Government risks pushing households into homelessness, campaigners warn

The government risks pushing thousands of households into “poverty, problem debt, and homelessness” if it goes ahead with the planned cut to universal credit in autumn, according to a group of housing charities and campaign groups.

A joint statement by eight organisations, including The Big Issue, accuses the Westminster government of making “no assessment” of how the freeze to housing benefit introduced in April combined with the upcoming £1,000 a year cut to universal credit, due to come into effect as the furlough scheme ends, will affect families.

The statement comes from debt charity StepChange, the National Residential Landlords Association, Nationwide Building Society and its specialist arm Mortgage Works. homelessness charities Crisis and Shelter, industry body Propertymark, and The Big Issue’s Ride Out Recession Alliance.

Sign The Big Issue’s petition to #StopMassHomelessness

The number of households receiving rent support more than doubled between February 2020 and 2021, to 1.5 million, according to government figures. More than half of that number already don’t receive enough support to pay their rent.

The government increased universal credit by £20 per week at the start of the pandemic alongside the furlough scheme to help employers and workers. Both are due to end in September while the UK economy is still reeling from the impact of the Covid crisis.

“With levels of unemployment still higher than before the pandemic and many getting left behind, we can’t afford to be complacent, especially with the threat of further layoffs looming when the furlough scheme ends next month,” said Paul Noblet, Centrepoint’s government and parliamentary affairs lead.

“With young people also facing the loss of a quarter of their universal credit when the temporary uplift ends next month, it’s vital that ministers look again at how best to support vulnerable young people.”

The Big Issues’s Stop Mass Homelessness campaign includes a nine-point plan to prevent the prospect of widespread homelessness in the autumn, including reversing the cut to universal credit and the freeze to local housing allowance.

The full statement reads:

“The UK Government must complete and publish a full assessment of the impact on renters of their decisions to freeze Local Housing Allowance and cut Universal Credit, which risk pushing many households into poverty, problem debt, and homelessness.

“In the wake of the pandemic, we saw bold and swift action from the Government to prevent a housing debt crisis including restoring Local Housing Allowance rates to the 30^th percentile of market rents and increasing the Universal Credit Personal Allowance.

“With the economic impact of the pandemic increasing the financial strain on families, across the country the number of private rented households in receipt of the housing element of Universal Credit increased by 107 per cent between February 2020 and February 2021. Over 55 per cent of these households have a shortfall between the housing support they receive and the rent they have to pay.

“The UK Government has confirmed that where such shortfalls exist, the median amount is £100 a month. This points to a need for continued support for families and individuals to cover the cost of rents. Yet since April this year, Local Housing Allowance has been frozen in cash terms, and later this year, Universal Credit will be cut by £20 a week.

“Whilst the Institute for Fiscal Studies has described changes to Local Housing Allowance as ‘arbitrary and unfair’ we have seen no assessment from the UK Government of the impact either of these policies will have on the capacity of recipients to cover rent payments.

“As organisations representing landlords, letting agents, tenants, people facing homelessness, and debt advice services, we are united in calling on the UK Government to complete and publish a full assessment of the impact of both of these policies on the ability of renters to meet their housing costs.

“We believe that the UK Government should reverse its decisions to cut Universal Credit and to freeze Local Housing Allowance. To apply policies like these without doing any meaningful impact assessment is, we argue, lacking the necessary foresight and consideration of the impact they will have on people’s security of tenure and well-being and for many will threaten their chance of recovery.

Hundreds of thousands of people are at risk of losing their homes right now. One UK household is made homeless every three-and-a-half hours.

You can help stop a potential avalanche of homelessness by joining The Big Issue’s Stop Mass Homelessness campaign. Here’s how:

• Read our nine-point plan to Stop Mass Homelessness
• Sign the petition to add your voice to our campaign to Stop Mass Homelessness
• Join the conversation and share your support using the hashtag #StopMassHomelessness