42.Local authorities have wide discretion in the criteria they apply to all three schemes in the local welfare safety net. This is a key part of the policy design: the intention is that councils design and administer their schemes to meet local circumstances and priorities. There is strong evidence from official evaluations and independent reports that this is happening in practice.
43.Concerns remain, however, that wide discretion and budgetary pressures have led some authorities to impose criteria which create a “postcode lottery” in access to support, sometimes contrary to DWP guidance. In this chapter we consider the case for a greater level of prescription in DHP and local welfare assistance criteria, to protect particular groups from being unfairly excluded (variations in Council Tax support, and their potential implications for the national benefits system, are considered separately in chapter 6).
44.It should be noted that a high level of local and regional variation in use of DHPs is to be expected. Local housing stocks and markets vary greatly, with consequent effects on need. The DWP calculates and distributes individual local funding allocations on this understanding (see chapter 5).
45.An obvious example is London, where demand for housing, prices and rents, and general living costs are highest. The Benefit Cap, currently set at a national level, therefore has the greatest effect in the Capital—46% of all claimants affected by the cap in 2014/15 lived in London.
46.The removal of the social sector spare room subsidy affects a greater proportion of tenants in areas where there is the greatest disparity between the average size of family households and the type of available housing stock—the North West of England is a particularly prominent example. The New Policy Institute told us that in the North West and North East of England there were “more than three times the number of one bed households in the social rented sector affected by the policy than there were one bed social lettings in 2013/14.”
Figure 1: DHP spending in English regions, 2014/15 (£)
We consider the effectiveness of the Government’s calculation and distribution of funding allocations to meet these varied demands in more detail in chapter 5.
47.While the above regional variations are to be expected as a consequence of national policy, witnesses were concerned about variations which were instead a consequence of local authorities applying particular DHP criteria and conditions, sometimes contrary to the DWP’s guidance and case law.
48.Giles Peaker, a leading Legal Aid housing law solicitor in London and Chair of the Housing Law Practitioners Association, emphasised that DHPs were:
[…] legally and to some extent politically expected to provide medium to long-term support to those who would otherwise suffer discriminatory effects from welfare reforms.
This is particularly the case in relation to disabled people, to whom DHPs have been considered by the courts to be essential in certain circumstances to prevent welfare reforms having unreasonable or discriminatory effects. The circumstances in which this has been found to apply include the removal of the social sector spare room subsidy from grandparents caring for a disabled grandchild who required overnight carers and, therefore, an additional bedroom. Mr Peaker also reported cases in which local authorities had refused to grant DHPs in relation to disabled people affected by the Benefit Cap, on the grounds that they had not actively taken steps to move to cheaper accommodation, despite the fact that they lived in specially adapted homes.
49.Giles Peaker told us that, according the DWP’s own research and contrary to a relevant High Court ruling, some 75% of local authorities take Disability Living Allowance (DLA) or its replacement benefit for disabled people of working age, Personal Independence Payment (PIP), into account when calculating a DHP applicant’s income for the purposes of deciding whether to grant a DHP. This is despite DWP’s guidance that local authorities should have regard to the relevant court ruling. DLA and PIP are expressly not income-replacement benefits; entitlement is related to the extra costs incurred in day-to-day life as a result of the claimant’s disability.
50.We asked Lord Freud whether the Government would consider putting the DWP’s guidance to local authorities on appropriate use of DLA/PIP income in determining DHP award decisions onto a statutory footing. He told us he saw “no particular benefit” in doing so, because the guidance was “well-used” by local authorities.
51.During our visit to Queen’s Park we spoke to a single woman who cared full-time for her 23 year-old son, who has severe autism and requires 24-hour care. Her son had been in receipt of the higher rate of DLA care component since the age of seven. She told us that both the DWP and the local authority had acknowledged that she was her son’s full-time carer. She had become subject to the Benefit Cap when her son reached adulthood, because he was then no longer considered part of the same household for DWP benefit purposes and therefore an exemption to the Cap no longer applied. This left her with a rent shortfall of £90 per week.
52.In the short-term she was assisted by a DHP, but the local authority later refused to extend it. She told us she was now in serious rent arrears, with no remedies being suggested by either the local authority or the DWP. She believed her only option was to find employment, which would inevitably mean placing her son into care at considerable public cost. She felt a particular sense of unfairness because she had recognised the unsustainability of her housing situation some 10 years ago and had since been asking the council to re-house her and her son, to no effect.
53.We wrote to Lord Freud following our visit, as this case emphasised to us the inadequacy of DHPs as mitigation for the Benefit Cap in these circumstances. We asked whether the Government could provide information on the number of households in this situation, and whether it would consider exempting them from the Benefit Cap because they have no reasonable remedy available to avoid the effects—they cannot work and they cannot move home. The Minister’s reply did not include the requested data and he did not address the question of a possible Benefit Cap exemption. He told us that he would relay our concerns to “officials who have regular dialogues with local authorities to ensure that DHPs are working effectively.”
54.It was not the Government’s intention that the removal of the social sector spare room subsidy or the Benefit Cap should penalise disabled people and their carers. We believe that, in cases where these people cannot reasonably be expected to work or earn more, or be helped to move to cheaper accommodation, they must either be suitably protected from unintended effects by DHPs or exempted from the reforms.
55.We recommend that the Government put on to a statutory footing guidance which makes clear that local authorities must not take into account DLA/PIP awards in their calculations of applicants’ income in relation to DHP award decisions without also taking into account the extra costs incurred by the applicant as a result of their disability. The guidance must also prohibit local authorities from requiring DHP applicants to demonstrate that they have actively sought to move to cheaper accommodation in cases where the applicant in question is disabled and lives in a specially adapted home.
56.We recommend that parents or guardians who care full-time for their adult disabled children, who are in receipt of DLA/PIP and consequently not considered part of the same household for DWP benefit purposes, be exempted from the Benefit Cap. We further recommend that the DWP conduct research—to be completed within six months—into the characteristics of people affected by the Benefit Cap and the removal of the spare room subsidy whose options to remedy the effects—i.e. working more or moving home—are severely limited. It was not the Government’s intention to affect such people and time-limited DHPs are clearly inadequate to protect them.
57.Witnesses emphasised the risk that women fleeing domestic violence, and other geographically mobile people such as gypsies and travellers, people leaving care and prison leavers, could be excluded from discretionary support by “local connection” or residency criteria put in place by a number of councils. The Child Poverty Action Group noted that a two-year local residency criterion applied by Sandwell Metropolitan Borough Council in relation to its Council Tax support scheme had been ruled unlawful, but that there was no such legal restriction on local connection rules for local welfare assistance schemes.
58.While the risk of particular groups being excluded from support by local connection criteria was widely emphasised, we heard relatively few examples of this happening in practice. The Riverside Group Ltd, a charitable sector housing association, reported that:
In one authority area, a tenant who had fled domestic violence with a young child was receiving support from our services. They moved into a flat with no appliances or furniture […]. An application was put in to support with this but she was advised she did not qualify for assistance as she didn’t fit the very rigid scheme criteria. If she had been in a different geographical area and local authority she would have received support.
59.Conversely, several local authorities reported that they exempted women fleeing domestic violence and other geographically mobile groups from their local connection and residency criteria. Some gave examples in which their schemes had assisted such people. Lancashire’s Care and Urgent Need Support Scheme, a partnership of the County Council and nine social enterprises, reported that fleeing domestic violence was one of the main crisis situations leading to referral, making up nearly 15% of its cases. London Councils gave a specific example, from Lambeth, of a council helping a woman arriving from a different area:
Claimant from traveller background fled husband and family due to domestic violence, leaving clothing and possessions behind. Continues to suffer from threats and abuse from family. Offered a permanent home in a new area meaning that she is far away from the abuse she suffered and at less risk of domestic violence. Local welfare provision enabled new home to be furnished with essential appliances and a basic wardrobe to be bought. Claimant is now settled in her new home and not constantly making anxious calls to law enforcement agencies.
60.We are concerned that, in local welfare assistance schemes, local connection and residency criteria have the potential to exclude vulnerable people such as those fleeing domestic violence. While many councils provide effective support to people in these situations, the risk remains that people in acute need could be unfairly excluded.
61.We recommend that the DCLG and the LGA issue joint guidance on acceptable use of local connection and residency criteria in local welfare assistance scheme criteria. This guidance should recommend exemptions in certain crisis situations, including for people fleeing domestic violence, and for members of geographically mobile groups, such as gypsies and travellers, people leaving institutional care and prison leavers facing financial emergencies.
62.Local welfare assistance schemes tend to offer in-kind support to people in crisis, including food, clothing, and white goods, or vouchers to buy particular types of goods, rather than cash. This was one of the policy intentions of the abolition of the DWP’s discretionary Social Fund; the Government believed that the provision of in-kind support would reduce the risk of abuse of the system. Several local authorities told us that they offered cash support only in exceptional circumstances and others said that their scheme offered goods and services only.
63.Some witnesses, however, were concerned about blanket bans on cash support. The Association of Charitable Organisations told us that cash had the flexibility to immediately alleviate hardship, and was therefore often necessary. David Holmes CBE, Chief Executive of the charity Family Action, told us that cash support was often preferable for “a number of very practical reasons” and, most notably, enabled people to “shop around and get best value for money.” Furthermore, he believed there were psychological benefits in awarding cash in some circumstances; for example, it boosted a sense of independence in women whose autonomy had been diminished by domestic abuse.
64.We recommend that the DCLG and the LGA jointly publish guidance that cash payments can be practical and necessary in many circumstances, and promote self-sufficiency in line with the Government’s broader aims for national welfare policy, and should not be ruled out in the design of local welfare assistance schemes.
65.Witnesses believed that restrictive criteria of the types discussed above have arisen to a large extent because of budgetary pressures. We consider issues of funding in the next chapter.
47 See DWP, Local welfare provision review, November 2014 and LGA, Delivering local welfare: How councils are meeting local crisis and community care needs, September 2014
48 New Policy Institute ()
50 Giles Peaker (); Child Poverty Action Group (); Crisis ()
51 Giles Peaker ()
53 Giles Peaker ()
54 Giles Peaker (); See also, Contact a Family ()
55 R v. Sandwell Metropolitan Borough Council, ex parte Hardy. See DWP, Discretionary Housing Payments: Guidance Manual Including Local Authority Good Practice Guide, August 2015, para 3.9
56 See Work and Pensions Committee, Seventh Report of Session 2010–12, Government support towards the additional living costs of working–age disabled people, HC 1493
58 , 23 November 2015
59 Child Poverty Action Group ()
60 The Riverside Group Ltd ()
61 Southampton Local Welfare Provision Working Group (); London Borough of Lambeth, cited by London Councils (); Association of Charitable Organisations ()
62 Lancashire Community Recycling Network and Global Renewables Lancashire ()
63 London Councils ()
65 Lancashire Community Recycling Network and Global Renewables Lancashire (); Mid-Devon District Council (); Hertfordshire Welfare Assistance Scheme, cited in Furniture Re-use Network ()
66 Association of Charitable Organisations ()
68 See, for example, Jed Meers (); Z2K (); Child Poverty Action Group ()
Prepared 11 January 2016