Sunday, 01 March 2015

Demand for hardship fund surges

Councils across England have reported a huge surge in applications for help from an emergency hardship fund since the launch of the bedroom tax on 1 April.

Several local authorities have experienced a sharp increase in the number of tenants applying for discretionary housing payments to help pay their rent.

Hull, Leicester and Southwark councils all received at least five times as many applications as they would normally receive in a month, while Waltham Forest Council’s average monthly figure jumped from 72 to 226. Leeds Council has received 1,256 applications compared with 226 last April, while Sefton Council has had a nine-fold increase, receiving 321 applications since 1 April. Southampton Council had 295 applications compared with 75 in April 2012. Birmingham Council received 2,000 applications for DHPs in the first two weeks of April – 50 per cent more than the figure for the whole of the first quarter of the 2012/13 financial year.

The rise in demand for the £155 million DHP fund is the first quantifiable sign that the bedroom tax is making it harder for tenants to meet living costs.

Ian Wingfield, cabinet member for housing management at Southwark Council, said: ‘We’re encouraging people to come forward quickly, but we think we will have a shortfall [in DHP] because we have a high number of disabled and vulnerable people.’

The government has increased its DHP pot from £60 million in 2012/13 to £155 million this year. But the early increase in applications will raise fears that the £155 million will be insufficient to help those hit hardest by the penalty.

Mr Wingfield, said Southwark Council, which has received more than £1 million to fund DHPs, expects applications to increase further. This is because some people affected only applied after their first reduced benefit payment.

A Department for Work and Pensions spokesperson said: ‘DHPs are something we will keep an eye on to make sure they go to people who need them.’ He added that he does not expect the rise in applications since 1 April ‘to be replicated across the year’.

Under the bedroom tax, working-age social tenants with spare bedrooms have their benefit cut.

South Yorkshire Housing Association revealed this week that half its estimated 700 households hit by the bedroom tax have underpaid their rent by an average of £60 this month. This could renew fears about the bedroom tax’s impact on landlords’ income if tenants are unable to cover the average £14-a-week benefit cut.

Readers' comments (18)

  • Ernie Gray

    So, the best kept secret is out. The impact of welfare reform and the level of resources set aside for the hardship fund are going to create major issues for local authorities. The choice will have to be made in the not too distant future between increasing the level of hardship fund or reducing services.

    Central government will dress this up as a local decision making process and will also make the point that they did provide resources for this, however as I think most of us know, those resources were insufficient.

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  • Joe Halewood

    Interesting that Sefton is mentioned.

    I have had numerous reported cases in which Sefton refuse to give out their standard form for appealing the bedroom tax and instead give out a DHP form

    The £155m fund? Oh come on can we have some accurate and especially contextual reporting please!

    The S1 of 2013 HB subsidy circular firstly says it is £150m not £155m

    Of this just £25m is allocated for bedroom tax cases the rest is for benefit cap cases and for general cases and will see circa 68% of the DHP budget go to the private tenant not the social tenant - please look at paragraphs 2 and 3 especially is a link to some detailed and accurate comment on this.

    You may also want to dig really deep into the last parliamentary accounts committee (PAC) reports which reveals (I am sure inadvertantly by the Whitehall manadarin) that DHPs are allocated to local councils on the basis to cover just 6% of need - meaning about 15 out of every 16 that apply will not get a DHP

    The same S1 of 2013 has allocations by each council.

    The comment from the DWP above "...he does not expect the rise in applications since 1 April ‘to be replicated across the year’." Is because the DHP budget will have been used up as 6% means if everyone needing a DHP was given one then the DHP budget would run out in just over three weeks!!

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  • Chris

    And already benefit processing in even the less poverty striken boroughs has fallen from 2-weeks to 7-weeks and the bottom is not even in sight.

    Still, good news for some of the many redundant council staff who may now have to be re-employed on expensive temporary contracts, and of course for the Post Office as well!

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  • Rick Campbell

    The fund available is simply not enough -- I dread to think of the ultimate effects the increasing hardship will have on folk.

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  • Sooner or later this will spill onto the streets This is causing huge rifts between landlords and tenets .
    Being made homeless is a very scary thing specially when your ill.There is a lot of tension about.

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  • Jon Southall

    If this is evidence of the impact of the bedroom tax, then it is also evidence of significant under-occupation.

    When people realize it's in their interests to downsize, their former homes will be allocated to people who will make full use of them. There are a lot of people waiting to make full use of social housing too - and logic would dictate this group is even bigger than the group affected by the bedroom tax currently.

    From a utilitarian perspective, it would seem that this policy serves the greater good.

    It is time for people to stop hoarding spare rooms in social housing. It comes at a cost to the taxpayer, it comes at a cost to larger households who are waiting for an affordable home.

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  • Ian Duncan smith caught out lying but people on benefits new this since he opened his mouth .8,000 people suppose to of moved into work because of cuts or welfare reform .
    The truth is tories think benefits are to generous so generous people don't want to work.Lies,lies,lies and this country is more of a mess with policies not thought through enough.Just like our nhs now with A&E in an upheaval .Bedroom tax is next,people are not coping and I keep saying it but it will spill onto our streets anytime soon.

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  • Joe Halewood

    Jono - Utilitarian theory and all my a**e frankly! Go to paragraph 61 of the Bedroom Tax impact assessment of June 2012

    Estimates from the English Housing Survey on overcrowding and under occupation produce the estimates in the table shown below. These figures are based upon the ‘bedroom standard’ rather than the size criteria applied in Housing Benefit.
    At Standard
    Under occupied
    Social Rented Sector
    Private Rented Sector
    Owner Occupiers

    More overcrowded in social housing than private and owner occupied

    Less under occupancy in social housing than in private and owner occupied

    The bedroom tax theory just like your warped utilitarian view is a figment of the imagination

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  • Chris

    Jono - theoretical universes are great for debating circles, but do little for the real world.

    Where do you propose the hoardes of social tenants burdening the taxpayer by hoarding spare rooms move to?

    Are you ignoring the FACT that these tenants are taxpayers, the FACT that there are not the alternative homes available, or where they are they are in FACT dearer than where those tenants currently live, or even the FACT that the government's own policy assessment assumes significant benefit savings because there is no where for people to move to?

    Can we have the more balanced Jono back please!

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  • Jon Southall

    Joe - 40% of social housing is underoccupied, per the figures given. If this is reduced nearer to 0%, someone of your intelligence can see how this would increase the reach of social housing assets, to serve more who are in need than are served now.

    Isn't that the goal of most social housing providers? The bedroom tax is doing RPs a favour. They can blame the gov for tackling an issue they have not the conviction to tackle themselves.

    BTW the 'tax' will affect some in private rented. Maybe even shared owners too, but I know less about that.

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