Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 17
17
Not Addressed
The Government was unable to provide a satisfactory justification, let alone an explanation, as to...
Recommendation
The Government was unable to provide a satisfactory justification, let alone an explanation, as to why DWP reimburses councils for 100% of housing benefit if the provider is registered but only 60% if it is not registered, leaving the council to pick up the rest of the tab. The same 100% subsidy should be paid by DWP whether or not the provider is registered. Later in this report we recommend that all providers be registered. While this will result in increased costs for DWP, this is likely to be offset by savings resulting from implementing our recommendations to drive out unscrupulous, profit-driven providers. (Paragraph 87) Planning and licensing
Government Response Summary
The DWP subsidy rules vary according to accommodation type, landlord/housing provider, and eligible rent rules. The current Housing Benefit subsidy rules were intended to incentivise authorities to use registered providers, but increased demand has led to wider use of charities and CICs which are not subject to rent standard and have different subsidy rules.
Government Response
Not Addressed
HM Government
Not Addressed
46. Local Authorities administer all the Housing Benefit awards in their area and seek reimbursement for these through the Department for Work and Pension’s (DWP) Housing Benefit subsidy arrangements. The DWP subsidy rules vary according to the type of accommodation, the landlord/housing provider and the eligible rent rules which apply. As a result, local authorities are not fully reimbursed for all Housing Benefit supported housing cases. 47. The current Housing Benefit subsidy rules for exempt accommodation were originally intended to encourage local authorities to keep costs reasonable by incentivising them with 100% subsidy if they used registered providers (as rents are subject to limits set out in the Regulator of Social Housing’s Rent Standard). However, the increased demand for supported housing means that there is now wider use of charities and Community Interest Companies (CICs) which are not subject to the rent standard and have different subsidy rules, meaning that local authorities are not able to recover all the Housing Benefit costs. Not all housing provided by Registered Providers is subject to the Rent Standard. This includes housing that does not meet the definition of low-cost rental accommodation in the Housing and Regeneration Act 2008 and housing that is excepted in the Rent Standard, such as specialized supported housing.