Wednesday, 29 July 2015

Authorities fear £150m discretionary housing payment fund is too small

Applications to hardship fund surge by 300%

English councils received more than 13,272 extra applications for an emergency hardship fund in the first month of the bedroom tax.

Inside Housing revealed in May that several councils have experienced sharp increases in applications from tenants for discretionary housing payments to help them pay their rent. Now an exclusive survey of 102 English councils lays bare the full extent of this surge in demand for help.

Councils received 17,673 applications in April, compared with 4,401 in April 2012 - a whopping fourfold (302 per cent) increase.

The figures, obtained under the Freedom of Information Act, are likely to renew fears that the £150 million DHP pot will not be enough to help people worst affected by the under-occupation penalty and wider welfare reforms.

DHPs are short-term payments to help people with their housing costs. The Department for Work and Pensions increased the DHP pot from £60 million 2012/13 to £150 million in 2013/14, and suggested councils use £25 million for people hit by the bedroom tax who live in significantly adapted properties.

Wakefield Council received 1,472 applications in April compared with just 99 in the same month last year (see table). Its 2013/14 DHP allocation - the bulk of which is likely to be used for households hit by other benefit caps - is £644,505.

Kevin Dodd, chief executive of Wakefield and District Housing, said: ‘WDH has seen over 1,500 of our tenants apply for DHP, which oversubscribes the council budget if all applicants were successful.’

The most applications were received by Birmingham Council, with an increase of 2,105 on April 2012. The council has already spent £400,000 of the £716,000 the DWP suggests it set aside for the bedroom tax from its £3.77 million DHP allocation in 2013/14.

The council is so concerned that on Monday its cabinet is expected to approve plans to create a £2 million fund to boost DHP payments in its housing revenue account, subject to approval from the Communities and Local Government department.

‘It is clear the allocation of DHP funding will not be adequate to provide sufficient assistance to tenants,’ the cabinet report stated.

Manchester Council, where applications increased from 123 to 718, has already spent £620,000 of its £1.92 million DHP budget for 2013/14.

The largest percentage increase (1,471 per cent) was in Telford and Wrekin, which received 220 applications compared with just 14 in April 2012.

Just two councils reported a decrease in DHP applications. These were Stratford-upon-Avon and Tewkesbury, which had a reduction of 15 and one application respectively.

The survey also revealed a 21 per cent increase in the number of households approaching councils to question their housing benefit awards. Councils received a total of 2,231 objections to benefit decisions in April,
compared with 1,847 in April 2012.

Discretionary housing payment applications

Local
authority
DHP applications in April 2013DHP applications April 2012Percentage increase
MOST APPLICATIONS   
Birmingham2,601496424
Wakefield1,472991,387
Manchester718123484
Cornwall579106446
Bradford543154253
HIGHEST PERCENTAGE INCREASE   
Telford & Wrekin220141,471
Mansfield10871,443
Wakefield1,472991,387
North Lincolnshire155121,192
Sunderland260221,082

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