Councils to take big hit on temporary accommodation, says CIH Scotland
Only now are some local authorities coming to terms with the impact the initial Housing Benefit changes will have on temporary homelessness accommodation from next April, according to CIH Scotland. Temporary accommodation owned and managed directly by councils will be affected by both the bedroom tax and the weekly household benefit cap. But CIH Scotland says that in recent weeks there has been considerable confusion about the position, owing mainly to a DWP circular which appeared to refer only to temporary accommodation leased from other landlords.
David Bookbinder, Head of Policy and Public Affairs at CIH Scotland, said:
“In England, the great majority of temporary accommodation is leased, and we’ve found that when we make enquiries of the DWP we have to stress that much temporary accommodation in Scotland is provided in property owned and managed directly by the local authority. With the position now clear, councils will be considering the very significant implications.
“Leased accommodation has already been subject to Housing Benefit subsidy limits imposed in the last couple of years, but council-owned temporary accommodation has so far escaped any restrictions. This has meant that in many areas charges have remained extremely high – over £400 a week in some cases – and this funding has been an important component of overall provision of homelessness services.
“Even though we don’t agree with it, we know that temporary accommodation will be part of the Universal Credit system which begins in October 2013, when providers will need to be explicit about what’s rent and what are other charges. We now know that councils will need to be taking action from April, with the main aim being to identify the rental charge to be made to the occupants of temporary accommodation and keep it as reasonable as possible.
“Ensuring rents are reasonable will help limit the bedroom tax deduction for people who are under occupying, and will also protect people from losing out as a result of the weekly household cap (£350 per week for single people). Some councils have already indicated to us that they don’t intend trying to collect bedroom tax from people placed in temporary accommodation. This is commendable but means councils will be taking even more of an income hit on their General Fund, which is already under extreme pressure, not least from the council tax freeze."This is a major headache for councils, and comes before the even greater hit which all providers will take if we can’t persuade the DWP to keep temporary accommodation out of direct payments under Universal Credit.”
CIH Scotland’s guidance Preparing for the Bedroom Tax and Beyond, which covers the position for temporary accommodation, can be seen here
Contact David Bookbinder - 07950684153