and welfare reform Christina Beatty and Ian Cole Centre for Regional Economic and Social Research Sheffield Hallam University

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1 The spatial Impacts aspects of Welfare of housing Reform and welfare reform Christina Beatty and Ian Cole Centre for Regional Economic and Social Research Sheffield Hallam University

2 The future test for placemaking: picking up the pieces after welfare reform? Welfare reform - at heart of Coalition's programme Much discussion has been segmented by i) the type of measures and ii) the demographic group(s) affected An overt spatial frame of reference also required to examine impacts Need for more integrated analysis of integrated effects of different strands of welfare reform Illustrate localised difference through interim analysis of one specific measure: reform to Local Housing Allowances (Housing Benefit) in the private rented sector

3 Hitting the Poorest Places Hardest: The local and regional impacts of welfare reform Highlights the uneven geography of the impacts Provides evidence on the impact of reforms across GB as a whole for individual reforms by full implementation in 2014/15 (in the main) Provides data for every local authority Document the impacts, not comment on merits Co-financed by the Financial Times (via Pulitzer Centre on Crisis Reporting in Washington), Scottish Parliament and Sheffield Hallam University Based on government impact assessments and official data

4 Overall impact GB Loss ( m pa) Per working age adult ( pa) Incapacity benefits 4, Tax Credits 3, per cent uprating 3, Child Benefit 2, Housing Benefit: LHA 1, Disability Living Allowance 1, Housing Benefit: bedroom tax Non-dependant deductions Council Tax Benefit Household benefit cap TOTAL 18, Source: Sheffield Hallam estimates based on official data

5 Overall impact across GB regions Overall loss Per working age adult m p.a. p.a. North West 2, North East Wales 1, London 2, Yorkshire & the Humber 1, West Midlands 1, Scotland 1, East Midlands 1, South West 1, East of England 1, South East 2, GB 18, Source: Sheffield Hallam estimates based on official data

6 Impact of welfare reform Greater London per working age adult p.a to to to 350 Source: Sheffield Hallam estimates based on official data

7 Relationship between impact of welfare reform and deprivation, by local authority

8 Housing Benefit: Under-occupation ( bedroom tax ) Greater London per working age adult p.a to to 15 0 to 10 Source: Sheffield Hallam estimates based on official data

9 Housing Benefit: Local Housing Allowance Greater London per working age adult p.a to to 40 0 to 25 Source: Sheffield Hallam estimates based on official data

10 Council Tax Benefit Greater London per working age adult p.a to 20 0 to 10 0 Source: Sheffield Hallam estimates based on official data

11 Household benefit cap Greater London per working age adult p.a to 20 5 to 10 0 to 5 Source: Sheffield Hallam estimates based on official data

12 Child Benefit Greater London per working age adult p.a to to 75 0 to 65 Source: Sheffield Hallam estimates based on official data

13 Not for quotation LHA - The Policy Background Local Housing Allowances - Housing Benefit paid to private sector tenants Of increasing importance: thirty year shift from supply side to demand side subsidy in housing/social security policy (80:20 to 10:90) 41 per cent of total HB expenditure in GB is paid to PRS tenants Quickly selected as a focus for reform by Coalition govt. LHA rates reduced from April 2011 onwards Rates paid according to property size (from Shared Accommodation Rate (SAR) to 1, 2 3 and 4 bedroomed rates) SAR extended from single people under 25 to single people under 35 years old

14 Not for quotation The Impetus for the LHA changes Discourse of fairness : most working families cannot afford to live in central London so why should HB recipients? Reflects primacy of the responsibilisation agenda, reinforcing market rationality and potential displacement of the poor Claimants in work are the fastest growing sub-group of HB recipients 60 per cent increase between January 2010 and May 2013 Now one in three LHA households has an adult member in work (one in four just two years earlier) Pre-reform debate dominated by high demand London impacts and fears of 'Kosovo-style social cleansing' (Boris Johnson), as poor are displaced But only one side of the coin... No national narrative possible of impact: spatial consequences vary markedly

15 Reductions in average weekly LHA rates by local authority area: some examples Reduction between Q and Q Westminster Brent Blackburn Barking and Dagenham Fenland Portsmouth Not for quotation (based on three month averages: reforms were phased in from the beginning of Q2 2011)

16 Not for quotation Impacts in high demand markets Reduction in on-flows of LHA claimants by 31% in London Centre and 20% in Cosmopolitan London in this period during first year postreform But little change in off-flows in this period Claimants clinging onto their foothold, and exhausting all other possibilities to 'make do' Very strong attachment to neighbourhood, esp families with children, due to proximity to schools, support networks and services etc Exodus may be happening, but in stages: displacement through attrition? Some LAs (eg Hackney) using special payments (DHPs) to try and retain LHA tenants and maintain social mix Challenge for placemaking strategies - keeping a toe hold for affordable housing

17 Not for quotation Impacts in low demand markets Rents often reduced in line with lower LHA rates Fewer alternative sources of demand for landlords: not many exiting the market because of sluggish resales Landlords with mortgages under most pressure - repossessions increasing in some areas Changes in LHA for single people under 35s had most impactunclear where they have moved on to Growth in termination of tenancies (but not evictions), homelessness, overcrowding and use of hostel accommodation Some spatial concentration of LHA households: poorer standards of management and maintenance reported Growth of 'informal' market - conversion of 3 beds to single units, but lack of response re increasing HMO supply Challenge for placemaking - regulating PRS without reducing housing options for the poor still further

18 Not for quotation Final reflections Focus on new investment and new measures can overshadow concern with spatial legacies of current/previous policies Housing policies have become increasingly dislocated from space: province of DWP not CLG...apart from an unhealthy fixation with the 'first time buyer' London-centric emphasis in lobbying activity on policy impacts - what about second order cities and peripheral areas? London-centric in academic debate too? eg the gentrification mark 2 discourse Bridging 'North-South divide' still largely framed in terms of economic development and a few fancy trains 'Informal' and low value housing sub-markets will require urgent policy attention Unless one concedes that places can just be written off - by default, if not by design