Agenda Item No 9
The Vale of Glamorgan Council
Scrutiny Committee (Housing and Public Protection): 9 October, 2013
Report of the Director of Visible Services and Housing
The Affects of the Welfare Reform Act on the Homes4U Allocation Policy
Purpose of the Report
1. To apprise Members of the current Homes4U policy and the impacts on this policy of the Housing Benefit reforms which came into effect in April 2013.
1. That Members note the existing policy and the allocation processes in place to mitigate the impacts of welfare benefit changes, particularly in terms of tenancy sustainability and potential rent arrears.
Reason for the Recommendation
1. To advise Committee of the impacts of the Homes4U policy changes. A flowchart highlighting the process of applying to Homes4U is attached as Appendix 1.
2. A report on the affects of the Welfare Benefits Changes on the Homes4U policy was requested by Councillor Anne Moore.
3. In April 2013 Housing Benefit rules changed for 'working age’ tenants who live in council and housing association properties. Deductions are made from Housing Benefit claims where a claimant is living in a property that is classed as too large for them. There is a 14% deduction for 1 extra bedroom and a 25% deduction for 2 or more bedrooms.
Relevant Issues and Options
4. In January 2013, a report was submitted to Scrutiny Committee (Public Protection and Housing), advising of the potential implications of the Welfare Reform Act and the revisions to the allocation policy made to take account of the changes. As Members will be aware, it proposed a number of recommendations which were subsequently adopted, namely:
Additional preference to be awarded for those tenants under occupying accommodation, on a discretionary basis in addition to their GOLD priority banding.
Additional preference be given to existing tenants who are lacking a bedroom, on a discretionary basis, where a move to a larger property would not conflict with the reforms.
5. Changes were also made to the Homes4U Allocation matrix to ensure that applicants are only considered for properties that are suitable. A copy of the amended matrix is included in Appendix 2. A copy of the leaflet highlighting the changes made in the allocations process in 2013 is attached in Appendix 3.
6. There are currently 642 households that are affected by the reforms, which could result in financial hardship. Considering the circumstances of the 642 families since April 2013 the position is as follows:
Rent arrears of 198 households have gone up
52 households that had clear accounts previously have now fallen into arrears
92 households' rent arrears have reduced
5 households' rent balances are unchanged
48 households have cleared all outstanding rent arrears
247 households' rent accounts are in credit
86 households are currently claiming discretionary housing payments (DHP)
10 households have transferred to another property due to housing benefit reductions
Rent arrears is increasing marginally although still remains at under 1% of the collectable rent debit.
Homeless presentations have not increased as a consequence of the changes
The main affect on the Allocation policy to date has been the reduction in the number of people requesting three bedroom properties. This is a consistent picture with the partner Housing Associations also experiencing difficulties letting three bedroom homes.
7. Current Actions Adopted to Support Existing Tenants / Tenants of Housing Associations include:
The recruitment of Money Advisors in the Housing Management Team to support the families affected by welfare benefit changes, providing one to one advice on financial management, benefits and credit advice, sign posting to other agencies, and facilitating rent payment options.
A number of joint working initiatives with our Housing Benefits Section and partner organisations attempting to minimise the impact of the reforms and ensuring that consistent and timely information is provided in a variety of formats including open day events, distribution of leaflets, letters, home visits, improved money advice.
8. Prepared Future Actions
The Homes4U team have amended their forthcoming marketing media to include an 'Immediately Available Homes' tagline for low demand properties. The team recognises that it needs to continue with marketing of this type to attract those families that previously may not have been able to access social housing due to their low banding. Housing Associations are considering alternative business models for homes of lower demand e.g. intermediate rent.
Local lettings policies are currently used on a development by development basis for downsizing purposes. Going forward those families that are affected by the welfare benefit changes currently in social housing will be given a preferential banding.
Homeswapper, the national 'mutual exchange' scheme was adopted by the Vale in September 2010 and all of the partner organisations of Homes4U currently subscribe to the scheme. Officers from the Vale will continue to market the scheme with partner organisations.
The Homes4U, Homelessness and Housing Management teams will continue to monitor rent arrears, homeless presentations and allocations in the context of welfare benefit changes to track any significant patterns in these areas. It is envisaged that rent arrears across the social housing sector in the Vale may be impacted more heavily as the period of Discretionary Housing Benefit comes to an end for each applicant.
Resource Implications (Financial and Employment)
9. It is anticipated that some tenants may continue to experience financial difficulty when adjusting to the welfare reform proposals. The benefit cap and any reduction in Council tax benefits will have an immediate impact on an individual's gross and disposable income. Allocation of housing based on affordability is key to ensuring families and individuals can sustain a tenancy long term. Protecting the Council's income stream from rents will ensure capital investment works can fully funded.
Sustainability and Climate Change Implications
10. This latest development of the policy will allow there to be a consistent approach with accommodation in light of the changes brought by the Welfare Reform Act.
Legal Implications (to Include Human Rights Implications)
11. The maintenance of a waiting list is a statutory duty of a Local Authority.
Crime and Disorder Implications
12. Anecdotally it is accepted that there may be crime and disorder implications from reducing the sustainability of a tenancy through a reduction in a family's income e.g. anti social behaviour and domestic violence.
Equal Opportunities Implications (to include Welsh Language issues)
13. The Homes4U Allocations Policy must comply with the following legislation:
The Code of Guidance for Local Authorities on the Allocation and Homelessness 2003
The Children Act 1989
The Equalities Act 2010
The Crime and Disorder Act 1998
Local Government Act 2000
The Homelessness Act 2002
The Human Rights Act 1998
14. This report is consistent with the following corporate and service objectives of the Council:
Objective 1 - All citizens of the Vale have access to suitable affordable housing options.
Policy Framework and Budget
15. This report is consistent within the policy framework and budget.
Consultation (including Ward Member Consultation)
16. As public housing is a Vale wide issue no Ward Member consultation has been undertaken.
Rob Thompson - Homes4U Manager - 01446 709522
Head of Finance
Head of Legal Services
Miles Punter - Director of Visible Services and Housing.