Wednesday, 3 February 2016

The Sword of Damocles

The Government recently exempted Almshouses (and all supported/sheltered housing) from the rent reduction for the first year 2016.

As an Almshouse, this is welcome news for Durham Aged Mineworkers’ Homes Association, and many others but there is still a sword of Damocles hanging over all our heads – in the form of a proposed cap on housing benefit.

From April 2017 the Government is proposing to make housing benefit payable on housing association properties to the same level as people in privately rented homes, known as the Local Housing Allowance.

This will make a massive difference to supported housing schemes where weekly housing benefit-allowable costs are often £20-£30 or more higher than the LHA, and also generally in Durham County where the typical one-bedroom LHA rate is only £75/week compared to the rent of our new bungalows of £106/week.

If this does happen it will have a major impact on the social housing sector. According to the National Housing Federation, this change would hit vulnerable people by an average of £68 a week and at least 82,000 homes for these groups would be forced to closed.

Restricting the housing benefit of those least able to source any additional income makes absolutely no sense and threatens the provision of this much needed specialist housing, just as the number of older people in our region is rapidly increasing.  The impact of a lack of appropriate housing for older people on the NHS is well publicised, and this funding cut therefore appears to be one that will rapidly end up actually costing the taxpayer more.

A typical example would be a new 2-bedroom bungalow, offered at £106 per week “affordable rent” (a rent set under HCA guidelines from 2012) being restricted to LHA rent of £86.30 per week, or potentially even only £74.79 per week if the “single room” rate restriction was extended to older people as it may well be.

Clearly most pensioners entitled to full housing benefit could not find an extra £30 or £40 per week to top up their housing benefit shortfall, and so would risk falling into arrears, with all the adverse problems that would entail.  Of course, it also means that any investment in future rented properties for older people makes no real financial sense.

Capping housing benefit for vulnerable and older people not only means that future investment cannot take place as the limited income will not be available to sustain any sort of meaningful investment in specialist housing, but also threatens the continued existence of what provision already exists and so appears to be highly irresponsible.

We therefore join with the NHF in urging the Government to think again and announce now that the LHA cap does not apply to supported and sheltered housing and that they will work with the sector to develop a long term sustainable funding model for supported housing.

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