Evaluating resources, requirements and new opportunities
The impact of welfare reform on household income
Homelessness presentations to local authorities are becoming more regular due to the impact of the welfare reform. Capacity to respond is being affected and demand for services are likely to rise during this time of cost cutting measures, where there has been a reduction in the use of temporary accommodation and emphasis on improving value for money.
Funding pressures have made it increasingly difficult to meet and plan for housing needs as there is a constrained and risk averse mortgage market, changes to local housing allowance affecting access to the private rented sector and a shift to revenue funding through the affordable rent model for new supply.
These challenges are felt across the sector and stem from uncertain economic conditions and the government’s primary objective to reduce the national deficit. To enable local authorities to contribute to this, the government is in the process of introducing a new ‘operating framework’. The framework for housing is being radically reformed, with the intention that local authorities and their registered provider partners will have greater control over the use of social and affordable housing to ensure it is used fairly. Housing organisations should explore the opportunities that this framework presents to achieving the desired outcomes of reduced statutory homelessness, efficiencies and improving value for money.
We can see an increased level of homelessness due to:
- Legislation around right to buy and eligibility for social housing/social rents
- Ongoing development of the detail of welfare reform and universal credit – leading to a need for joint work around the evidence base, assessing the likely impact and tracking this as policy detail emerge
- Public service reform legislation including a changing and challenging role for local authorities (against a backdrop of fiscal tightening and overall funding cuts)
- Work towards the Comprehensive Spending Review– especially around new supply but also in all areas including homelessness a need to develop an evidence base around the need for funding
- A focus on owner new supply as the key link housing has with economic growth and prosperity
- Ongoing detail for the final HRA self financing settlement bringing added risk but also opportunity for stock owning local authorities
- Consultation on and transition to the new regulatory framework with local authorities housing role largely becoming reliant on self regulation
- A growing focus politically on the economy and interventions to support economic growth
- Continuation of an approach that prioritises home ownership and views social housing as welfare
Impact on homelessness
- Negative consequences of welfare reform
- Further restriction on access to mortgages but also uncertainty around interest rate rises and ability of those in arrears to continue to find solutions, sustain their current position and avoid re possession
- Possible exploitation of individuals with potential to benefit from RTB and tenant cashback – a return to the issues of elderly tenants buying properties as an investment for family members but over a period of time unable to remain their due to maintenance liabilities and/or unsuitability of accommodation
- Restricted ability to provide new sub market homes in the right places to meet a range of needs, and to make a ‘coherent offer’
- Affordable rent – the only choice but a price rather than a tenure and doesn’t provide a long or even medium term solution on its own
- Reductions in support/advice services in local communities
How can we help you?
CIH consultancy has an in-depth understanding of all these challenges and how they link with strategies, delivery, policy, and wider political and social pressures. We are available to conduct reviews of homelessness services ranging from light-touch to in-depth forensic audits.