The emergency budget
It’s a little surprising that this has yet to be commented on, I’m posting here as it’s more than a benefits issue.
I’m trying to update our forecasting model with all the changes staged over the next couple of years as announced but it will take a few days. If anybody would like a copy of the notes when done, let me know.
I’m less surprised that the press haven’t noticed that the personal allowance change which is worth £170 a year to basic rate taxpayers will be worth £25.50 net to those on means-tested HB & CTB.
So much for dynamic benefits.
I don’t think this is a suitable forum for me to comment on the budget because a lot of my remarks would have to be moderated out of existence.
However, does anybody know where I can find out the addresses of George Osbourne’s three houses? This is only so, when my unemployed clients have their housing benefit cut by 10 per cent for being unemployed too long, I can direct them where to squat when they get evicted.
AIPs to go?
I see Lord Freud said yesterday, “Payments are being misdirected through .... lax requirements for people to inform officials when their income went up”.
He also said that the £5.2bn figure for faud and error was “what we know about” implying the figure could be much higher.
My biggest concern is the plan to remove referencing to actual housing costs for the LHA. From 2013 the LHA will rise based on the CPI rather than any references being made to what the actual housing costs in the area are. Apart from the fact that raising the LHA, which is a very localised figure, based on such a broad national average is unfair and illogical, the CPI specifically excludes housing costs in it’s calculations! Combine this with the 30th percentile change and massive increases in non-dependant deductions there will be significent cuts for all private HB claimants in the next few years.
<snip>From 2013 the LHA will rise based on the CPI rather than any references being made to what the actual housing costs in the area are.
There is one possible logical reason for this. In some areas, rental costs have been distorted by LHA rather than the other way around. In some LA areas, LL’s have been deliberately pushing up rents to LHA levels when, historically, local rent costs have been significantly lower. I’m not suggesting this is occuring across the board, but it is definitely happening in some areas.
While I can accept that LL’s in some areas are able to manipulate the LHA, it is absolute madness to use an index which specifically excludes housing costs to calculate housing costs. The changes would have been bad enough using the RPI which includes housing costs since rental and housing costs do not rise evenly across the country but using the CPI is a clever way of cutting costs every year.
The TUC blog has an interesting graph on RPI/CPI http://www.touchstoneblog.org.uk/2010/06/rip-rpi-budget-changes-to-benefit-uprating/ . There is often a 2% difference between RPI and CPI effectively meaning a 2% cut almost every year in the LHA in real terms.
...criticism should be levied not at those who take advantage of the LHA, but of those who created it.
Which was the previous administration and is why LHA is being targetted.
Sorry Tony, my previous comment was misleading (would help if I read my posts before commenting). I don’t think there is some kind of daily mail type conspiracy of private landlords manipulating the LHA rates, I was accepting Kevin’s comment in the previous post about LHA’s potential to drive up rents. I also don’t see landlords increasing rents to LHA levels as particularly abusive especially when you consider the LHA rate is set at the median rent, so there are 50% more properties in the area with higher rents.
The irony is that the LHA is much less damaging to the rental market and competition than the new regime will be. At least with the LHA it was set according to actual rent levels, increases based on the CPI will place much greater restrictions on landlords abilities to raise rents (if they want HB claimants as tenants). The worry is that it will further cement the 2 tier system of private landlords; those who take HB claimants and those who do not.
My favourite quote of the week is from Frank Field:
“the unmarried father who is often young, unemployed and often unemployable and who is unskilled, and the way society has changed has made him redundant. The position he once held as breadwinner has been taken over by taxpayers. If they ever dare think about it, they are entering into an abyss of a life on benefit, trying to make ends meet with petty crime and drug dealing.”
That is one hell of a stereotype from the previous Director of CPAG.