Plans by the UK Government to change housing benefit will have a “catastrophic impact” on vulnerable people living in supported accommodation, including victims of domestic violence, disabled people and the homeless, Scotland’s social justice secretary has warned.
Alex Neil has written to Lord Freud, UK Minister of State for Welfare Reform, seeking urgent clarification over proposals which would ‘cap’ the amount of housing benefit tenants of social landlords can receive.
Concerns have been raised it will not be enough to cover higher rents in supported accommodation and refuge services - which have more intensive management costs - and providers will be left struggling to keep their doors open.
The changes to housing benefit for social housing tenants were announced by Chancellor George Osborne in last November’s spending review, with the aim of ensuring housing benefit costs are “better controlled” and to help prevent “social landlords from charging inflated rent for their properties”
It means Local Housing Allowance (LHA) – which works out housing benefit entitlement and was previously only applicable to people renting from a private landlord – will now also apply to tenants of social landlords from April 2018.
However last week a survey carried out by Scottish Women’s Aid found that a cap linked to the LHA rate would result in an annual loss of at least £5,800 for a two-bedroom refuge flat in a rural area and £11,600 per year for a three bedroom refuge in a semi-urban area.
The charity pointed out that all women’s refuges in Scotland are owned by social landlords and examples of extra costs which have to met include installing safety and security measures and furnishing the accommodation.
Neil said: “This proposal is essentially a cap to the amount of housing benefit housing social and council tenants will receive, and what’s still not clear is how far this cap will go when it comes to the most vulnerable living in refuge accommodation.
“This includes women and children fleeing domestic violence, disabled people and those affected by homelessness.
“We know rent and service charges in supported accommodation is significantly higher than the LHA rate. Without the existing levels of housing benefit to cover these costs, refuges will be forced to close.
“This move will have a catastrophic impact on those people who depend on such support for survival.”
In his letter, Neil noted the UK Government has said it will act to put protections in place for supported housing tenants – but had not yet given any detail.
He added: “A suggestion is that the shortfall will be made up of discretionary housing payments – it would be down to individuals to apply for these, and would not offer any security for supported housing projects.
“Until this detail is provided, the organisations that provide supported accommodation are being left in an unacceptable state of uncertainty.”
A DWP spokeswoman said: “We value the work of the supported housing sector and are working closely with them to ensure they are supported as effectively as possible in advance of the policy taking effect.
“We are also providing local authorities with £870m over the course of this Parliament precisely so that they can support people in their communities who need time to adapt to reforms.”
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