A very dry and cold Guardian article on an issue which will destroy lives, believe me, so ultimately the poor and disabled will end up in 'ghettto areas'. Why do not activists and the left take up these issues, in Spain, there have been general strikes for no less.

Big shake-up for housing benefit

Pilot scheme will link rent payments to family size

Patrick Wintour, chief political correspondent
Wednesday October 16, 2002
The Guardian

Andrew Smith, the work and pensions secretary, is poised to announce a shakeup of the welfare state tomorrow when he unveils plans for a new form of housing benefit no longer directly linked to rent levels.
Reform of housing benefit, costing the government £12bn a year, has confounded Labour ministers since they came to power. Any proposed reform has either proved too expensive or too punitive.

Mr Smith will unveil a pilot scheme across the country in which a housing allowance will be paid according to family size and broad local rent levels. At present, benefit levels are linked directly to rent levels, with 100% of the rent covered by the benefit.

Ministers also hope the reform, eventually covering 4m people, will cut out some of the bureaucratic layers including the need to refer rent levels to local rent officers. Delay in settling benefit is seen as one of the biggest remaining barriers to encouraging the unemployed to take work.

The pilot schemes will be trialled exclusively among private sector landlords.

Ministers had deferred major changes until after a 10-year project to reform rents for social housing tenants.

The government has now accepted the case for major reform in the private sector, where 815,000 currently claim housing benefit - a figure that has fallen from more than 1 million in 1997. The aim is to iron out any flaws before making the scheme national.

Ministers hope the scheme will not lead to any losers, but hope the simplification of the complex system will make the benefit more understandable. Welfare campaigners fear that some tenants will lose benefit if they do not trade down into smaller houses.

The reform is separate from plans to dock housing benefit from anti-social tenants.

Mr Smith told the Labour conference he wanted to reform housing benefit to "increase tenant responsibility and extend choice", ending a system which too often meant "endless form-filling, delays in payment, waste, fraud and landlord abuse", while putting people off going back to work.

The payments would no longer be directly related to the rent paid. The idea, long championed by the former welfare minister Frank Field, would be to provide incentives for people to shop around for affordable and suitable accommodation, so reducing the upward pressure on rents that guaranteed housing benefit levels can produce.

The rent would also be paid direct by tenants to landlords, reducing the risk of fraud.

Ministers believe the reduction in variations in rent levels across the country and within regions makes it easier to introduce the reform.

The audit commission recently published a critical report on the benefit attacking the long delays in payments and a scheme tarnished by error waste and fraud.

Malcolm Wicks, the junior housing benefit minister, has admitted that there have been a lot of false dawns, but has said the government is now determined to act.

Welfare campaigners fear the reform will lead to benefit cuts for millions of tenants. The government has conducted two major reviews of housing benefit but dropped radical changes fearing the disruption to a system that is already subject to needless changes.

Housing benefit and council tax benefit are delivered by local authorities. The need to take into account the income and capital of each claimant and his or her family, the exact household structure and particular housing costs and local taxes, renders the operation of the system very difficult to undertake.

Some council housing benefit departments have virtually collapsed, including some in which the private sector has been asked to take over payments.