Welfare reform and homelessness

Speech by the Rt Hon Chris Grayling MP

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Rt Hon Chris Grayling MP

Good afternoon

Today you have asked whether welfare reforms will be fair for homeless people.

Let’s take a moment to consider the fairness of the current system.

Is it fair that some people are worse off when they leave benefits and go into work?

Is it fair that some people lose out because the system doesn’t respond quickly enough to changes in circumstances? Or that the fear of losing puts so many people off from even trying to change their lot?

Is it fair that some of the most vulnerable people, those most in need of support, are parked on benefits because they are viewed as too difficult to help into work?

Our reforms will bring fairness back into the welfare system.

We will ensure work pays.

We will simplify in and out of work benefits, replacing them with a single Universal Credit and remove the cliff edge loss of income that makes some people reluctant to leave the safety of the benefits system.

And we will ensure everyone who is able to work gets the support they need to find and stay in work.

Our reforms are based upon the principle of social justice, which means always providing a second chance.

For homeless people it means giving them a fair shot at over-coming the complex causes of homelessness and opening up the possibility of life change.

It means not writing anyone off.

We all want the same thing - to see an end to homelessness.

It is incredibly sad that tonight, here in London, an estimated 400 people will feel their only option is to sleep on the streets.

It is not a sign of a socially just society.

Nor are the tens of thousands of vulnerable people, who this evening will sleep on a friend’s sofa, or in a shelter, or in a squat.

Insecure accommodation cannot be the only option for our most vulnerable people.

But putting a permanent roof over someone’s head is only part of the answer.

To truly bring an end to homelessness we need to see beyond bricks and mortar and help people deal with the root causes of disadvantage.

The underlying issues- family breakdown, drug and alcohol misuse, poor physical and mental health, behavioural problems, a lack of education and skills, crime and so on.

And we know that all too often these issues occur in parallel. The most common trigger for homelessness is family conflict but this is often driven by one, usually more, of those other issues.

To bring a sustainable end to homelessness, we must offer support in parallel too. It is not enough to find someone a bed to sleep in, or even a home they can call their own, if the underlying issues are not addressed.

The Government understands that the causes of homelessness are complex and the solutions fall across and beyond Government boundaries.

That is why we have set up the Ministerial Working Group on preventing and tackling homelessness, bringing together eight departments with responsibility for providing different aspects of support to address the underlying causes of homelessness.

It provides a focus for Government action on homelessness but it does not have all the answers. There is a significant role for local authorities and the voluntary and charitable sector to continue to work with homeless people at an individual level.

Which is why, despite these tough economic times, we have maintained the level of the Preventing Homelessness Grant, with £400 million being made available to local authorities and the voluntary sector over the next four years.

And it is why we have made a further £10 million available to Crisis, specifically to help single homeless people access the private rented sector.

Fairness is at the heart of our welfare reforms.

We are reforming Housing Benefit to make it fairer to both those claiming benefits and the taxpayers who support them.

Measures included in the Welfare Reform Bill will ensure that people continue to act responsibly and make choices about the size and location of their accommodation based on what they could afford if in work and not on benefits. These further changes build on the reforms to the Local Housing Allowance that we have already made.

Rents in the private rented sector have, in part, been distorted by the high rents the benefits system has paid out.

Research has shown that most low income working households pay less to rent a place to live than Local Housing Allowance would pay for the same property.

Now that cannot be right.

It makes it much more difficult for people to move from benefits and into work.

Nor can it be right that until March this year people were allowed to claim excessive rates of Housing Benefit in parts of London - thousands of pounds per month in some cases - to pay rent that the vast majority could not afford, even those on high incomes - and those people themselves could not afford when back in work.

By allowing a system to continue in which the State pays rents so high that it is impossible for people to leave benefits and pay their own way we compound poverty rather than alleviating it.

That is why, from April, we changed the way rates are set and imposed an overall weekly cap so that the highest Local Housing Allowance rate is now £400 per week that’s nearly £21,000 a year - it is no small sum.

We expect these reforms will mean rents will fall.

Our assessment is that the vast majority of Housing Benefit claimants will remain in their homes.

However, we accept there may have to be some adjustments and have made transitional support available to Local Authorities to help people make the necessary changes.

For the minority who will have to move, there will be support to help them find more suitable, sustainable accommodation.

Support for homeless people should also be about sustainability, helping people leave the streets for good, and that does mean addressing their wider issues.

The Ministerial Working Group will shortly publish its first paper on homelessness. This will focus on the most vulnerable homeless people - rough sleepers. It will include some key commitments for those already sleeping on our streets and those at risk of rough sleeping.

A key part of our approach to homelessness is helping those who can work to find work.

Employment should be part of the first conversation we have with any homeless person trying to get back on their feet.

I do not believe in the approach that we must first solve the immediate issue of housing, and then deal with the underlying causes of homelessness and only once all of their issues have been resolved have a conversation about finding work.

Of course we must address the immediate issues of shelter, warmth and security.

But as we heard in the film employment, for those who can work, can be a really important part of stabilising a new lifestyle and helping reintegrate into society and truly transforming lives.

Eighty per cent of St Mungo’s clients said one of their goals was to get back into work, and we have just heard Crisis’ view on this is much higher (97 per cent). There is no doubt homeless people want to get back into the work place. We need to build on that aspiration and understand that having a job is an important part of reintegrating into society for any homeless person trying to start afresh.

Employment is the one of the most sustainable routes out of homelessness, poverty and disadvantage. The benefits are clear, even a few hours a week can help establish a routine, provide extra cash, and help someone settle into a new life.

There are two key elements to providing employment support for homeless people. Firstly, a simplified benefits system that ensures work pays, makes the move from benefits to work easier and supports those on the lowest incomes to keep more of the money they earn.

That’s what Universal Credit is all about, it is designed to make work pay, so that whatever the situation, whatever their circumstances whether they are starting off with just a few hours, claimants will always be better off, the cliff edge where people would see all their money disappear is itself disappearing.

The Universal Credit will also include housing support. We are working through the detail of this at the moment but the guiding principle will be fairness. Rents will be paid at the market rate and accommodation provided will match need but not exceed affordability.

The second key element is the Work Programme; launched two weeks ago this is a revolutionary approach to employment support, built around the needs of the individual and focused on achieving long-term, sustainable job outcomes.

The Work Programme is revolutionary for a number of reasons.

Providers are paid primarily by results and results are measured over a long period - over two years in some cases.

The payment structure recognises that some people need more support and payments are higher for the hardest to help. This varied payment structure combined with longer contracts has encouraged the private sector to invest up to £580 million of their money in the first year.

We’re also trusting the professionals, we are saying to the organisations involved that they can design the programmes that work - the so-called black box approach. We want organisations to be free to do what they know works and so beyond a few basic requirements we will not dictate how this support should be delivered.

In addition the Work Programme contracts encourage providers to involve voluntary and community sector organisations to deliver specialist support. It is often the case that these groups are best placed to work with the most vulnerable, those with the most complex issues. We want to build on this experience and expertise and really add value through the Work Programme. For example, in London alone there are 160 different charitable organisations dedicated to ending homelessness - Work Programme provision needs to complement this support.

I know some organisations have already been contracted to provide Work Programme support; both the Single Homeless Project and Shelter will be involved in delivery of the Work Programme.

The Work Programme is central to this Government’s plans to tackle worklessness, we know unemployment is one of the key drivers of homelessness and so the package of support we offer homeless people will include specialist employment provision.

This is where we need your help, we can provide a range of tailored support for vulnerable people, including homeless people - but we need to know who they are.

For example, if we identify someone on Jobseeker’s Allowance who is homeless, they will have the option to volunteer for early access to the Work Programme. If they take up that option, we can pay providers more to help them get into work - up to a third more than they would have received for a JSA claimant with no particular  barriers to work.

But the only way we have to identify people who are homeless, those who need this additional support is if they identify themselves to Jobcentre Plus.

Currently we have 13,500 claimants in Great Britain with the “person without accommodation” marker on their record - we know this is a significant understatement. But we need your help to identify people and get them the help they need. Please encourage them to tell us about their situation.

This link needs to be made on the ground. Frontline Jobcentre Plus staff, not central Government, have the expertise and local knowledge to work directly with you and your clients, to provide the tailored support homeless people need to find work.

Government is making it easier for District Managers to make these local links and work with the voluntary and community sector by modernising the way Jobcentre Plus delivers its services and handing more responsibility and some funding to frontline staff to use their discretion. This means they can focus on getting people into work not on following rigid processes, thus reducing bureaucracy and unnecessary form-filling.

So, I have two things to ask of you today:

Firstly, please encourage your clients to self-identify to Jobcentre Plus so we can ensure they get the help they need.

Secondly, I’d urge you all to work with your local Jobcentre Plus to provide more coherent support and case manage in a much more sophisticated way.

It is only by working together, at a local level, supporting individual need, that we will be able to change lives and succeed in the goal we all share of ending homelessness for good.

Thank you very much.

Published 21 June 2011