Monday, 02 March 2015

Authorities save £8 million as they prepare for the impact of benefit cuts

Councils stockpile benefits war chest

Councils are stockpiling money from a hardship fund that helps tenants hit by welfare reforms because they are expecting a huge jump in need next year.

Sixty-five per cent of 379 councils in Great Britain collectively squirrelled away almost £8 million of last year’s £30 million discretionary housing payments fund, figures obtained by consultancy Landlord Information Network show.

The stockpiling was sanctioned last year as a ‘one-off’ by the Department for Work and Pensions following an appeal by several authorities bracing themselves for an expected spike in demand as a result of welfare reforms such as the universal credit and the bedroom tax, which come into effect next year.

Westminster Council, which received the largest fund allocation of £1.1 million, spent just over a third of its budget last year.

‘Westminster has carried forward the underspend in full into 2012/13 when the majority of the impact of the housing benefit caps will be felt,’ a spokesperson for the authority said.

One in 10 councils spent less than half their budget, our analysis shows.

The figures emerged as the DWP said, for the first time it will monitor the way councils are using DHP after increasing the fund from £60 million a year to £165 million in 2013/14.

Guidance published last Friday said councils will be required to record the reason for DHP awards and submit returns to government twice a year.

Housing experts claimed this shows the government is concerned welfare reforms will increase homelessness. Sam Lister, policy and practice officer at the Chartered Institute of Housing, said: ‘Maybe [the government] want to cover their backs if homelessness shoots up, by pointing to councils which have not spent their allocations.’

Lord Richard Best, crossbench peer and president of the Local Government Association, said the move is positive as it means the government can identify struggling claimants and increase the DHP pot if necessary.

Joanna Till, partner at law firm Trowers & Hamlins, warned councils could face the threat of judicial review from claimants if they do not allocate DHP consistently.

Wellingborough, Fylde and Epping Forest councils, underspent their DHP budgets by more than 70 per cent, Inside Housing’s analysis shows.

The DWP said it would ‘work with [councils] to make the best use of this resource’. They added that monitoring will ensure help is given to those who most need it.

Readers' comments (15)

  • Rick Campbell

    " The DWP said it would ‘work with [councils] to make the best use of this resource’. They added that monitoring will ensure help is given to those who most need it. "

    No mention of a claw back by the government?

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  • The onlyproblem is that there aren't many people left in the Councils for the DWP to work with!

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  • I cannot see how this move is a sustainable one.

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  • Christopher Dale

    DHPs are a smokescreen. The hardship claimants will face can only be relieved temporarily by a DHP as they are awarded for a limited period of time, usually a few weeks. Claimants with ongoing shortfalls in the rent will not be able to rely on DHPs to see them through in the long term as they are expected to look for cheaper accommodation which we all know isn't there in sufficient quantities or quality.

    The pot will not be able to assist all those who face hardship due to rent shortfalls due to rising rents, stagnant wages or benefit reductions. The Government have cynically promoted the increase in the DHP pot in an attempt to divert the criticisms they will face as evictions and rent arrears increase.

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  • Peter Wicks

    "Never in our history have so many, been so decimated, by so few"...even Churchill would be ashamed of the depth and low calibre of what Eaton has produced in his Britain and he would be deeply ashamed of the detritus that calls itself "The Coalition" government and he would campaign most vigorously to have Eton pulled down,brick by foul brick to rid his beloved country of this evil college of education that has produced the likes of Cameron and Osborne...

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  • Iron Fist. An even more cynical is the presentation of the "squirrelling" as some sort of welfare initiative by local authorities. Does IH really have to buy that line complete with squirrel sitting on nuts, for Christs' sake?

    The animal which should figure as metaphor is the weasel which the lawyer at Trowers & Hamblin inadvertently referred to but was far too grand to use.

    LAs had responsibilities, and money, but used "discretionary" as an excuse for doing nothing and when caught out have offered an explanation, or weaselled, that they were all the time acting in the public interest. Were they heck?

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  • The con dems are punishing 670,000 council tenants with a
    £ 1 Billion per annum penalty for living in their existing homes ,
    as they are cutting housing benefit by £490 million per annum and
    they are also cutting council tax benefit by £500 million per annum,
    meaning these tenants are faced with having to pay this shortfall
    out of their other benefits which are also being cut !
    This equates to about £20 million per week for council tenants
    to find , as well as the shortfall placed upon private tenants , which
    means any short term assistance will only last about 6 weeks !

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  • If the proffessionals put up with this madness then let it continue.

    Surely there are some courageous people out there.

    One whistleblower is all it takes.

    Pumping up DHP to offset cuts - that isn't what the Daily Mail readers voted for.

    Lets get the info out there - the 'cuts' will hurt and they won't save anything - pointless.

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  • it would be better spent on making sure benefit receipients know the benefits gravey train is coming to an end. the country can no longer spend £20 for every £15 it takes in taxes, just to keep benefit people in the style of living they can not afford.
    the new level is far too high at a equivalent level of £35.000 a year pre tax income.
    the aim should be to set it at 85% of the basic wage for each adult and a small sum in child allowance for the first child only.
    the difference between working and benefits should always be such that 100% of people would ALWAYS choose work.

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  • I wonder where people get this idea from that those who are on benefits are living off the fat from the land. This belief is entirely wrong. In fact I have just watched a programme about the growing number of food banks in the uk simply because families on low incomes and those on benefits can't afford to buy a complete weekly shop and pay bills to keep a roof over their heads. As someone who volunteered in a school some time ago the number of school breakfast clubs are also increasing as parents from low income families and those on benefits can not afford to send their children to school with a breakfast on their stomachs.

    Ironically one of the cases highlighted in the programme on TV tonight was a young mother looking after two young children whilst her husband was training in the army. So this womans husband was training to represent Queen and country and yet on whatever salary he had for that she could not manage to feed herself aswell as the children and pay the bills at the same time.

    Strange that Britain is such a wealthy country yet we can't afford the basics.

    I do believe that 100% of people would choose work if work was available for a decent living wage. However, the reality is that there is a growing percentage of people in Britain who can't work because of ill health or they have restricted areas of work because the nature of the work would be bad for their health. For example expecting an acute asthmatic hayfever sufferer to work in the fields or parks and gardens could kill them.

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