Proposed LHA Cap Causes Concern Across The Social Housing Sector

Last November the Government outlined their plans to extend Local Housing Allowance (LHA) to social landlords. This, in effect, would mean that those living in supported housing would only be able to claim the same housing benefit as those under private landlords, leading to a massive shortfall in income for providers.

At present, social housing providers are excluded from LHA, which is intended to cover any costs associated with renting a property, such as core rent and eligible service charges. However, the new rules will apply to those who sign their tenancy from April 2016 onwards, although the LHA rate of Housing Benefit entitlement will not apply until 2018. The potential impact of this change could lead to services closing due to the extent of the shortfall between the costs of running services and the amount eligible under LHA.

But Homeless Link is leading the fight-back against the changes. They said: “We know this will have a major impact on the homelessness sector so we need to start collecting evidence to help convince the Government to rethink their plans. To make sure we can make the strongest case, we need to know how the shortfall will affect services.”

“From what we understand, supported housing will be covered by the new rules. This has understandably caused alarm among our members. We have prioritised this issue and, since the announcements, we have been working with the Government to seek clarity and understand how the projected impact will be mitigated.”

“While the Government has said they are committed to protecting supported housing, the mechanism for how that will happen is not yet known. We are not confident that additional Discretionary Housing Payments (DHP) will be sufficient to cover the gap in revenue this would create.”

To gather this evidence, Homeless Link have set up a simple online spreadsheet that organisations can fill in with basic rental information. All of this will be kept anonymous, but when combined with information from other organisations it will provide a powerful snapshot of the impact the changes will have on the sector.

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