How the number of housing benefit claimants has soared under the coalition

New figures show that 320,738 more people are claiming housing benefit than in May 2010.

At every opportunity, Iain Duncan Smith and other Conservative ministers seek to give the impression that they're reducing the number of benefit claimants, counterposing themselves to Labour - "the welfare party". But as so often, the statistics tell a different story.

The latest figures from the Department for Work and Pensions show that the number of housing benefit claimants rose by 40,526 to 5.1 million in the year to May 2013, an increase of 320,738 since the coalition came to power. Of the total, nearly a million (987,610) are in work, a rise of 52 per cent (337,059) since May 2010. 

May 2010 4,7521,526

May 2011 4,879,182

May 2012 5,031,738 

Jan 2013 5,070,291  

Feb 2013 5,078,523  

Mar 2013 5,060,689  

April 2013 5,062,172  

May 2013 5,072,264  

It's a reminder that by imposing punitive welfare cuts (the benefit cap, the bedroom tax), rather than addressing the underlying structural causes of the inflated housing benefit bill (substandard wages, the lack of affordable housing, long-term unemployment), the government will only increase the number forced to rely on state subsidy to stay in their homes.

Before the recent Spending Review, Boris Johnson and Vince Cable, among others, urged George Osborne to remove the cap on the cap on councils' borrowing and allow them to build more affordable housing. Boris said:

We should allow London’s councils to borrow more for house building - as they do on continental Europe - since the public sector clearly gains a bankable asset and there is no need for this to appear on the books as public borrowing.

In policy terms, it is a no-brainer. The Chartered Institute of Housing estimates that raising the caps by £7bn could enable the construction of 60,000 homes over the next five years, creating 23,500 jobs and adding £5.6bn to the economy. But for almost entirely ideological reasons, Osborne refused to act. As Vince Cable commented on The Andrew Marr Show last month: 

Well that’s where the big gap is [social housing] and certainly as Liberal Democrats at conference, we’re going to be arguing how the government through local councils should be doing much more to build social housing. Absolutely right, that is a big problem area.  Nothing like enough has been done.
There is a better way to reduce the benefit bill than the coalition's salami-slicing: building 1.25 million affordable homes over five years (the level required to meet need), extending use of the living wage and investing more in skills and training. After the government's failure, it will be up to Labour to demonstrate it. 
Work and Pensions Secretary Iain Duncan Smith speaks at last year's Conservative conference in Birmingham. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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The tale of Battersea power station shows how affordable housing is lost

Initially, the developers promised 636 affordable homes. Now, they have reduced the number to 386. 

It’s the most predictable trick in the big book of property development. A developer signs an agreement with a local council promising to provide a barely acceptable level of barely affordable housing, then slashes these commitments at the first, second and third signs of trouble. It’s happened all over the country, from Hastings to Cumbria. But it happens most often in London, and most recently of all at Battersea power station, the Thames landmark and long-time London ruin which I wrote about in my 2016 book, Up In Smoke: The Failed Dreams of Battersea Power Station. For decades, the power station was one of London’s most popular buildings but now it represents some of the most depressing aspects of the capital’s attempts at regeneration. Almost in shame, the building itself has started to disappear from view behind a curtain of ugly gold-and-glass apartments aimed squarely at the international rich. The Battersea power station development is costing around £9bn. There will be around 4,200 flats, an office for Apple and a new Tube station. But only 386 of the new flats will be considered affordable

What makes the Battersea power station development worse is the developer’s argument for why there are so few affordable homes, which runs something like this. The bottom is falling out of the luxury homes market because too many are being built, which means developers can no longer afford to build the sort of homes that people actually want. It’s yet another sign of the failure of the housing market to provide what is most needed. But it also highlights the delusion of politicians who still seem to believe that property developers are going to provide the answers to one of the most pressing problems in politics.

A Malaysian consortium acquired the power station in 2012 and initially promised to build 517 affordable units, which then rose to 636. This was pretty meagre, but with four developers having already failed to develop the site, it was enough to satisfy Wandsworth council. By the time I wrote Up In Smoke, this had been reduced back to 565 units – around 15 per cent of the total number of new flats. Now the developers want to build only 386 affordable homes – around 9 per cent of the final residential offering, which includes expensive flats bought by the likes of Sting and Bear Grylls. 

The developers say this is because of escalating costs and the technical challenges of restoring the power station – but it’s also the case that the entire Nine Elms area between Battersea and Vauxhall is experiencing a glut of similar property, which is driving down prices. They want to focus instead on paying for the new Northern Line extension that joins the power station to Kennington. The slashing of affordable housing can be done without need for a new planning application or public consultation by using a “deed of variation”. It also means Mayor Sadiq Khan can’t do much more than write to Wandsworth urging the council to reject the new scheme. There’s little chance of that. Conservative Wandsworth has been committed to a developer-led solution to the power station for three decades and in that time has perfected the art of rolling over, despite several excruciating, and occasionally hilarious, disappointments.

The Battersea power station situation also highlights the sophistry developers will use to excuse any decision. When I interviewed Rob Tincknell, the developer’s chief executive, in 2014, he boasted it was the developer’s commitment to paying for the Northern Line extension (NLE) that was allowing the already limited amount of affordable housing to be built in the first place. Without the NLE, he insisted, they would never be able to build this number of affordable units. “The important point to note is that the NLE project allows the development density in the district of Nine Elms to nearly double,” he said. “Therefore, without the NLE the density at Battersea would be about half and even if there was a higher level of affordable, say 30 per cent, it would be a percentage of a lower figure and therefore the city wouldn’t get any more affordable than they do now.”

Now the argument is reversed. Because the developer has to pay for the transport infrastructure, they can’t afford to build as much affordable housing. Smart hey?

It’s not entirely hopeless. Wandsworth may yet reject the plan, while the developers say they hope to restore the missing 250 units at the end of the build.

But I wouldn’t hold your breath.

This is a version of a blog post which originally appeared here.

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