Some of the most difficult casework that I deal with as an MP concerns people who have been accepted as homeless by Croydon Council and placed in temporary accommodation (often Bed & Breakfast accommodation). The number of people in this situation has been increasing in recent months - as has the length of time they are spending in such accommodation - and increasing faster in Croydon than in other parts of the country. As of early December, 180 families had been in Bed & Breakfast accommodation for more than the legal limit of six weeks. And the quality of some of this accommodation leaves a lot to be desired.
Why has this happened?
It is not a reflection on my colleagues at the Town Hall. Croydon was the first council in London to achieve the previous Government’s target of halving use of temporary accommodation by 2010. At the end of March 2009, there were fewer than 50 families in bed and breakfast accommodation and none had been there for more than the six-week limit. And it is currently doing everything it can including trying to help families avoid becoming homeless in the first place, identifying surplus Council buildings that can be converted into accommodation and increasing the frequency of inspection of emergency accommodation.
There appear to be five factors at work.
First, the number of people accepted as homeless has doubled as a result of the economic climate.
Second, the supply of private rented accommodation that councils across the country can access has dried up as a result of the difficulty people are having getting a mortgage - in essence, people who would in normal conditions buy their own home are unable to do so and are therefore renting. With this extra demand in the market, landlords don't need to rent out their properties to council nominees.
Third, rent levels in Croydon are low relative to many other parts of London, so other councils compete with Croydon Council for private rented accommodation in the borough.
The combined effect of the second and third factors is that whereas in 2008/9 the Council was able to allocate 393 homes in the private sector, between April and early December 2012 it was only been able to allocate 11.
Fourth, Croydon has surprisingly little social housing (Council and housing association properties) given its socio-economic profile, reflecting the fact that it used to be a fairly affluent outer London borough as well as the failure of the previous Labour Council to build any new Council homes (the current administration is doing so, but it’s going to take time to increase the supply to the level we need). This means it has less capacity than other councils to cope with the lack of supply in the private sector.
And finally, some of the Government’s welfare reforms - whilst the right thing to do in principle - have had an effect. For example, the decision that tenants should be given their Housing Benefit and be responsible for paying their rent (instead of the Council paying landlords direct) - taken with the laudable aim of encouraging tenants to take responsibility for running their finances - has however discouraged some landlords from taking people in receipt of Housing Benefit.
In this context, the Government’s decision to roll out the benefit cap (a key reform which will ensure that no out of work family receives more in benefits than the average family earns after tax) to Croydon and three other London boroughs before it goes nationwide is a cause for concern. The benefit cap is one of the Government’s most popular policies - it is clearly wrong that some families have been receiving huge sums in benefits - but there is a danger that if it applies to Croydon before it applies to some neighbouring boroughs, it will exacerbate Croydon’s problems in securing private sector accommodation.
I therefore arranged for Council Leader Mike Fisher, Deputy Leader and Cabinet Member for Housing Dudley Mead and Chief Executive Jon Rouse to meet with Housing Minister Mark Prisk and Welfare Reform Minister Lord Freud last night. It was an extremely positive meeting - Ministers were clear that the Government needed to help Croydon through this process and instructed their civil servants to liaise with the Council to identify what was required.
As I said, the principle that people on benefits shouldn’t receive more than the average family earns after tax is a crucial one but the Government needs to get the implementation right and help the Council deal with the housing crisis we face.