Friday, 27 February 2015

Capital gets largest slice of benefit fund

London councils will receive the lion’s share of a fund to help struggling housing benefit claimants pay their rent, the welfare reform minister said today.

Lord Freud announced regional allocations of the first tranche of the £130 million discretionary housing payment. The fund is designed to help claimants find a new property if the government’s cuts to their benefit mean they can no longer afford their current home.

Councils in London will receive £8 million out of the £30 million allocation announced today. The Department for Work and Pensions has calculated that the capital will be worst hit by the cuts, which include caps on the amount of housing benefit that will be paid per bedroom, and a move from paying housing benefit based on the median of local rents to 30 per cent of rents instead.

Local authorities in Scotland will receive £2.5 million, with £1.5 million going to Wales and £17.5 million for the rest of England. The remaining funding will be allocated over the next four years.

MPs and housing organisations have warned the housing benefit cuts, announced in June’s emergency Budget and the comprehensive spending review in October, will increase homelessness.

Speaking at the British Property Federation’s conference in London, Lord Freud hit out at critics of the cuts. He said: ‘It is wrong for anyone to suggest that many people will become homeless because of our housing reforms – the discretionary housing payments are there to provide a safety net for those who need it.’

London Assembly member Jenny Jones, who is deputy chair of the assembly’s planning and housing committee, said the £8 million is not enough.

‘We need five times as much for people forced to suffer their steep rents with less help following the cuts,’ she said. ‘The mayor’s experts say families alone need £29 million.’

Discretionary housing payment allocations

  • East midlands £1,270,098
  • Eastern £2,203,059
  • Greater London £4,159,705
  • Inner London £4,021,349
  • North east £866,262
  • North west £2,986,408
  • Scotland £2,676,839
  • South east £3,797,937
  • South west £2,236,504
  • Wales £1,422,995
  • West midlands £2,345,663
  • Yorks and Humberside £2,013,181

Readers' comments (6)

  • Chris Webb

    And the cuts will save how much exactly, after the rushed in sticking plaster above is taken into account?

    All that was needed was to deal with the problem at source - regulate the rents, preventing the excessive charges requiring so much benefit to top up the miserly wages paid by the companies of the UK. Instead the subsidisation of private landlords continues whilst housing policy is brought into place to ghettoise the poor and cleanse the New Tory too-good-for-you housing zones.

    The social cost, let alone the physical cost indicated, is not a price worth paying.

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  • Afzal Shabir

    Personally, I can't see the discretionary fund making too much difference in London and the South East. Obviously it is better than nothing, but the benefit reduction rate will do little to offset the cost of those burgeoning mortgages taken out during the 'good old days' which many are finding difficult to pay the interest on let alone the capital.
    Many private sector rents are tied into the rate at which a landlord can repay a mortgage back on, so I guess many buy to let investors will be looking for buyers pretty damn quick - shame there aren't as many loan products on offer to help these poor sods from being liquidated...

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  • So the capital with 16% of the nationa HB claims gets 27% of the funding...well knock me down with a feather!!!

    IH - So why no comments from all the other regions on whether they feel their allocation is enough? Silly me i forgot the whole housing sector revolves around the capital!!!

    Lord Freud's disingenuous comments as to homelessness of course need no comment from anyone! David Anthony Freud Tory - DAFT? How Apt!

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  • abner arrow

    Sorry guys, I am a bit lost on this one,

    Is this fund allocated for sending people from London to Luton? I assume the cost of second class one way family train ticket, is also included, is this correct?

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  • I am still awaiting an answer on quite where my families with 6/7/8 kids are going to live, or how do we choose which ones to put into care?
    So, they can claim PHP for a bit, then what?
    LHA currently covers the full rent, but it wont in the future.

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  • Ignoring social issues for a moment, it will be essential to keep track of all costs and benefits associated with this big change (including dicrectionary housing funds) so that in two years time, it can be clearly seen if it worked or not.

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