Myth 11: Stopping benefits to young people will save hundreds of millions

shutterstock_272173868Busted? New government measures, widely anticipated to be in next week’s Queen’s Speech, will remove housing benefit for most job seekers aged 18-21. The government says it will save £120m a year from the plan, after counting for exemptions such as single parents and care leavers. Ministers say this will help fund three million new apprenticeships. However, these savings have been disputed by young people’s homelessness charity Centrepoint, which says the exemptions would reduce the savings to just over £78 million. More interestingly, the charity says the knock-on costs of implementing the policy – such as increased use of public services if homelessness increases – would reduce the overall savings to just £3.3m. Centrepoint adds: ‘Even this is a conservative figure and only an additional 140 young people than already estimated would need to become homeless before the policy would end up costing more than it saves.’

Myth 10: Everyone receiving housing benefits is unemployed

Busted? Despite some of the headlines, the reality for housing benefit recipients is actually very different. An increasing number of working people are having to clam housing benefits to keep up with the rent. According to the 2013-14 English Housing Survey, almost twice the proportion of working households received housing benefit in 2013-14 than in 2008-09.

In 2008-09, 19% of social renters in work received Housing Benefit, increasing to 32% in 2013-14. For working households in the private rented sector the proportion increased from 7% to 14% over the same period.


Myth 9: Immigrants are taking social housing

Busted? The notion that foreign nationals are taking up social tenancies in droves has been a pervasive message and the tabloid press often call for stronger curbs. Migrants taking up Britain’s housing stock is also a key flank of UKIP’s election campaign. ‘Currently a home has to be built every seven minutes just to cater for migrant demand,’ the party’s housing spokesperson Andrew Charalambous has said.

But are immigrants ‘jumping the queue’ and moving into social housing in their droves? The evidence would suggest no. According to CORE data (official social lettings statistics) about 90% of social lettings go to UK nationals. Six per cent are let to people inside the European Union and 4% go to those outside the UK.


Myth 8: Benefit fraud takes up a large chunk of the welfare bill

Busted? Ministers launched a £1m poster campaign in October warning that the government would come down hard on benefit cheats. Government minister Mark Harper said at the time:’Those who cheat the system need to know we will use everything in our power to stop them stealing money from hardworking taxpayers, and that they could land themselves in jail when they’re caught.’

But is benefit fraud a big problem for the taxpayer? In 2013/14, £1.2bn of benefit was lost due to fraud. The total paid out in benefits was £164bn. So benefit fraud made up less than 1% of the overall welfare bill that year. However, the total amount of cash lost due to fraud will be less than that, as a lot of the money will be recovered by the Department for Work and Pensions (DWP).

Source: Department for Work and Pensions

Source: Department for Work and Pensions

Myth 7: House builders are concreting over the countryside

Busted? House building is destroying the UK’s green rolling countryside, or so it would be believed after reading some broadsheets. In fact, the country is far more untouched than is commonly held. According to the UK National Ecosystem Assessment, published last year, just 6.8 of the UK is classed as ‘urban’. This is 10% of England, 1.9% of Scotland, 3.6% of Northern Ireland and 4.1% of Wales.


Myth 6: Housing chief executives are hypocritical fat cats

Busted? The highest-paid chief executive of Britain’s biggest housing association, David Cowans, of Places for People, earns £432,928. Sounds like a lot. The Daily Mail fumed at the salaries, accusing the ‘fat cats’ of ‘hypocrisy’ for opposing an extension of the Right to Buy to housing associations.

daily mail2

It is an accusation that is often levelled at housing bosses, and housing minister Grant Shapps also took up this cause in 2010. But chief executives argue that their salaries are on par or far lower than organisations of the same size in the private sector, So let’s settle this. In 2013-14, Places for People had a turnover of £485m. What do chief executives of similar-sized organisations in the private sector receive?

Travelodge provides accommodation of a slightly different kind and in 2014, turned over £497.2m. Its highest-paid director is paid £700,000. Arsenal football club turns over nearly £200m less than PfP, with the figure reaching £302m in 2014. Nevertheless, its chief executive, Ivan Gazidis, is paid £1.39m, plus a bonus of £692,000.

People are free to think what they like about social landlords’ salaries, but it could be that the argument is slightly more nuanced than the Daily Mail’s angry front page.

Myth 5: Social housing goes to single mums

Busted? Stories about single mothers believed to think the state ‘owes them a living’ are commonplace. Columnists lament the death of ‘respectable families’ living in social housing and blame the ‘points-based’ allocation system, which they says allows single parents to slip ahead in the queue.

How true is this? While it is correct that councils have a legal duty to house homeless families, that does not mean that single mums make up the majority of the country’s housing estates. According to CORE data (official social housing statistics), only 19% of social lets go to single parents in England.

Having children does not necessarily guarantee that families will receive a social home. Official figures show that at the end of last year, 46,700 families with children or pregnant women were living in temporary accommodation in England.


Souce: Shutterstock

Myth 4: Lots of rich people are living in social housing

Busted? There are 3.9m people living in social housing, according to the English Housing Survey. However, there is a perception from some quarters that a significant number of these renters are very wealthy. The coalition previously announced it would allow social landlords to force tenants who earn more than £60,000 to pay market rent or leave their tenancy.

Government estimates show there could be as few as 11,000 households earning £60,000 or more in social housing. Remember, that’s the whole household not just one salary. That’s 0.3% of England’s social lettings. And just 1,000 (0.03%) households earn more than £100,000.


Inside Housing research in 2013 showed the policy will not work in parts of 16 London boroughs because tenants will have to earn more than the £60,000 cap to be able to pay their rent anyway.

Myth 3: All homeless people sleep on the streets

Busted? Although homelessness charities spend a large proportion of their time educating the public, this is still a popular misconception. Homelessness can mean living in temporary accommodation, sofa surfing, squatting, or in a living in a hostel.

Official homelessness figures show that town halls accepted 53,250 households as homeless in England in 2014, but very few of them are rough sleepers. A total of 2,744 people were spotted rough sleeping by councils last Autumn – an increase of 14% compared to 2013.


Myth 2: Social tenants are subsidised by the taxpayer

Busted? The phrase ‘state subsidised’ is a common description for social housing. The government partly funds social landlords in developing sub-market rent homes through the Affordable Homes Programme. But it’s not much funding, especially since George Osborne slashed the social housing budget by more than 50% to £4.4bn in 2010. Many social landlords are far more reliant on the markets than capital subsidy to build their homes. Housing association L&Q has plans to build 50,000 homes over the next ten years without any grant at all.

When tenants live in low-rent properties it means that the government has to shell out less on housing benefit – so in the long run, so perhaps perhaps building affordable housing is investment, not subsidy.