5 April 2005 - New Housing Benefit scheme shows early signs of success
A radical new way of paying Housing Benefit in nine test areas has been introduced smoothly according to a report published today.
The new scheme, the most major reform of Housing Benefit since its introduction 20 years ago, pays a flat rate ‘Local Housing Allowance,’ varying only by the size of family and the area they live. At present, Housing Benefit is also related to the total rent of a house or flat.
Under the LHA, tenants have the chance to shop around, finding cheaper property and pocketing the difference, or trading up and making up the extra rent themselves.
Councils testing the scheme and their partner organisations are generally happy with the way the scheme has been introduced and the fact there have been few hitches, the report found. Concerns that the LHA would impact on levels of homelessness have not materialised.
The way councils are assessing vulnerability and arrears has generally worked well in all the pathfinder areas. Overall, less than one in ten claimants currently have their Housing Benefit paid to their landlord under those arrangements.
Most claimants now have a bank account and overall, six out of ten claimants are using those accounts to receive Housing Benefit payments under the new scheme.
Housing Benefit Minister Chris Pond said: “The new system for Housing Benefit is working well. It will increase choice and responsibility for tenants. It will be much simpler and quicker to administer. Customers will also have greater certainty about how much help with their housing costs they would receive if they went back to work, helping them bridge the gap between being unemployed and taking a job.”
There are nine Local Housing Allowance Pathfinder councils around the country and the report covers their experiences. The Pathfinders will be trialling the LHA for two years and the evaluation will inform roll-out across the country.
Notes for editors
- The new scheme has been designed to pay the same amount to tenants with similar circumstances living in the same area. This differs from the existing scheme, which ties the level of benefit to the rent actually paid (subject to a range of restrictions applied by a rent officer). Currently, tenants who live in smaller properties than they are entitled to, or less attractive properties, generally receive less benefit than those with similar needs in the same area, who live in larger or more attractive properties.
- With the LHA there is no longer a need for the complex rent restrictions and individual referral of rents to rent officers that currently contribute to the delay in processing claims by private tenants.
- The evaluation report is based on interviews with stakeholders by researchers six months after the scheme began.
- The nine councils testing out the LHA are Blackpool, Brighton & Hove, Conwy, Coventry, Edinburgh, Leeds, Lewisham, North-East Lincolnshire and Teignbridge. A further nine councils will start implementing the LHA over the next few months, starting on 11 April, starting with Wandsworth, followed by East Riding, St Helens, Argyll and Bute, South Norfolk, Norwich, Pembrokeshire, Guildford and Salford.
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