Housing benefit reforms on hold

29 Nov 01
No attempt will be made to reform housing benefit until clear progress is made on rent restructuring, registered social landlords have been told.

30 November 2001

To the dismay of RSL chief executives, housing and planning minister Lord Falconer admitted at the Housing Corporation's annual conference that the only thing he could promise in the short term was to try to improve administration.

'There are no immediate plans for the root-and-branch reform of housing benefit, but the more there is a coherent market for rents, the more that root and branch reform will become easier,' said the minister.

One chief executive suggested the government had placed housing benefit reform in the 'too-hard-to-do box'.

Others said they were disappointed that the government had not committed itself to long-term reform.

Rents are due to be restructured over ten years from next April.

Speaking later during a briefing with journalists, Falconer declined to speculate at what point the government might decide enough progress had been made to tackle housing benefit.

Earlier, he promised that during the next ten years rents would go up by less than they have in the past decade.

Claiming that 'much misinformation' has been put out about large rises, particularly in London, he predicted that average rent increases will slow down as they are aligned with local earnings and property prices.

'This is true even for local authority tenants who face slightly larger increases than RSL tenants,' he told delegates in Manchester on November 21.

'The average rent increase for local authorities over the past ten years has been 3.1% in real terms, whereas for the next ten years it will be under half that – 1.5%.'

Speaking days after housing groups submitted a bid for billions of extra pounds under the next Spending Review, Falconer said he could not make any commitments about resources. The government would consider in detail the groups' proposal for a housing market renewal fund to stimulate areas where there is low demand.

Matthew Taylor, director of the Institute for Public Policy Research, had told delegates the previous day that housing was ahead of other public services in arguing that it needed money to help meet wider objectives, including better health and education.

Previously, the sector had focused too much on moral arguments, such as the need to reduce homelessness, he said.


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