Wednesday, 30 May 2012

Is A Housing Benefit Rebate A New Solution?

A straight-to-the-point post today where I would like to put forward an idea and have you shoot it down. Tell me here or on Twitter any of the reasons why you think this would never work. Like the earworm song that you hear just as you leave the house and it crawls around your head all day, this is an idea that I first wrote about back in March but has since refused to leave my mind. Therefore I think the sanest thing all round would be to see if you can shoot it down and if not, see what we should do about it.

So what is it? It’s quite a simple thought but potentially if it worked then it could have a far-reaching impact on social housing. We all know the Government really wants to cut the benefit bill – so I've been thinking about a completely new model of funding housing associations that would help them achieve that. I think we all accept we are now in a competitive and a payment-by-results world. But, in my model the capital grant needed to build a new home isn't what you compete on. The money for building the house comes from the government, but what we would compete on is the level of a rebate of the housing benefit – and this rebate would be paid back to the government.

In practice we would say to the government, “You give us £X to build new houses and we'll add our own money to it. For this we will promise to rebate you Y% of the housing benefit we would have otherwise have received from you, for the next five years.” It’s attractive to the government because they get a much-needed reduction in their housing benefit bill, but an added benefit to both housing association, tenant and the government is that the way we would lay off our risk is to focus on getting people into work. Because if we got a tenant into work then they would still pay the rent, but the amount that they claim through housing benefit reduces and we save money on the rebate.

It strikes me that this model has the makings of a truly fair system where the housing association is encouraged to use its power in the community to build something beyond the bricks and mortar of the houses. If all of us looked to think strategically and create jobs, and get recognised for that, we know that we could do more.

So tell me – why wouldn’t it work?

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