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DWP and council both refusing housing benefit for equity-linked ‘supported’ homes
A supported housing association linked to private equity investors faces rents on some of its homes going unpaid – as both central and local government deny responsibility for covering the tenants’ benefits.
Gloucester City Council is understood to be refusing to continue paying the higher rates of housing benefit usually reserved for supported housing for some properties managed by Westmoreland Supported Housing Association.
This is because it believes the provider is not providing any care and support to residents of these homes, meaning it cannot justify paying housing benefit at supported housing rates, a claim Westmoreland denies.
The tenants therefore require Universal Credit to cover housing costs, but the Department for Work and Pensions (DWP) has also declined to pay, saying the costs should be met through housing benefit.
This would leave the rent unpaid, potentially posing a cashflow problem to the organisation which must make rental payments itself to the fund from which it leases the home.
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Westmoreland’s business model is based on leasing homes from private investors and making payments to them from its housing benefit income. It is obliged to continue making these payments, whether or not it can recover the rent from tenants.
The homes at the centre of the dispute are leased to Westmoreland by Henley Social Investments, a private fund which pays an undisclosed return to investors.
It is not known how many, if any, of the organisation’s other 1,378 homes leased from a variety of funds across 107 local authorities are affected.
Gloucester is also seeking to recover previous payments made to pay for care that it says was not provided despite being funded through benefits.
The dispute over rents was revealed in emails to a resident – seen by Inside Housing – regarding the arrangements for payment of their rent and confirming Gloucester will no longer cover the housing benefit.
The email describes the problem and urges the resident, who is in need of care and support, to contact Universal Credit themselves to resolve the issue.
Inside Housing has spoken to the resident, who confirmed that no one is currently paying their rent, adding: “Westmoreland want the monies to go direct to them, however a Universal Credit advisor has told me that it is not possible and the money has to be paid through my benefit payments.”
DWP and Westmoreland declined to comment.
