LHA – a complete disaster?

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  • #39083
    peterdelamothe
    Keymaster

    A few years ago I said at a conference in Leeds that I thought LHA was a big mistake. I based this on a) the unknown costs although these were known to be growing and b) my understanding of landlord behaviour. DWP were at the time highly critical of what I said and told the conference organisers so in no uncertain times ( :party:).

    Yet I had no idea that LHA would now be described as such a complete disaster in the political field. So much so that the last Government has indicated it was one of the causes of their defeat at the election and a huge mistake. With Paul Howarth taking his leave yesterday from the main Steering Group, I think all of those responsible have now left the DWP or at least Housing Benefit. No kudos either! Yet the introduction of LHA was a model for introducing a new scheme effectively. Rather an unfortunate end really.

    Unlike with LHA, there are a lot of cynical views about Universal Credit and expectations are much lower. I wonder if that means it will in fact turn out to be a lot more successful?

    #110809
    Andi M
    Participant

    Some interesting points Peter, but (and i never thought i would be doing this) I have to defend LHA to a certain degree. We were one of the pilot Local Authorities for the LHA scheme, and I have to be honest and say that here it actually worked pretty well. We had the advantage of customers knowing in advance what level of HB payments they could expect to recieve, without all the associated problems that I have seen with LHA elsewhere. The rents have had a steady increase, but probably not more so than they would have done anyway. On the direct payment side there have been a few cases of absconders, but certainly not in the numbers or to the degree that was feared.

    LHA was a national scheme that didn’t really take into account local variances. For example in our area we don’t have an abundance of high end rental properties, and a lot of the rents were clustered around the 30 – 50 percintile mark. This small variation in rents lent itself nicely to a small variation in the LHA, with realistic rent levels (none of this houses in disrepair having their rental value artificially inflated by all the mansions in the area). This meant even before the £15 cap to the excess was brought in that our customers were not achieving the £100 plus excess that was seen elsewhere.

    Having said that, elsewhere LHA was a disaster, the rental markets and available accommodation was completely different and lead to the well publicised problems that we are all aware of.

    If there is a lesson to be learnt from this, it is not that schemes like LHA are bad, its that you disregard regional variations at your peril, and this is my biggest concern with the incoming Universal Credit

    #110813
    Andreas
    Participant

    Personally, I think LHA together with the abolition of benefit periods, the dragging on of the 12 month automatic backdating for pensioners and the introduction of Tax Credits has been disastrous for tax payers and HB administrators alike.

    On the other hand, those who benefited from these changes would probably disagree 😉

    As for Universal Credit, who knows, it may actually deliver a better way of providing welfare to those most in need – but if the proposed time scales are adhered to I fear it’s another disaster waiting to happen. :Sp

    #110815
    David
    Participant

    I recall that one outcome of reducing LHA rates to the 30 quartile would be it would help reduce rents an dtherefore cost of HB

    So which way do rents head?-

    http://www.bbc.co.uk/news/business-14934316

    i heard an interview this morning where it was said buy to let landlords are one of very few ares seeing an above inflation rate of returna

    #110859
    Julian Hobson
    Participant

    How much did/does the relatively new disregard of Child Benefit cost ? Never really understood the motivation behind that one.

    #110860
    John Boxall
    Participant

    [quote=Julian Hobson]How much did/does the relatively new disregard of Child Benefit cost ? Never really understood the motivation behind that one.[/quote]

    Ditto the maintenance disregard.

    I can see the point of disregarding CHB, if you were simply to adjust the AA’s to take into account that everyome gets CB, to make the administration simpler, however this was not the chosen method.

    Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and—and in short you are for ever floored.

    Wilkins Micawber, Ch12 David Copperfield

    #110861
    K Sylvester
    Participant

    The Maintenance disregard really wasn’t thought through. Here in affluent Surrey we have many lone parents receiving £1500-£2000+ pcm and still get full HB and CTB!!!

    #110862
    John Boxall
    Participant

    [quote=K Sylvester]The Maintenance disregard really wasn’t thought through. Here in affluent Surrey we have many lone parents receiving £1500-£2000+ pcm and still get full HB and CTB!!![/quote]

    :O J) :star: :exmark:

    Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and—and in short you are for ever floored.

    Wilkins Micawber, Ch12 David Copperfield

    #110874
    Anonymous
    Guest

    We had a clt who had a rental liability of £2000 pcm, which even for Chichester is quite high. She was referred to fraud to see if she had undeclared income because there was no evidence of rent arrears and she was very reluctant to send in bank statements. In the end she withdrew her claim but when I added up her disregarded child benefit (3 children) and her disregarded maintenance it became clear how she could afford the unmet rent.

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