Councils tighten housing allocations as cuts hit

As councils tighten eligibility criteria for housing and benefit cuts hit, charities warn of an increase in homelessness

With 5 million people in limbo on England’s council housing waiting lists, more local authorities are seizing new powers to rewrite the rulebook on allocating homes.

Councils want to streamline waiting lists and increase social mobility. While obliged to house those in priority need – the points-based system prioritises homeless or vulnerable housing applicants – many are exploring awarding additional points to those with jobs.

The London Tory flagship borough of Westminster is among the first in the country to overhaul how people progress up its 11,000-strong waiting list.

Both the previous and current governments granted councils more flexibility over allocations; a handful including, in recent months, Manchester, Wandsworth in London and Newcastle upon Tyne already favour or are considering favouring applicants who work. However, Westminster has decided not only to give additional priority for those with jobs, but for those who have lived in the borough for at least 10 years.

The move appeases those who fear local homes are no longer for local people, but concerns are being raised about the longer-term ramifications of such policies. The Refugee Council warned last year of putting nationality before need in a general response to new freedoms on allocation. Now, as more councils change allocation policies, there are fresh concerns about people being forced into the unaffordable private rented sector or pushed out into cheaper suburbs.

The creeping changes are a worry, warns housing charity Shelter. London campaigns manager Rachael Orr says: “We are concerned about a general trend across London of boroughs that are changing or considering changing their allocations policy to move away from prioritising those in greatest housing need.”

Westminster is, of course, under enormous housing pressure. It estimates that even if it closed its list now and let homes at the current rate, it would still take years to accommodate everyone. Those after the smallest studio flat would still wait over three years for rehousing, those requiring a one-bedroom flat would wait almost two-and-a-half years, while the wait for two-bedroom flats would be six years and eight months.

Like all boroughs, Westminster awards points based on need. A learning disabled applicant nominated by social services for a one-bedroom flat, for example, gets 400 points. Under the new rules, outlined in a report in April and now in operation, such priority needs remain but any new applicants in work get 50 extra points and those who have lived in the borough for 10 consecutive years get another 50 points. In addition, applicants are classed as “low priority” if they have lived locally for less than three years. The previous threshold was two years.

A council report states: “Although the legal requirement to give reasonable preference to certain groups such as the overcrowded and the homeless remain, the greater flexibility to reflect local priorities means that additional priority can be given to those with a stronger residence connection.” Extra residency points will see recipients “being housed more quickly than an applicant with less than 10 years residence”.

The central London borough believes its changes are “fairer to local people”. Jonathan Glanz, cabinet member for housing and property, says: “Many local authorities throughout the country are under similar pressures; we feel them most keenly here as we have such [housing] demand.”

However, the changes could adversely affect those who are “on the lower margins, just ticking by”, says local Labour MP Karen Buck, shadow work and pensions secretary. This is especially the case when combined with the government’s housing benefit reforms.

From January 2012, single people aged 25-34 will only be able to claim housing benefit based on the cost of a room in a shared house rather than a one-bed flat. Since April, housing benefit is now capped for all new claimants – at £250 for a one-bed property and £400 for four bedrooms – making most decent private rented flats and houses in inner London unaffordable. And from October local housing allowance rates – which are used to calculate how much housing benefit claimants are entitled to – will be set using the bottom 30% of rents, not the average rent for an area.

“The lowest-income households, which rely on the private rented sector will be pushed into the poorer end of the sector,” warns Buck. Councils already struggle to keep tabs on unscrupulous landlords and shoddy properties, she says.

Shelter fears that allocation changes will tip vulnerable people into insecure and expensive private rented accommodation. Orr says: “The next couple of years are going to be really difficult for a lot of Londoners on low incomes.” Glanz responds: “We are very alert to those concerns and not about to put people into inappropriate accommodation.”

Another fallout from reworked allocation policies is that housing problems are simply displaced. There are already concerns about displacement caused by cuts; a report in February from the Department for Work and Pensions predicted an exodus of claimants from expensive areas into cheaper areas. In Westminster, a recent report to the finance and resources overview and scrutiny committee states that nearly 5,000 households will be moved outside the borough as housing benefit cuts make their accommodation unaffordable.

Buck warns that other boroughs might pull up the drawbridge on social housing by also boosting the importance of local connections. Since councils must still house the homeless, people who suspect they will otherwise fail to win extra points may be tempted to make themselves homeless, although councils are not obliged to house anyone deemed to have made themselves homeless. As Buck adds: “The more you tighten the access rules, the more you push people into homelessness.”

Shelter also fears benefit changes risk a rise in homelessness. A report last month by charity Broadway Homelessness and Support and the Greater London Authority already found an 8% rise in rough sleepers in 2010/11, with 4,000 people estimated to be sleeping on London’s streets.

Some boroughs are prepared for a rise in homelessness. Last month in Lambeth a new tenancy rescue service was launched by the Labour-run council and homelessness charity Broadway. It is to support and advise under-35s who may be renting a one-bed flat and are at risk of becoming homeless as a result of only being allowed to claim housing benefit based on the cost of a room in a shared house.

The Lambeth scheme is not a direct response to allocation policy changes, but the council is wary of their impact. Jim Dickson, councillor for health and wellbeing, warns of unforeseen consequences “that will hit in terms of [needing to spend on] extra homeless resources”.

In isolation, overhauling waiting list policies simply follows the government’s agenda on social mobility, offering a pragmatic response to housing pressures. But in the context of benefit reform and cuts, they could have a devastating impact unless housing supply and private sector standards and affordability are tackled. As the housing safety net is slowly being redrawn, the fear is that it is no longer wide enough to catch everyone who falls.