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Government Announces LHA Cap Freeze

The Government has announced an exemption from the Local Housing Allowance (LHA) cap for those tenants living in hostels and supported housing but is proceeding with the 1% rent cut.  In a written statement to Parliament, the Work and Pensions Secretary, Damian Green, said that he would defer the imposition of the LHA cap on supported housing until 2019-20 after which a new system would keep funding at current levels.

The announcement follows deep concern from the housing sector, charities and third sector organisations who warned that if the cap were to apply to those living in hostels and supported housing, it would see the schemes providing support to these vulnerable groups become financially nonviable and at risk of closure.  One of the chief concerns raised by those organisations working with the homeless and the mentally ill was that the LHA cap would mean widespread closure of many hostels and shelters which could force thousands of people on to the streets.

The NHC’s own research and member engagement on this matter has found that many registered providers in the North froze development of new supported schemes after the announcement of the cap last year with nearly all plans for future schemes left in doubt. The Ministerial Statement on LHA Cap freeze outlines the broad structure of a replacement model which would see Local Authorities receive funding to ‘top up’ LHA – however, many questions remain. Whilst the LA fund is ‘ring fenced’ it is not clear how long this ring fence will last – or indeed how porous it turns out to be. Equally, the impact on sheltered schemes is not yet clear. The government will shortly issue a consultation paper and the NHC will respond to this.  For more information on LHA issues please contact Policy and Public Affairs Officer, Callum Smith at callum.smith@northern-consortium.org.uk

Regional Policy Network Round-up

The NHC as a membership body, facilitates three regional Policy Networks across the North East, North West and Yorkshire & Humberside. The North East Policy Network has been up and running for many years, and recently has grown and attracted interest from even more members across the north east.  The Yorkshire & Humber and North West Policy Networks are very new, and have met once to date with a second meeting for each scheduled in the next coming months.

The Policy Networks provide NHC members the opportunity to come together on a quarterly basis, at different member venues in each region to network and discuss policy developments and what they mean for each region, challenges and approaches to mitigate their impact on business, tenants and communities, and good practice.

Across the three networks there were shared concerns which included:

 

Universal Credit (UC) 

  • Huge concerns and challenges around inconsistency of messages from DWP/JCP
  • Organisations need to increase staff time and resources to manage the small number of current cases and time spent on each one. This will not be sustainable going forward as UC is fully implemented.
  • Concerns around the Full Digital Service and how this will be managed by each local JCP office. What about those who can’t access the service for various reasons? What support will be in place for them? Will this delay their claim/payment?
  • Relationship with local DWP Partnership Managers largely positive. However there are issues with the Service Centres – are the messages being communicated to the relevant colleagues there?

 

LHA Cap

  • Members are currently carrying out various impact analyses and modeling different scenarios.
  • Seen as a high business risk across the sector – high rise stock and supported housing poses the greatest risk to businesses.
  • Ways to mitigate the impact of the LHA cap include reviewing allocations and tenancy policies. What do these look like? The introduction of affordability checks and refusing tenants who are unable to afford it will cause problems.
  • The general view is that no-one really understands what the effect of the change will be and that the impact probably won’t be known until it actually happens. Often, tenants will only deal with financial changes when they actually hit, as was the case with the under occupation charge.

 

1% Rent Reduction 

  • Has had a huge impact on businesses. Many organsiations are experiencing staff cuts and restructures.
  • Many members are carrying out reviews of non-core and core services, looking at costs and benefits.
  • Developments are being stalled until a full review of business plans is carried out

 

Benefit Cap

  • Identifying tenants who will be impacted is a difficult process as the sector does not collect information on tenant income.
  • Some members are contacting those that were affected by the £26,000 cap and informing them of the up-to-date changes.
  • Some members are visiting households potentially impacted.

 

This is a summary of some of the discussions that have taken place to date across the networks, for further information on the regional policy networks, please visit http://www.northern-consortium.org.uk/services/policy/working-groups/