (maximising their own utility), than to buy the goods for them.

    Here’s someone else I know on the subject, talking about the wisdom of the government giving people food stamps, rather than giving them the money to buy their own food.

    Sheesh, this violates the most basic stricture, always, but always, subsidise people, not things. What is more valuable to you, £10 to buy lunch with or a lunch provided to you that cost £10? £10, obviously. Because you can spend £5 on lunch and £5 on dinner, or beer, or soap.

    These people are so fucking stupid they’ve just not grasped why food stamps sell at a discount to real cash money. Idiots, morons.

    If people have expenses they consider even more important than paying the rent, what maximises their utility/minimises their suffering? To spend the same amount of money on the thing they actually want, or the thing *you* think they ought to have?

  16. As a Landlord who used to accept tenants whose rent came from a charity or state I can say that one good reason to give the money directly to a tenant is me.

    I won’t take a charity/state funded tenant at all, ever, under any circumstances. They have destroyed/damaged too many of my units. They have a habit of packing 20 noisy, drunken or drug addled bums into a small suite on a cold night. They drive out the good tenants.

    A bum with cash can clean himself up enough to trick me for a while. A bum with a third party voucher cannot.

  17. @ NiV
    You have a good point *but* Housing Benefit is like food stamps in that it is intended (the donors think that it can only be spent on) to pay for one specific benefit. To pay it to the claimant instead of the landlord sounded good but introduced moral hazard and resulted not only in more evictions but also the decision of many landlords to refuse to take any more DWP cases.
    So the small minority who chose to spend the money on drugs rather than the rent have made things worse for the large majority of non-druggy benefit claimants who find it more difficult to find a flat as a result.
    Where is it different from food stamps? Well, because shopkeepers don’t have to sell food to people who don’t pay them but landlords cannot throw people out if they are one day late in paying the rent so they are stuffed if their DWP tenant spends their HB on drugs. How do they know in advance which ones will do so? They cannot so many choose to avoid *all* DWP tenants.

  18. @ RichardT
    Universal Credit is a single payment to replace a multiplicity of different payments with differing regulations – it would mess it up if one suddenly switched back to paying HB to the landlord but everything else to the claimant. I am confident that #1 son could, if asked, write a programme to sort this out but I have zilch confidence that the DWP programmers can do so.

  19. “What is more valuable to you, £10 to buy lunch with or a lunch provided to you that cost £10? £10, obviously. Because you can spend £5 on lunch and £5 on dinner, or beer, or soap”

    That doesn’t work with housing benefit, because the benefit is the amount of rent you are paying (subject to a local maximum). Therefore you cannot do what Tim suggests there, save (legitimately) on rent and use the money for something else; if you find somewhere £5 cheaper to rent, your housing benefit goes down by £5.

    I’ve argued for years that housing benefit ought to be abolished, and instead pay a flat-rate amount to everyone who qualifies, then claimants can, as Tim suggests, choose what to spend their money on, like everyone else.

    A few people are incapable of handling this, but they’re incapable of handling pretty much anything about modern life; we need something else for them. But that doesn’t mean that we can’t have a more rational system for most.

  20. john77 said:
    “Universal Credit is a single payment to replace a multiplicity of different payments with differing regulations”

    In principle, yes, it was supposed to be. But I gather it’s actually ended up as the same multiplicity of different payments with differing regulations, but now they’re claimed and paid together. That’s why it’s such a sodding disaster.

    If we just had a single, means-tested benefit that didn’t depend on where you live or what rent you pay (and, ideally, your personal circumstances), it would be much easier and we wouldn’t get the horrendous delays that are sending people to food banks.

  21. @ RichardT
    I totally disgree with your last paragraph. I have paid pay no rent since I was in my late wenties so should I have got a gift from the state to cover my non-existent rent when I was made redundant (due to a moronic state regulation)?
    Re your paragraph 2 – the aim was that marginal tax rates should be less than 100% as they were under Gordon Brown (which is why he blocked it when Tony Blair was PM). It’s not a sodding disaster as it’s a lot less bad than its predecessorbut it’s not as good as it should be because George Osborne was too mean

  22. “if you find somewhere £5 cheaper to rent, your housing benefit goes down by £5”
    The balance of probability is that that doesn’t happen now.
    e.g. LHA £800/month, old rent £900/month. Find somewhere new that is £850/month then you are £50/month better off.

  23. Bongo, that’s true, but that’s a result of LHA (i.e. setting a local cap on housing benefit), it’s nothing to do with paying the benefit direct to the tenant.

  24. john77, from what I’ve heard from people involved, it’s an administrative disaster (even though I agree in principle it’s an improvement). But the reason it’s an administrative disaster seems to be that it’s not really designed as a single benefit but as various different benefits all lumped together.

    As for you having got enough money to pay rent when you were unemployed and not renting, that’s much less of a problem than the perverse incentives in the current system. Far more important to bring market forces to bear on people’s housing choices than to worry about the small number of people in your position.

  25. “but as various different benefits all lumped together.”

    Sounds like a lot of civil servants went into job protection mode.

    I see no problem in giving people money for rent directly, but if there are no consequences to their actions, then its a waste of time. I have to deal with benefit claiming scums who make life miserable for benefit claiming good people, who are vastly more numerous. Its a wonder the good ones don’t become scum more often seeing that the latter have everyone else paying for their behaviour and they suffer no consequences.

  26. @ RichardT
    Yeah, my wife tells me that is an administrative disaster but whose fault is that?
    Nobody (except me) points out that the DWP incompetence is – by far- the largest cause of demand for Food Banks when discussing Universal Credit managed by – guess who? DWP
    #2 son is diagnosed “Autistic” so has difficulty obtaining employment but tries very hard – we found that one of his jobs (helping disabled students in west London) cost more in fares han he got paid! It took over 18 months for DWP to process his ESA claim because they kept “losing it” even when he, or I (when I wanted proof) posted it by “Recorded Delivery”.

  27. Why?

    Because withholding, threatening to withhold rent may get LL to attend to what you say LL should deal with. And not being able to doesn’t.

  28. @ RichardT
    The perverse incentives in the current system are the principal argument for moving to Universal Credit.
    Thousands of guys have taken up jobs now that it no longer costs their familis £££ due to Gordon Brown setting up benefit systems with marginal tax rates far in excess of 100%. Lord Freud designed a system wih marginal tax rates less than 100% for Tony Blair but Brown blocked it so Freud offerred it to IDS who jumped at it (regrettably George Osborne upped the tax rate above that for the rich). If the marginal tax rate was reduced to 50% thetake-up would be even higher

  29. @RichardT, January 26, 2018 at 3:18 pm

    “That doesn’t work with housing benefit, because the benefit is the amount of rent you are paying (subject to a local maximum). Therefore you cannot do what Tim suggests there, save (legitimately) on rent and use the money for something else; if you find somewhere £5 cheaper to rent, your housing benefit goes down by £5.

    I’ve argued for years that housing benefit ought to be abolished, and instead pay a flat-rate amount to everyone who qualifies, then claimants can, as Tim suggests, choose what to spend their money on, like everyone else.”

    +1 You saved me typing same.

  30. As a landlord I insist that HB is paid to the tenant. The tenant is the claimant, not me. I have a contract with the tenant, not with the benefits service.

    If the benefits service wish to enter into a contract and rent my property, fine, go ahead, then I can sue THEM when they don’t pay me.

  31. FredZ,

    That’s also why HAs quietly buy properties in nice areas and stick their problem tenants in there. It takes effort to find out who the landlord is and complain, in a way it doesn’t when they are in a HA development.

  32. The truth is in there:

    “The picture in Camden is complicated by the arrival of a large number of eastern European migrants”.

    Immigration causes problems.

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