Thursday, 30 July 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.

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