Budget round-up 2017

Monday, 27 November 2017 - 11:43am

Following the Chancellor’s 2017 Autumn Budget on 22nd November, Homeless Link has pulled together a summary of the key announcements relevant to the sector. 

Hand holding a five pound note

We were pleased to see some of the recommendations from our Budget submission announced by the Chancellor, although in many cases we hoped the announcements would go further. We will continue to campaign for greater investment across Government to prevent and address homelessness. 

Homelessness

The Chancellor reiterated a number of the government’s manifesto commitments around homelessness as part of his Budget speech. This included the commitment to halve rough sleeping by 2022 and eliminate it by 2027, alongside establishing the Homelessness Reduction Taskforce. This Taskforce, which has not yet launched, will work to develop a cross-government strategy to achieve these commitments. We will continue to make the call that this strategy must be adequately resourced and that a co-ordinated and strategic approach should be taken to funding homelessness prevention and relief.

In our Budget submission, we called for investment to support the rollout of Housing First, particularly capital investment and revenue funding for support. While we welcome the £28 million for the three Housing First pilots in Manchester, Liverpool and the West Midlands, we are disappointed that the opportunity for wider investment was not taken, given the strong evidence that already exists for the efficacy of Housing First for people with multiple and complex needs. It is important that piloting does not lead to a cliff-edge in funding once the pilots end; leaving people without access to the support they need.

Welfare

We know from our members that Universal Credit (UC) is one of the key challenges facing their services and the people they support. The Budget and subsequently the Secretary of State for Work and Pensions announced a number of changes that will be brought in next year:

  • abolishing the seven waiting day period, therefore reducing the delay in receiving initial payment by one week (from February 2018)
  • reforming Advance payments so people can loan up to 100% of their initial payment, to be repaid over up to a 12 month period (from January 2018 with an option to apply online from Spring 2018)
  • where someone moves from Housing Benefit to Universal Credit, an additional two weeks’ of housing costs will be paid after the end of their Housing Benefit claim and into their Universal Credit claim. This does not have to be paid back. (April 2018)
  • direct payments of UC to landlords for people in temporary accommodation from April 2018 (short-term measure)
  • a slow-down in the rollout of Universal Credit until May 2018

In the short term, the Department for Work and Pensions (DWP) will work with the Citizens Advice Bureau to ensure more face-to-face support for UC claimants. Guidance will be issued next month to staff in Jobcentre Plus to improve the identification of people who would benefit from direct payments to landlords. Alongside Centrepoint, Shelter and St Mungo’s, we have called for the Alternative Payment Arrangements to be reformed, so that people experiencing homelessness can choose to have direct payments to landlords from the start of their claim and this is a positive step to enable this to happen in practice.   

It is also positive that people experiencing homelessness will no longer be subject to the ‘seven waiting days,’ which we asked for in our Budget submission. However, with many examples of people waiting more than 10 weeks for their initial payment, a lot of work still needs to be done to improve administration within DWP, including verification processes and ensuring IT facilities are available. Further reform to the design of UC, such as increasing the frequency of payments and not paying claimants in arrears, would help to reduce the delay in people receiving their first payment.

Advance payments have been introduced to mitigate the impact of this delay. Alongside our members, we also called for an increase in the level of advance payments and an extension of their repayment period to a minimum of 12 months. The changes announced are therefore welcome. However, as there were no announcements addressing the low level of benefit payments caused by the LHA cap, benefit freeze and removal of automatic entitlement for 18-21-year-olds, we remain concerned that even over an extended period, the repayment amount could have a significant impact on people’s income. We would like to see further assurances that deductions from people’s monthly payments will not leave people struggling to meet their living costs.

Private rented sector

The draft Bill on banning letting fees is currently going through Parliament and the Budget announced further measures to make the private rented sector more accessible and affordable. £20 million was committed to support people at risk of homelessness to access and sustain tenancies in the private rented sector. A consultation on the current barriers to landlords offering longer, more secure tenancies was also announced.

Local Housing Allowance (LHA) remains a key issue for people trying to access the private rented sector as the gap between LHA levels and the local rental market continues to grow. In our submission, we called for a reverse of the current LHA freeze and a commitment to review levels so that they reflect the reality of trying to rent a property locally. While the Budget did not go that far, it did announce an increase in Targeted Affordability Funding. This funding is designed to support people living in areas with the greatest discrepancy between rents and LHA levels, and this additional funding will increase the amount of housing benefit awarded by an average of £280 for 140,000 claimants living in the most unaffordable areas in 2018-19. While we are pleased to see support in place for people who are most struggling to afford their rent, this highlights once again that the LHA rate is not fit for purpose and needs to be reviewed.

Housing

The lack of truly affordable housing both contributes to homelessness and makes it difficult for people moving on from homelessness services. The Budget confirmed the £2billion funding for affordable housing, including social rented housing announced in October. The Budget also announced that councils in the most unaffordable areas will be able to bid for an increase in their current borrowing cap so they are able to build more council homes. We welcome these announcements but must reiterate the critical need for housing at genuinely sub-market rents and not the current definition of 80% of local market rates as affordable.

Health and social care

Although additional money was announced for the NHS, this has mainly been earmarked for relieving pressures on the NHS and helping it get back to meeting targets around A+E waiting times, for example. There was no mention of funding for mental health services, drug and alcohol services or social care. These are services that we know have a significant role in preventing homelessness and supporting people with multiple and complex needs to live independently. We are disappointed that the funding pressures these services face have not been addressed in the Budget. 

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Paula Reid

Paula Reid

Policy manager

Paula is policy manager at Homeless Link and leads on the Supported Housing Alliance.