Wednesday, 6 February 2013

The real scandal of Housing Benefit ?

It used to be (Sept 2009) that £18 billion a year was spent on housing benefit in the UK, going to 4.4 million people.

How much ?

Well, lets start with the issue of a Billion Pounds. In the UK that used to refer to a million times a million, but now it is used to describe 1000 times one million.  So £18 billion ie £18,000,000,000.   If you divided £18,000,000,000 by 4,400,000 people who get housing benefit, then that works out at £4090 each.

But things have moved on, since the Government has tried to bring down the housing benefit bill,  the number of people needing housing benefit has increased to 5,000,000 and the total bill is now around £23,000,000,000,000
that's an average of £4600 each.
The Department for work and pensions estimates housing benefit payments to people living in property rented from private sector landlord were on average £107 a week (May 2012), which actually gives a figure of £5564 a year.

Private sector rents in May 2012 were on average £8544 a month.

Three major points to note

1. Tenants do not in the end get paid housing benefit - it is paid to Landlords
2. The Government could build or buy a whole lots more properties for the same money it effectively hands over to private sector landlords.
3. That ought to be considered the real scandal of housing benefit

The major change pioneered by Labour was the introduction of the Local Housing Allowance, by which tenants were limited to an a housing benefit payment in the private sector which reflected the average for their area. As an incentive to shop around for cheaper rents, they were allowed to keep a share of any savings should their rent come in lower.

No comments: