The government’s decision to slash the discretionary housing payments (DHP) budget by £40m in 2015-16 could mean many of our most vulnerable residents are unable to cover their basic living costs and some may face eviction as a result.
The council-run hardship fund is to be cut from £165m this year to £125m in 2015-16. The fund is a valuable source of financial support for some of the country’s most vulnerable social housing residents, especially those affected by the under occupancy charge, or bedroom tax. It’s often the only thing that enables them to remain in their own homes.
We have one resident in London who is severely disabled and on disability living allowance (DLA). He is simply not in a position to work. But he also can’t downsize. His teenage daughter visits him every weekend and he has a specially adapted home, something that is hard to acquire. He has a frugal lifestyle, but his limited income makes it impossible for him to make up the difference in his rent as a result of the under occupancy charge. Last November, his application for DHP was rejected.
Social landlords recognise and support the government’s aims to bring down the deficit and incentivise benefit claimants to return to work. But we also need to ensure that the system supports the most vulnerable in society, for whom finding work or downsizing may not be possible.
According to the Department for Work and Pensions, about 500,000 claimants, many of them social housing tenants, are affected by the bedroom tax. More than 1,800 of our 50,000 households are affected and we, like other social landlords, have put a huge amount of effort into supporting them. Most large housing associations, like us, have services to assist residents manage their money, get into work, or increase their skills. Assisting people to find a job with the help of dedicated employment advisers has proved to be one of the best solutions for those affected by the first wave of welfare reforms.
We’ve worked with most of the people affected, to support them find jobs or consider options for moving. When those options aren’t viable, we’ve used our own skills to help people submit strong applications for DHP. For the first 18 months after the tax was introduced, many of these applications were successful and in most cases, DHP was awarded.
But this is begnning to change. Residents are increasingly having applications rejected because of a lack of local authority funds. There are very real concerns about the cuts to DHP. Our research shows that while some people have moved, or found work, many are simply not in a position to move or find ways to pay the difference. This may be because they require additional space due to illness or disability, or simply because suitable alternative accommodation is not available to house them. And finding a job is simply not an option for some because of illness or caring responsibilities.
So far, we have avoided needing to evict anyone with arrears solely due to the bedroom tax. We have excellent working relationships with our local authority partners and know that they are doing their best in difficult circumstances.
But we worry about the future. Until now, DHP has offset the full impact of welfare reforms such as the bedroom tax on the most vulnerable. But cutting the DHP budget could place some of our most vulnerable residents under increased financial strain.
The take-up of DHP in 2014-15 varied between local authorities and some have not used their full allocation. It is on this basis that the Department for Communities and Local Government (DCLG) has reduced the overall settlement.
But the department should also take notice that a similar number of local authorities, including many of those with which we work, have used their entire DHP allocation and will be unable to meet demand under the new settlement.
The DCLG should consider continuing the process used this year, enabling local authorities to apply for additional funds during the year when needed, and ensure unspent funds are re-distributed to the areas with highest demand.
Apart from the reducing pot, there is inconsistency in the way that DHP is awarded between local authorities. Our experience working across nearly 70 local authority areas shows a significant difference in how much is awarded, and to whom. It is apparent that payments do not necessarily go to those whose life circumstances render them most in need. We’d like to see more stringent guidelines to ensure a consistent approach between local authorities, and, most importantly, that the most vulnerable customers – those unable to move or increase their income – continue to receive sufficient DHP to maintain their tenancies.
Next month, we will publish the results of our two years of research on the impact of welfare reform on our residents. This will form the basis of our recommendations and further discussion with central government and our local authority partners.
Sarah Thurman is director of Hyde Plus, Hyde group’s social investment team
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