Spending Review – further clarity on plans to limit rents in the social rented sector to Local Housing Allowance rates

Friday, 27 November 2015 - 1:14pm

A number of agencies have contacted Homeless Link since the Spending Review announcement on 25th November, asking if we have any more information on the proposed restriction of social housing rates of Housing Benefit to Local Housing Allowance levels and whether this applies to hostels and supported housing.

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

  1. Although the new rules will apply to affected individuals who sign their tenancy from April 2016 onwards, they will be entitled to full Housing Benefit until April 2018.
  2. Supported housing is covered by the new rules
  3. The Government are committed to exempting supported housing from the new rules by increasing Discretionary Housing Payment (DHP) to local authorities.

As Universal Credit rolls-out Lord Freud has expressed a desire to find a “localised” solution to the funding of supported housing so this announcement needs to be seen in that context. Ministers are still working out the best approach to the funding of rents in supported housing in the context of Housing Benefit being phased-out. This is also tied to the review of the rental costs in supported housing which has been commissioned by Government and is due to report in 2016.

Obviously, there are numerous concerns which will follow from this change and we will be raising these in discussions with Government. Especially whether DHP can realistically be seen as a way of exempting supported housing.

We are also aware of the wider concerns of the policy, especially on young people, and in relation to the wider application of the Shared Accommodation Rate in the social sector, which go beyond the supported housing issue and we will also be taking those concerns forward.