Housing Benefit and Universal Credit:Written parliamentary statement

One of the Government’s key commitments is to protect the most vulnerable. Supported housing supports hundreds of thousands of the most vulnerable people across the country. A safe, stable and supportive place to live can be key to improving people’s lives, and for many it is a stepping stone to independent living in the longer term. The Government values the role supported housing plays and is committed to protecting and boosting the supply of supported housing and ensuring it provides value for money and works for those who use it as well as those who pay for it.

On 15th September I announced how from 2019/20 we will be introducing a new funding model for Supported Housing. This will ensure that the sector continues to be funded at the same level it would have otherwise been in 2019/20, taking in to account the effect of the Government policy on social sector rents. From 2019/20, core rent and service charges will continue to be funded through Housing Benefit or Universal Credit up to the level of the applicable Local Housing Allowance rate. For costs above the level of the Local Housing Allowance rate, Government will devolve an amount of funding for disbursement locally. In England, we will devolve funding to local authorities to provide additional ‘top up funding’ to providers where necessary, reflecting the higher average costs of offering supported housing, compared to general needs. An equivalent amount will be provided to the Devolved Administrations and it will be for them to decide how best to allocate the funding. Until 2019/20 the application of the Local Housing Allowance rate to supported housing will be deferred. This measure confirms the Government will continue to provide support for those who require supported housing and ensures providers can have the confidence they need to invest in new development

I set out in my statement of 15th September 2016 my intention to consult on the implementation of this new funding model and committed to publishing a consultation. Today, along with my Right Honourable Friend, the Secretary of State for Communities and Local Government, we are publishing a consultation document to develop the detail that will underpin the new funding model. We are also publishing the evidence review of supported accommodation in Great Britain, jointly commissioned by my Department and the Department for Communities and Local Government at the end of 2014. The review has provided a helpful insight in to the scale, scope and cost of the sector.

Furthermore, I am able to announce today, a simplification and alignment of the application of the Local Housing Allowance policy for general needs accommodation, in light of the changes that have been made to supported housing. We propose to bring in the policy for general needs accommodation in the Social Rented Sector in 2019, instead of 2018 as previously announced, to align with the changes to supported housing.

For Housing Benefit it will apply, as announced at Autumn Statement 2015, to tenants who have signed new or re-let tenancies from 1 April 2016 and their social sector rent is higher than the Local Housing Allowance rate. Those on Housing Benefit who took their tenancy before April 2016 will not be affected.
For Universal Credit, to ensure simplicity and a streamlined process, Local Housing Allowance rates will apply to all new and existing tenants, again only where their social rent is higher than the relevant Local Housing Allowance rate.
People moved by the Department from Housing Benefit to Universal Credit after April 2019 whose overall benefit entitlement is lower will be protected, in cash terms, under transitional protection arrangements. On reaching state pension age Universal Credit claimants flowing back on to Housing Benefit with tenancies signed before April 2016 will also be protected.

Additional Discretionary Housing Payments were made available at Autumn Statement 2015 to protect the vulnerable and help people make the transition to the new rules.