Government confirms 12 month postponement of plans to cap supported housing rents at LHA levels

2 Mar 2016 01:22 PM

Many of our members sent us evidence to show that these caps would have been disastrous for homelessness services, with organisations calculating an average 68% loss of income.

A month ago, the Government announced a year long exception for all supported accommodation from its proposed 1% reduction on social housing rents. This morning, they made the following announcement of a similar pause in their plans around the proposed LHA cap.

“In the Autumn Statement 2015, we announced that when assessing eligibility for Housing Benefit and Universal Credit that Local Housing Allowance rates would be applied to all social rents from April 2018, where tenants had signed new or re-let tenancies from 1 April 2016.

“I am able to announce that the Government will put in place a year-long exception for all tenants of supported accommodation in the social sector so that this measure will only apply to these tenancies from April 2017, rather than April 2016. As examples, this will include refuges for those fleeing domestic abuse, homeless provision, housing for ex-offenders, as well as supported housing for older and disabled people. I can also confirm that the one year exception will extend to housing co-operatives, alms houses and Community Land Trusts.

“I am doing this because I understand the importance of ensuring that both those living in supported accommodation and those who provide this type of accommodation receive appropriate protections. This is why we are awaiting the outcome of a Supported Accommodation research project and subsequent policy review, to ensure support is focused on the most vulnerable, and appropriate groups are safeguarded. I consider it important to have evidence to support any decisions made, before determining the level of any protections for this cohort beyond April 2017.

“I will write to social landlords and provide guidance that will allow them to advise people taking on new and re-let tenancies from either April 2016 or April 2017 (for supported accommodation) as to how they may be impacted.”

We welcome the Government’s decision to suspend the implementation of LHA caps for 12 months while the current supported housing review runs its course.

The good news is that as with the 1% reduction the Government has listened to our concerns and reviewed the evidence we sent them - and they are becoming increasingly aware of the impacts the proposed caps will have on supported housing.

The less positive news is that these are postponements of plans, not cancellations. The reductions in Housing Benefit are still due to come in from April 2018.  They will only apply to new tenancies starting after April 2017 rather than a month from now as originally planned.

While the next year will provide a much needed breathing space to work out a more realistic solution with Government, we know that many homelessness organisations will find themselves stuck in limbo and unable to commit to future projects until there is more certainty about their future rental income.

We look forward to working with the Government on the review to find a sustainable approach to the funding of housing that can offer essential support as well as accommodation to the most disadvantaged people in society.