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Lenders, landlords and tenants united on housing benefit


Published: 1 November 2011 | Author: Bernard Clarke

The House of Lords debated an amendment to the Welfare Reform Bill at the end of last month on whether tenants should be free to choose who should receive their housing benefit – themselves or their landlords. The amendment is supported by an alliance of 18 diverse organisations, representing lenders, landlords and tenants, all of which believe that benefit recipients should have the right to choose.

Lord Best opened the debate by explaining that, in a survey by research consultancy Policis, 93% of social tenants preferred their housing benefit to be paid directly to the landlord. “It seems that those on benefit prefer the option of knowing that their rent has been paid, allowing them to budget for other expenditure in the knowledge that their home is secure,” he said.

A number of other peers argued in support of the amendment. Baroness Meacher said that, as the same issues of vulnerability to debt, budget management problems and threat of eviction crop up regularly at Citizens Advice Bureaux, she believed that “the reality is that direct payments to landlords present the one amendment that really could ensure a roof over the head of claimants, as no other amendment really can.”

Lord McKenzie of Luton said: “We know that the government argue that payment to tenants is about promoting financial responsibility and breaking welfare dependency. But why is the choice of a tenant to have their housing support paid directly to landlords not a financially responsible decision?”

And Lord Whitty asked: “Is it not the case that there will sometimes be a temptation to dip into the housing support funds for a family emergency, a cooker on its last legs, new shoes for the kids and so on? Of course, direct payments do not solve the inadequacy of resources but they prioritise the security of the home, and tenants should have the choice to do this.”

In response, welfare reform minister Lord Freud reiterated his “determination” that the introduction of universal credit (and direct payments to tenants) does not undermine the financial stability of the housing sector. He explained that one of the key principles of welfare reform is to make the experience of claiming benefits close to that of receiving a wage.

“Choices available to working households do not include opting for their employer to pay the landlord direct,” Lord Freud said. He also argued that tenant choice becomes landlord choice when power is in the hands of the landlords.

At the end of the debate, Lord Best withdrew the amendment. But the CML will continue to lobby for tenants to be able to choose whether to receive their housing benefit or have it paid directly to their landlord.