Last updated Date:01/11/2012
The National Audit Office report: Managing the impact of Housing Benefit reform
The NAO published a report, Managing the impact of Housing Benefit reform which examines how the DWP is positioned to tackle the challenges for implementation of housing benefit reform measures. The report does not evaluate the merit of the reforms themselves. (November 2012)
The most significant recent development in welfare reform is the publication of several Welfare Reform Act draft regulations which include:
- universal credit regulations
- housing benefit cap regulations
Before these draft regulations can become law the DWP must put them out to consultation through the Social Security Advisory Committee (SSAC). The SSAC invites responses from the public and reports its findings to the Secretary of State who must then publish his response – including any changes he decides to make.
The SSAC consultation closed on 27 July and it is now considering our response and those from other organisations.
The Welfare Reform Act 2012 also introduces the social sector size criteria which will pose a particular challenge for landlords who have working age tenants claiming housing benefit and living in homes which are larger than they need. Our guide helps landlords and local authorities develop a strategic response to these changes.
Transitional protection arrangements
DWP published details on 4 July 2012 of transitional protection arrangements. The briefing note provides further detail of the policy and sets out the types of change of circumstance when protection ends.
New data sharing regulations came into force on 2 July 2012. The regulations allow data sharing between DWP, local authority housing benefit teams and social landlords to help facilitate support to be offered to tenants and households that are affected by the welfare reforms. The DWP has published further guidance.
Future Conservative direction on further welfare reform
On the 25 June 2012 David Cameron called for a national debate about further welfare benefit reforms. The Prime Minister said that the debate should look at the fundamental questions of: what working age welfare is for and who should receive it. The speech is expected to inform the Conservative Party's next election manifesto rather than change current government thinking.
Read CIH's press release on the speech.
The two key areas of reform affecting housing benefit are the introduction of universal credit and the measures introduced in the emergency budget and spending review of 2010.
The budget and spending review changes most severely affect private tenants by limiting the amount housing benefit to a rent no greater than the bottom 30% of the market or an overall national limit –whichever is the lower.
Universal credit makes fundamental changes to the welfare system, aimed at simplifying the benefits system and improving work incentives.
For further information read our briefing note on the Welfare Reform Act 2012.
The Welfare Reform Act fundamentally changes the landscape for help with housing costs. The replacement of housing benefit, tax credits and out of work benefits (JSA/ESA/IS) with a single universal credit will help simplify welfare and is the most effective solution to easing the deepest part of the poverty trap whereby claimants see only very small gains from increasing their earnings.However, there are concerns about the administration and payment of universal credit including:
- service access for customers without a computer or broadband access when 50%-70% of claims are expected to be made online
- customer service access because claims are processed at a single national office
- the capacity of the computer system and administration to cope with the number of claims
- customers that have difficulty managing their money are at greater risk of arrears because the rent element is paid with the rest of UC to them, instead of direct to the landlord.
Benefit backlogs and poor payment decisions are the biggest threat to landlords and tenants. Both could undermine landlord’s business plans and will cause considerable distress to tenants. Slow processing times or an inadequate computer system will result in benefits back logs whilst poor payment decisions risk increased rent arrears.
Get involvedWe are keen to hear from providers and local authorities about how you are approaching welfare reform. What changes to your services are you making and are you making use of our welfare reform impact tool. Get in touch with Sian.Sankey@cih.org
Joint letter to government regarding bedroom tax changes - January 2012
Protecting your income stream CIH/Housemark April 2011
CIH briefing paper on the impact of forthcoming changes to Housing Benefit & LHA April 2011
CIH briefing on the impact of Housing Benefit reforms November 2010
CIH response to SSAC on changes to the Local Housing Allowance September 2010
CIH response to the inquiry into the impact of the changes to Housing Benefit announced in the June 2010 Budget September 2010
CIH briefing paper on the impact of changes to Housing Benefit and LHA in the budget July 2010