6 Transitional arrangements and Discretionary
Housing Payments
Increase in Discretionary Housing
Payments
129. Discretionary Housing Payments (DHPs) provide
claimants with further financial assistance when a local authority
considers that help with housing costs is needed. The regulations
covering DHPs are the Discretionary Financial Assistance Regulations
2001. The Department states that:
The increase in the Government contribution to
Discretionary Housing Payments will be an important element in
the strategy to ease the transition for existing customers. In
2011-12 the Government will increase its allocation by £10
million and in subsequent years it will treble its allocation
to £60 million per year. This will provide local authorities
with substantial support in helping customers through the transition
period and help avoid evictions.[160]
When the Government laid Regulations in November
2010 to implement the changes, it announced a further £50
million over the Spending Review period "to help meet the
housing needs of claimants who are affected by the changes".[161]
This brings the total amount of additional funding for DHP over
the Spending Review period to £180 million.[162]
130. The LGA suggests that "the increase by
£10million a year in 2011-12 and by £40 million a year
(which will be a total government contribution of £60 million)
comes against a likelihood of increased demand." It also
highlights that "local authorities are currently permitted
to top-up DHP grant payments in a ratio of 3:2; assuming that
this remains the case the total theoretical DHP payments will
become £150 million per annum; (£90 million in council
contributions; £60 million grant from the Government)".
It adds however "whether local authorities can afford to
top up at a time when their overall grant from the government
could shrink has got to be debateable".[163]
131. Crisis states that the increase "is a fairly
insignificant amount set against the scale of the cuts".[164]
A number of submissions referred to estimates from the Chartered
Institute of Housing, which show that the increase announced in
the June Budget equated to about £8.30 per household per
year. In England this would support around 60,000 who face the
maximum loss from the 30th percentile change for one year (leaving
nothing for social sector claimants or those facing having their
LHA capped). This is equivalent to just 1.5% of the entire caseload
and less than 2.5% of the total package of Housing Benefit cuts.[165]
132. The Mayor of London estimated that in 2011-12,
the demand for DHP in London could be in the region of £38
million (almost four times the additional amount being made available
in that year). [166]
London Councils believed that "to avoid potential evictions
and to manage the migration, an increase of at least £20
million is necessary to the 2011-12 DHP pot and £18 million
of that should be directed to London". It added that:
The Homelessness Prevention grant is scheduled
to end in 2010-11, being the last of the three years originally
granted. It is imperative that this grant is maintained and it
should be increased to match the extra workload arising from the
continuing need to liaise with HB departments, landlords and claimants
at risk.[167]
133. Westminster City Council stressed that it had
experienced the combined effects of having the highest number
of losers and the largest shortfalls. "Kensington & Chelsea
are similarly affected by large shortfalls but have significantly
fewer losers in comparison to Westminster: 1,650 losers in Kensington
& Chelsea and 4,010 in Westminster". It argued that there
is a strong case:
[...] for allocating the greatest share of the
extra DHP funding to councils such as Westminster with large parts
of its borough within the central London rental area. […]
The formula for distributing the extra DHP should therefore not
be based solely on a headcount of the number of losers. Instead
the amounts of shortfall between existing LHA rates and the caps
should also be taken into account.[168]
Birmingham City Council stressed that DHP should
be allocated fairly across the country:
The potential additional allocation (if awarded
on the current formula) would result in approximately £300,000
in year one followed by an extra £1.2 million in successive
years. Given that current budgets are over-committed this will
be insufficient to offset the likely problems faced by customers
due to other changes.[169]
However, Brighton & Hove City Council pointed
out that "DHP allocation is going to be based on a separate
formula which will direct the additional funding to the areas
that will suffer the most detriment out of the proposed changes.
In effect this means, almost exclusively, central London".
[170]
134. Peabody called for "clarity on how it [DHP]
will be prioritised and allocated. If we can agree consistent
guidelines, we will be able to better advise tenants, and succeed
in taking the right action sooner to deal with arrears".[171]
The Association of Housing Advice Services recommended that DHP
"should be targeted or ring fenced for only those tenants
who are facing losses due to the LHA changes and prioritised for
families where the council is seeking to prevent homelessness".
[172]
135. The Minister explained to us the thinking behind
the increase in funding:
Rather than us, every time there is a problem,
putting in a blanket system, which is incredibly expensive and
not needed, […] making it the responsibility of people on
the ground and providing resources in the discretionary housing
allowance is precisely the way that we can allow for those tough
cases of people who need support. We can then get that support
to them. That is the idea behind it.[173]
However, Leonard Cheshire Disability, amongst others,
told us that "given payments made under the scheme are discretionary
with no corresponding right to support and no formal appeals process,
we are concerned that this action alone is an insufficient safeguard
against the impact of the proposed cuts in Housing Benefit on
disabled people".[174]
The Child Poverty Action Group argued that "discretionary
payments are no substitute for benefit entitlement as of right".[175]
136. The National Association of Welfare Rights Advisers
(NAWRA) and Contact a Family highlighted that these payments have
traditionally been for short periods of time and that there is
no guarantee of award either at first application or on renewal.[176]
NAWRA argued:
Not only does this make it extremely difficult
for people on fixed income to budget, but with possible changes
to the amount of LHA payable on renewal claims it must make it
difficult to achieve stability. This can only lead to a less favourable
climate between landlords and tenants.[177]
137. The Muscular Dystrophy Campaign pointed out
that "you cannot claim for a DHP until you have moved into
the relevant property. This means that a claimant who requires
a larger property than the LHA will provide for would have to
sign a lease and move into a property before they know if they
will be able to afford the rent."[178]
Roger Harding from Shelter said that "there is a gap currently
in the transitional funding […] it won't be able to help
with other things such as purchasing new school uniforms if people
have to move out of the catchment area of schools. So, currently
we have not seen any concrete proposal from the Department that
suggests how they are going to fill that gap".[179]
138. The Law Centre NI expressed its concern "as
to how long this pool of funding will last and what additional
safeguards will be in place should it run out. We would welcome
further clarification on this matter".[180]
The Royal National Institute of Blind People told us that the
increase in funding "is welcome as far as it goes and will
help cushion the impact of adverse changes in a number of individual
cases, but is not greatly relevant to the overall structural issues".[181]
139. The Minister said that the increased DHP:
[...] will keep people in homes where needed;
there are some people who may be living in more expensive homes
than the LHA rate will become who will need to stay there, for
instance people who have very heavily adapted that home. […]
Clearly, the rest of it will be to help with the transition and
to support recipients.[182]
140. We welcome the Government's £50 million
addition to the funding originally announced for Discretionary
Housing Payments (DHP) in the June Budget, which brings the total
amount of additional funding for DHP over the Spending Review
period to £180 million. We note however, that the sum allocated
is intended to provide a solution to a very wide range of identified
areas of concern. We would therefore like to see further analysis
of the anticipated demand for this funding, compared to the resources
available, in order to understand the extent to which this fund
can support benefit claimants through the transition period and
help avoid evictions. We recommend that DWP carries out robust
monitoring of DHP to ensure that any shortfalls and unmet needs
are identified and acted upon swiftly.
Transitional arrangements
141. The British Property Federation stated that
"one of the most worrying aspects of the current reform package
for 2011-12 is the attention paid to transition arrangements".[183]
The Residential Landlords Association suggested that:
Historically when changes have been made, particularly
changes of this magnitude, either existing customers have been
protected altogether or at the least the changes have been phased
in over a period of time. There is no such protection here and,
indeed, the change-over will be on a hit or miss basis depending
on what is the date of the anniversary of the claim.[184]
142. Crisis told us that "in those areas where
the cuts to benefit levels are the greatest, we would like to
see transitional measures put in place so that only new claimants
are affected. As well as being beneficial for the individuals
involved, reducing the number of households who need to move would
lessen the burden on local authorities". It also suggested
that "given the very tight timescale involved and the fact
that claimants affected by the caps will be affected again by
the move to the 30th percentile later in the year, we would like
to see the introduction of the caps moved back to October 2011".[185]
The TUC also pointed out that some tenants would have to move
home multiple times.[186]
Lib Peck from London Councils said that:
It is the double whammy of changes coming in
in April 2011 and then in October 2011—so the caps and then
the percentile decrease from 50% to 30%—that we are very
concerned about, and that is what we are saying impacts on 160,000
households in London, and the fact that both of those are within
a six-month period.[187]
143. Citizens Advice Scotland argued that "the
lack of transitional protection means that these caps will be
applied to the existing claims on their next annual review, meaning
that some tenants will suddenly find that their rent is completely
unaffordable".[188]
Gingerbread, amongst many others, called for a delayed introduction
of caps to LHA rates to October 2011:
This would align with the introduction of 30th
percentile rates and ensure that households are not forced to
move twice in quick succession if they are affected by both measures.
Single parent families, as well as couples with children, are
more likely to be affected by the caps, and it would be extremely
unfair to expect families with children to move twice, potentially
within the space of six-months, if they are affected by both measures.[189]
144. We asked the Minister if he would consider
easing the transition by accepting the anniversary of the tenancy
as the breaking point when the new rates come into effect. His
response was that:
The process starts in April or October, depending
on the start date, and takes effect at the next anniversary [...]
We are talking about running right out to October 2012, in practice,
the whole process, which does two things: it means that it is
not sudden death—it runs to the natural break point, the
annual anniversary of your contract—and allows the adjustment
process to take place over this extended period.[190]
145. The Chartered Institute of Housing stressed
that "there must be clear and timely communication to the
individuals affected about the change to their benefit entitlement.
Particular attention should be paid to vulnerable claimants".[191]
Homeless Link stated that the Government must ensure "that
all claimants are informed of impending changes by letter or email.
It is vital to give due notice to people who may be affected
so they can begin the process of adjustment or housing move now".[192]
However, Loughborough University emphasised that "informing
tenants of changes to LHA rates by letter is unlikely to be sufficient.
Furthermore, our research has found that information given to
tenants by Local Authority staff is described as being "patchy"
and sometimes conflicting. This would need to be addressed".[193]
146. Paul Howarth from DWP agreed that:
It is absolutely vital that we give as much information
to recipients of Housing Benefit, particularly existing recipients,
as we possibly can. […] We will be, on this occasion, breaking
our ban on paying for communication materials, you will be glad
to know, and we will be funding whatever is needed by way of leaflets,
posters, draft notification letters; anything that we can do,
basically, to help local authorities in this transition, we will
do.[194]
As we have already indicated, after this evidence
was taken, the Government laid the Regulations to implement the
changes and amended the timetable for bringing them in as follows:
All changes that will adjust the way Local Housing
Allowance rates are calculated will come into force from April
2011 for new claims.
Existing claimants will continue at their current
rate of benefit until their claim is reviewed by their local authority;
they will then have a further period of transitional protection
at their current Local Housing Allowance rate of up to nine months
if there has not been a relevant change of circumstances.[195]
147. Serious concern was expressed when the measures
were first announced in the June 2010 Budget both about the inadequacy
of transitional arrangements and the timetable for change. This
would have meant that some households would potentially have been
affected twice in 2011 by the changes to be introduced in April
and then in October. We welcome the Government's recognition of
the depth of these concerns and its subsequent decision to allow
existing claimants a transitional period of at least nine months.
148. This welcome amendment to the timetable for
change does not however lessen the obligation on the Government
to support local authorities in communicating the changes to benefit
recipients. We believe that it is essential that all households
in receipt of Housing Benefit are giving clear information about
how and when the changes will affect them. This may best be communicated
in a letter giving specific details on what the new benefit rate
for that household will be; from when it will apply; and, where
relevant, the likely shortfall between the rent and the new benefit
level.
160 Ev 63 Back
161
HC Deb, 30 November 2010, cols 71-72WS Back
162
Qs 105 and 154; and HC Deb 30 November 2010, cols 71-2WS Back
163
Ev 68 Back
164
Ev w89 Back
165
Ev 40 [Chartered Institute of Housing as quoted by British Property
Federation]. Back
166
Ev w138 Back
167
Ev 71 Back
168
Ev w176 Back
169
Ev w161 Back
170
Ev w65 Back
171
Ev w123 Back
172
Ev w181 Back
173
Q 196 Back
174
Ev w141 Back
175
Ev w129 Back
176
Ev w157 and Ev w190. Back
177
Ev w157 Back
178
Ev w25 Back
179
Q 75 Back
180
Ev w243 Back
181
Ev w22 Back
182
Q 105 Back
183
Ev 40 Back
184
Ev 105 Back
185
Ev w91 Back
186
Ev w164 Back
187
Q 25 Back
188
Ev w249 Back
189
Ev w173 Back
190
Q 190 Back
191
Ev 59 Back
192
Ev w108 Back
193
Ev w111 Back
194
Q 194 Back
195
HC Deb, 30 November2010, cols 71-72WS Back
| 
