Rent Reduction Deferred (For Now) Says Minister

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After months of lobbying and hearing evidence from across the housing sector, the Minister of State for Welfare Reform has announced a “year-long exception for all supported accommodation from the 1% rent reduction in the social rented sector”. The reduction was due to come into effect this April, leading many providers to wonder how they can accommodate a cut in income.

But on Wednesday (27.1.16), Lord Freud made the following commitment to address the issue: “I am not in a position to be utterly specific about how we will do this, but I can say that we will put in place the appropriate protections for those in supported housing. DWP and DCLG will be working closely together to make sure that those protections are in place.”

“We appreciate the concern, and we will aim to do this urgently. There are various solutions one could discuss, but I make that commitment in the context of what I have already said about the 1%. We will now just sort out the caps.”

Lord Freud was referring to the proposal to cap housing benefit at the same level as private landlords, that would leave many supported housing providers in a perilous financial state and possibly causing some to close down.

In a letter to Sheila Howard, Bosco manager, Rick Henderson from Homeless Link said: “While the suspension is only initially for a year, we believe it is an important change which addresses an immediate concern for services that were threatened by the potential reduction in their rental income.”

“Beyond this change, we look forward to working constructively with Government, other key stakeholders and our members to address other funding concerns agencies have, such as the LHA caps.”

Sheila commented: “This is good news, for now, but there is still a lot of work to be done to convince the government that any cuts that impact on the provision of supported housing is a false economy. Some of our most vulnerable residents need high-intensity, high-quality support and anything that affects that will lead to greater cost elsewhere, such as an increased demand on the NHS and Social Services.”

“These are turbulent financial times for our sector, but we must keep our eye on the ball if we are to continue providing the level of support and care that our residents need” she said.