Recommendation 22

HM Government Acknowledged

This Government has provided an unprecedented package of financial support to protect renters whose income has been affected throughout the COVID-19 pandemic. To help prevent people getting into financial hardship, we increased the local housing allowance (LHA) in April 2020 to the 30th percentile of local market rents in each area at a cost of almost £1 billion. The increased LHA rates will be maintained at the current levels in cash terms in 2021-22, even in areas where the 30th percentile of local rents has gone down. Over 2020-21, this has already provided 1.5 million claimants with around £600 more housing support than they would otherwise have received. We have also boosted the welfare system by billions of pounds, including increasing Universal Credit and Working Tax Credit by up to £1,040 for 2020-21. We spend around £30 billion a year on housing benefits – more than any other OECD country as a proportion of GDP on housing support (2018 data). In the 3 March Budget, the Chancellor of the Exchequer announced a 6-month extension of the £20 per week uplift to Universal Credit, alongside a one-off £500 payment to eligible Working Tax Credit claimants. We have engaged our counterparts in the Devolved Administrations throughout the pandemic, and will continue to work closely with them to share learning on how best to support tenants, including learning from the loan schemes offered in Scotland and Wales. We believe the targeted interventions this Government already has in place, which are all forms of non-repayable support, offer an appropriate and sustainable form of help for vulnerable renters, avoiding tenants taking on further debt to cover arrears. For 2021-22 the Government has made available £140 million in Discretionary Housing Payments funding for local authorities in England and Wales to distribute to help support vulnerable people with housing costs, building on the £180 million provided in 2020-21. The level of funding for 2021-22 reflects the increase to LHA rates. We recognise that 2020-21 has been a challenging year for all local authorities, with some unable to spend their allocation due to local restrictions including office closures and staffing and resource pressures as a result of local authorities being at the forefront of the delivery of critical support measures during the pandemic. During 2020-21 we closely monitored spend as we expected additional government support provided in response to the pandemic to be wound down and a potential increase in demand for DHPs. However, support such as furlough and extended notice periods were continued and will now not be wound down until later on in the year. We now expect to see an increase in demand in 2021-22. In addition, the Coronavirus Job Retention Scheme has offered support for businesses to pay staff salaries, enabling people to continue to pay their rent and has been extended until September 2021. Official data shows that the Government’s support has been effective in helping tenants stay in their homes during the pandemic. The latest homelessness statistics covering the period October – December 2020 show a 40% decrease in households owed a homelessness duty due to the end of an Assured Shorthold Tenancy compared with the same period in 2019. In addition, the English Housing Survey Household Resilience Survey (Wave 2) shows that the vast majority (91 per cent of private renters) were up to date on their rent when surveyed in November to December last year and of these most are in arrears of less than 2 months’ rent. The Government will continue to monitor the effectiveness of our extensive financial support in protecting tenants and landlords, including through the English Housing Survey Household Resilience Study3.