Lime Legal

The minister responds

Published 01 January 2024

Chris Pond says there will be no homelessness, people housing themselves in unsuitable accommodation or landlords pulling out of the market

At eight o’clock on a wet Monday morning in Blackpool housing benefit minister Chris Pond launched the biggest reform of housing benefit since the subsidy was invented 20 years ago. He said the pathfinder would be good for tenants and good for housing benefit administration. ‘This gives tenants choice and responsibility and many are better off in financial terms. There is more transparency so people know what they are going to get and it makes the decision to move into work easier.’

In the last few months the minister and his department have travelled up and down the country preaching the merits of the new housing allowance. Even though the rights and responsibilities argument has not been entirely successful, the former director of the Low Pay Unit is convinced that the new scheme will not cause homelessness, debt or migration from social housing to private renting.

The minister bats away suggestions that landlords will vote with their feet against direct payment and find working people to rent their homes. Many landlords have told ROOF they are afraid they will never see their rent. The minister says landlords will come round. ‘We have had discussions with landlords and their organisations over a considerable period. We understand their problems and we will want to monitor them to see if they are a reality.’

He adds: ‘Here at Blackpool we have talked to a landlord who welcomes the reform. Most landlords want responsible tenants.There are safeguards for vulnerable tenants. For rent in arrears there will be an automatic return to paying the landlord after eight weeks.’ This is actually an existing safeguard and not linked to the reforms.

It is not just direct payment that has caused a furore, but poverty and debt. Campaigners fear vulnerable tenants such as single mums or people with mental health problems will place themselves somewhere small, cheap and squalid to have leftover rent for food or children’s shoes. Pond is a little sketchy on how this can be prevented, referring to unspecified safeguards and the fact that councils will ‘not be happy to see that’. He adds: ‘All the evidence we have got is families with children choose to upgrade when they have the opportunity as the home determines the quality of the life. It is unlikely that people will decide to pocket a few extra pounds. But we will be looking carefully to see if this does happen. If it does we will have to think about it.’

Of course, the new system will only offer tenants the chance to pocket any savings in rents if landlords decide to keep their rents below the local allowance level. Surely market forces will push rents up to the allowance level so landlords will get maximum profit? Again Pond’s response is that the DWP will be monitoring carefully any rent rises that happen that way. In fact Pond says the new system could have the opposite effect. ‘We have chosen pathfinders in vigorous and competitive private rented sectors. The whole purpose is to give people choice. Tenants will make those decisions and it could put downward pressure on the rent market. We want to prevent distortions that encourage rents to go up. But we will be looking carefully for landlords that exploit it.’

The minister is already aware of the landlord in Blackpool who is soliciting council tenants to move out of their secure council accommodation in return for cash back on their rent. But he does not believe all landlords are poised to carry out such scams. He warns that the DWP will not tolerate landlords that try to exploit the situation. ‘We will watch the activities of landlords who try to make a fast buck. But on the whole private landlords want to be responsible.’

A concern of some housing advocates is that the DWP is investing so much time, effort and money into the pathfinders they will not be a real test. The pathfinders last two years and then the scheme will be rolled out across the country. Increased debt caused by direct payment is the main fear of housing campaigners. The DWP is funding money advice workers to deal with people with debt in each pathfinder area but can the minister promise that similar protections will be in place when the scheme is extended to the rest of the country? ‘The reason for doing pathfinders is to make it successful. We can’t anticipate at what level this will continue.’

Time will tell whether Pond will be congratulated for presiding over the introduction of a new era of housing choice for tenants on low incomes or a period when the sign ‘No DSS’ became more prevalent.