The proposed extension of LHA to supported housing providers

Thursday, 17 December 2015 - 3:45pm

Sitra and Homeless Link's joint briefing on the proposed extension of Local Housing Allowance to social housing providers – including supported housing.

In the Comprehensive Spending Review the Government outlined their plans to extend Local Housing Allowance to social landlords.  Local Housing Allowance (LHA) is the method by which local authorities identify how much housing benefit a claimant is entitled to, that supports them in paying the rent/accommodation charge and eligible service charge.  Currently social housing providers are excluded from LHA which is set at the 30 percentile on a list of rent in a locality. LHA is intended to cover any costs associated with renting a property – ie core rent and eligible service charges.

What we know about extending LHAs to social landlords

There are three key things which have been confirmed by Government officials and which we hope will help in understanding what is set out in the Spending Review.

The new rules will apply to affected individuals who sign their tenancy from April 2016 onwards, although the LHA rate of Housing Benefit entitlement will not apply until 2018.

  • Supported housing is covered by the new rules
  • The Government has said they are committed to protecting supported housing, although the mechanism for how that will happen is not yet known. The Spending Review talks about Additional Discretionary Housing Payments (DHP) being made available for this purpose 

What we don’t know about extending LHA to social landlords

The lack of detail means it is hard to envisage how this will impact on the supported housing sector. Some of the questions being asked by agencies include:

  • How does 'social landlord' defined in the comprehensive spending review indicate anything that is not private?
  • What definition of ‘supported housing’ will attract a level of protection?
  • How will the research on supported housing funding currently being conducted by Ipsos Mori impact on these proposals?
  • How will any additional DHP allocation be calculated and will any additional funding be ring-fenced for supported housing, or included in the overall allocation for the authority to determine its own priorities?
  • Will any extension recognise the particular challenges applying to under 35s who are covered by the Shared Accommodation Rate?

 There has been concern amongst providers that the main model of Universal Credit (UC) would not work for much of supported housing. Reasons include direct payment to tenants alongside the monthly assessment and payment model. As UC rolls-out Lord Freud has expressed a desire to find a “localised” solution to the funding of supported housing, so this announcement should be seen in that context. Ministers are still working out the best approach to the funding the cost of accommodation in supported housing in the context of Housing Benefit being phased-out.

There are numerous concerns on the viability of supported housing, which will follow from this change and we will be raising these in discussions with Government, in particular, whether discretionary housing benefit can realistically be seen as a way of exempting supported housing.

What next?

Sitra and Homeless Link will be working with members to pull together evidence on the overall impact on the sector – please look out for information in the new year about this. We will continue to lobby Government for the proposals to be amended and the disproportionate impact on supported housing to be recognised. Please do not hesitate to contact us if you have any questions in relation to this briefing to burcub@sitra.org or paul.anderson@homelesslink.org.uk.

This briefing does not constitute legal advice.  We recommend that you seek the advice of an appropriately qualified legal practitioner if you need legal advice.