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kevin's picture
Joined: 09/03/2009

This impact assessment of the changes to housing benefit which begin from April 2011 identifies a number of risks associated with these changes. These are:

  • increases in the number of households with rent arrears, eviction and households presenting themselves as homeless;
  • disruption to children’s education and reduced attainment;
  • disruption to support services for people with disabilities and other households with care and support needs;
  • an increase in the number of households living in overcrowded conditions; and
  • a decrease in the number of and quality of private rented sector properties available to Housing Benefit tenants.

The assessment estimates that, in most cases, there will be shortfalls of less than £10 per week. Some 32 per cent of customers will not experience a shortfall as a consequence of these changes.

It then mentions some ‘mitigating’ factors:

“With an active response from local authority housing options services, in the large majority of cases tenants should be able to remain in their current home or move to a more affordable property. Landlords are likely to be more willing to negotiate on rent levels in return for the guarantee of benefit payments being made directly to them rather than the tenant. The period of transitional protection will provide customers and housing departments time to find alternative accommodation. Local authority Discretionary Housing Payments funding is being tripled to £60m per year in order to ensure that households who need more time to find alternative accommodation or who are less able to move are protected. If early action is taken, and practical help and good information made available to both tenants and landlords, then problems can be minimised.”

You can view Housing Benefit: Changes to the Local Housing Allowance Arrangements and also Equality Impact Assessment Housing Benefit from the links below.

More information<

John's picture
Joined: 09/03/2008

New regulations have been issued in relation to the reform of local housing allowance from April 2011.

In force from 1 April 2011, the Housing Benefit (Amendment) Regulations 2010 (SI.No.2835/2010) and, in force from 18 March 2011, the Rent Officers (Housing Benefit Functions) Amendment Order 2010 (SI.No.2836/2010) amend the Housing Benefit Regulations 2006, the Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006, the Rent Officers (Housing Benefit Functions) Order 1997 and the Scottish equivalent, to limit the amount of local housing allowance that can be awarded from 1 April 2011 by -

  • removing the five bedroom local housing allowance rate so that the maximum level is for a four bedroom property;
  • introducing absolute caps so that local housing allowance weekly rates cannot exceed £250 for a one bedroom property, £290 for a two bedroom property, £340 for a three bedroom property and £400 for a four bedroom property;
  • providing for local housing allowance rates to be set at the 30th percentile of rents in each broad rental market area rather than the median; and
  • removing the up to £15 per week excess benefit which some claimants can receive.

The amendment regulations also -

  • provide up to nine months of transitional protection from the changes to local housing allowance rates to claimants who claim housing benefit before 1 April 2011;
  • provide for an additional bedroom within the size criteria used to assess housing benefit claims in the private rented sector where a disabled person, or someone with a long term health condition, has a proven need for overnight care and it is provided by a non-resident carer who requires a bedroom; and
  • make a change to the payment provisions for cases assessed under the local housing allowance arrangements to allow local authorities to consider paying housing benefit directly to the landlord if it would enable the claimant to secure or retain a tenancy.

See Statutory Instrument -

The Housing Benefit (Amendment) Regulations 2010 No. 2835<

The Rent Officers (Housing Benefit Functions) Amendment Order 2010 No. 2836<

Report from the Social Security Advisiory Committee (SSAC) -" Local Housing Allowance restrictions should not go ahead"<

thanks to for some of the content.

kevin's picture
Joined: 09/03/2009
John's picture
Joined: 09/03/2008

HB/CTB Circular A25/2010 provides guidance on the Housing Benefit (Amendment) Regulations 2010 and the Rent Officers (Housing Benefit Functions) Amendment Order 2010 that, from April 2011 -<


All HB/CTB guidance is available from the DWP click here.<

John's picture
Joined: 09/03/2008

Housing Benefit<


Asked by Baroness Thomas of Winchester<

To ask Her Majesty's Government what guidance will be issued to local authorities in the use of direct payments to landlords where the local authority considers this may help a tenant secure, or keep, a tenancy.[HL4918]

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud): Early next year, we will be providing local authorities with guidance on the amendment that we are making to the housing benefit payment provisions.

Asked by Baroness Thomas of Winchester

To ask Her Majesty's Government whether it will be a condition of direct payments to landlords in the private rented sector for them to lower their rents.[HL4919]

Lord Freud: From April 2011, in cases assessed under the local housing allowance arrangements, local authorities will be able to pay housing benefit direct to the landlord where they consider that it would help the customer to secure a new tenancy or remain in their current home. It follows that the rent must be at a level that they can afford. We will work closely with local authorities to ensure that this provision is used in very specific circumstances where landlords are reducing rents to a level that is affordable for customers.

A number of other circumstances in which benefit is paid direct to landlord remain unchanged-for example, if the tenant is in arrears of eight weeks or more or the local authority considers that the tenant is unable or unlikely to pay their rent.

Asked by Baroness Thomas of Winchester

To ask Her Majesty's Government what assessment they have made of the number of local housing allowance (LHA) claimants who will now be offered nine months' transitional protection following the decision to reduce LHA to the 30th percentile earlier than expected in April 2011.[HL4920]

14 Dec 2010 : Column WA171

Lord Freud: We estimate that the transitional protection will be beneficial to around 68 per cent of housing benefit customers (over 600,000 at March 2010) who see a reduction in their eligible rent when their local housing allowance rate is reviewed on the anniversary of their claim falling on or after 1 April 2011. Some customers will not get transitional protection if they move or a change in their household means that they become entitled to the local housing allowance rate for a smaller property.

kevin's picture
Joined: 09/03/2009

Housing Benefit reforms continue as extra funding is given to Local Authorities

Restoring fairness to the Housing Benefit system and providing extra support for those who need it is a top priority, Lord Freud said today as he announced the first allocation to local authorities of an extra £130 million transitional fund set up to help those affected by the reforms.

In consultation with the Local Authorities Association, £30 million has today been allocated through the Discretionary Housing Payment Fund with over £8 million going to London, £2.5 million to Scotland, £1.5 million to Wales and £17.5 to the rest of England.

The fund, which Ministers have already boosted by £10 million, will give local authorities the flexibility to help the most vulnerable customers who might face a shortfall in rent because of the changes to Housing Benefit rules from April 2011.

Minister for Welfare Reform Lord Freud said:

"The current way that housing benefit is administered is unfair and the changes we are making strike the right balance that is both fair to the taxpayer and those on Housing benefit.

"It's wrong for anyone to suggest that many people will become homeless because of our housing reforms – the Discretionary Housing Payments are there to provide a safety net for those who need it.
“This year’s fund has already received an extra £10 million in funding, and we will triple Discretionary Housing Payments over the next three years to £60 million."

A further £50 million will be allocated over the next four years which will go towards providing housing advice, helping local authorities work with landlords and tenants on renegotiating rents, or where needed helping with the cost of moving.

Ministers are keen that landlords from the private rental sector work with local authorities and tenants where appropriate to agree to reduce their rents in return for direct Housing Benefit payments.

This will mean that they reduce their rents to a level that is affordable to the tenant. In the majority of cases this will be the Local Housing Allowance rate.

In return landlords will receive a guaranteed income which will address their concerns about non-payment from Housing Benefit claimants and improve their credit ratings. This incentive will also bring an overall downward pressure on rents in the private sector, resulting in more properties becoming available to those on Housing Benefit.

Notes to Editors:

The impact of the recommended option on the LAs is below.

  • East Midlands £1,270,098
  • Eastern £2,203,059
  • Greater London £4,159,705
  • Inner London £4,021,349
  • North East £866,262
  • North West £2,986,408
  • Scotland £2,676,839
  • South East £3,797,937
  • South West £2,236,504
  • Wales £1,422,995
  • West Midland £2,345,663
  • Yorks and Humberside £2,013,181
  • Discretionary Housing Payments are only available to people who are entitled to Housing Benefit or Council Tax Benefit.
  • These payments are intended to make up shortfalls in entitlement to benefit where the local authority considers that the person concerned is in need of further help with their housing costs.
  • We are providing additional funding totalling £190m to smooth the transition over the spending review period: £130m Discretionary Housing Payments.<

kevin's picture
Joined: 09/03/2009

Housing Minister Grant Shapps has fired the starting gun on a council housing revolution that for the first time puts councils and communities in control - allowing them to make long term plans to offer a better deal to England's four million council tenants.

Under this new localist approach councils will have the tools and incentives to more effectively manage their housing stock over the long term, they will be free to make their own decisions about housing assets and through greater transparency tenants and local taxpayers will be better placed to hold their landlord to account.

The Minister today published details of the new financial deal for council housing - a key measure of the Localism Bill currently before Parliament. This includes a detailed description of how each council's opening financial position will be determined and the process for implementing these reforms in April 2012. By providing councils with clarity on funding for the future they can now begin detailed preparations on how they plan to better meet the housing needs of their communities over the long term.

This new approach, developed in partnership with local government, will bring an end to the Housing Revenue Account subsidy system where councils were required to pay council rents to Whitehall which decided how to redistribute it meaning they had no certainty about future income, no ability to plan long term and little incentive to be more efficient.

The new self-financing approach puts councils firmly in control with the tools and incentives they need to manage their housing stock over the long term rather than on a year by year basis. This will be achieved by a one-off adjustment to each council's housing debt after which councils will retain all the rental income they collect. And they will be free to make decisions about their housing assets without first having to get permission from Ministers in Whitehall.

By introducing a direct link between rents councils charge, the money they spend and the services they deliver tenants and local tax payers will be better able to hold their landlords to account. Councils will now for the first time be able to make information about how money is raised and spent publicly available in an easily accessible format. This will include how landlords are improving value for money to their tenants and local tax payers.

The deal includes an extra half a billion per year for councils to spend on their housing stock and extra £116 million funding for councils to pay for disabled adaptations to homes. In total, funding for management, maintenance, repairs and adaptations under the new approach will be 14 per cent higher than under the current subsidy system.

The Localism Bill, that begins its Committee Stage in the House of Commons today, 1 February 2011, includes these measures to repeal the existing subsidy system and replace it with powers for the Secretary of State to introduce self-financing.

Grant Shapps said:

"This deal brings to an end a centralised system which meant councils didn't know what funding they would get for housing from one year to the next and were unable to take key decisions about their housing stock. It prevented them from delivering the best possible services for their tenants in the most efficient way.

"I am setting councils free to better meet the needs of their tenants. Today I am outlining these new freedoms as well as how each council's opening financial position will be calculated. By giving them clarity on their future revenue and the freedom they have to decide what is best in their local area they can now start preparing for this council house revolution that will begin next year. They now have the tools and incentives to radically overhaul the housing services they provide and deliver better value for money.

"And by putting councils in control and making the decisions they take more transparent tenants and local tax payers will be better placed to hold their landlords to account."

Notes for editors


The department has published a policy document on the future financial arrangements for council housing entitled 'Implementing Self-financing'. This is accompanied by:

i. A model which applies the settlement methodology to local authority data to provide indicative figures per council
ii. A user guide to accompany this model
iii. A report on the model inputs, assumptions and outputs

These reforms only have implications for each stock-retaining local authority's ring-fenced Housing Revenue Account, and will not impact on their general finances, or on other local authorities. Chapter 5 of 'Implementing Self-financing' has more information on the arrangements which keep money for housing separate from money spent on other services.

Abolition of the subsidy system does not end the requirement for local authorities to maintain a statutory, ring-fenced Housing Revenue Account. Local authorities will still be required to account to their tenants for income from and expenditure to council housing separately from income and spending on other functions and services. This ensures that council taxpayers do not subsidise services specifically for the benefit of tenants and that rent is not used to subsidise functions which are for the benefit of the wider local community.

The overall methodology

Valuations will be based on assumptions about each local authority's income and need to spend over 30 years. Assumptions about income will follow from the Government's social rent policy. The assumptions about expenditure needs will reflect evidence commissioned by Government in 2009 and 2010 about the costs of managing, maintaining and repairing the stock. This 30-year cash flow of income and expenditure will then be converted into a capital sum using standard discounted cash flow techniques.

The self-financing valuation will assume that local authorities will follow national social rent policy, which comprises a number of different components:

(i) A 'formula rent' for each property, based on property values, property size and local earnings. Over time, all social landlords are expected to move their rents in line with this formula. At present most housing associations set rents at or close to the formula level, but council rents were on average approximately 8 per cent below this in 2010/11.

(ii) A 'guideline rent' which converges with the formula rent by 2015/16. The valuation will assume convergence with formula rents by 2015/16, followed by rental increase of just above inflation year on year - set at the Retail Price Index + 0.5 per cent per annum.

(iii) A limit on individual rent rises of RPI + 0.5 per cent + £2 each year. This cap prevents excessively high increases in the rents of individual properties as they are moved over time to the formula rent. An estimate will be made for each landlord about the number of tenants whose rents could not move to the formula by 2015/16 without breaching this element of rent policy. The assumed income in the valuation will be reduced by this amount.

The spending needs built into the valuation are based on independent research about actual unit costs (by BRE, HQN and PwC) which are significantly higher than those under the present subsidy system. This approach to costs will give all local authorities more money to spend on managing, maintaining and repairing their stock than under the current system. In aggregate this works out at an increase to £545 million per year for 30 years or a national average Major Repairs Allowance of £956 per dwelling per year and average management and maintenance allowances of £2,061 per dwelling per year.

The assumed rents and costs will be used to produce a notional 30 year business plan of income and expenditure for each local authority landlord's business. This will be converted into a stock valuation using standard discounted cash flow principles, using a 6.5 per cent discount rate.

In order to calculate the payment to or from Government, the valuation will be compared with the notional amount of housing debt supported by Housing Revenue Account subsidy. If the valuation is higher than this assumed debt figure, the local authority will be required to pay Government the difference. If the valuation is lower, the Government will pay the difference to the local authority. Payments from central Government will in most cases not go to local authorities directly, but will be used to redeem debt held by the local authority.

The key figure

The key national figures are:

  • the estimated aggregate value of local authorities' housing businesses in 2012 at a discount rate of 6.5 per cent is £28.138 billion
  • the forecast for national Housing Revenue Account debt at April 2012 is £21,428 billion
  • the forecast receipt to the Exchequer is £6.711 billion.

For more information on these national figures including how the valuation, debt levels and receipt have altered since the figures published in March 2010 consultation see Annex A of 'Implementing Self-financing'.

The existing system

The existing subsidy system will continue unchanged for 2011/12.  Arrangements for this year are contained in 'Implementing Self-financing'.<

John's picture
Joined: 09/03/2008

130,000 families face £475 unemployment penalty

7 February 2011

More than 130,000 hard up households will suffer an average annual cut of £475 from their housing benefit payments if they are out of work for more than a year – despite the fact that claimants will have already proved that they have been actively looking for a job throughout that period, the National Housing Federation warned today.


As part of the Government’s radical overhaul of the benefits’ system, people who claim jobseeker’s allowance for 12 months will have their housing benefit automatically cut by 10% - leaving unemployed households to make up the shortfall in their rent.


The University of York, in a report commissioned by the Federation, estimates 133,000 unemployed households in England will be affected by the cut. The figures are released ahead of the publication of the Welfare Reform Bill, which will set out how the government plans to significantly reduce the country’s overall benefits’ bill.


The Federation, which represents England’s housing associations, fears the policy could plunge thousands of jobless families into poverty, debt and even force them out of their own homes as they struggle to make up the shortfall in rent following the cut.


In some of the most deprived areas of the country there are 45 claimants for every job vacancy - meaning the chances of finding work after a year locally is remote. Nationally, there are 6.7 claimants for every vacancy.


Claimants will be penalised regardless of the state of the local jobs market and how hard they have tried to find work.


And with the Government looking to move large numbers of people from incapacity benefit onto jobseeker’s allowance as part of its drive to cut the country’s benefits’ bill – the number of people who will be forced to pay the £475 penalty is likely to be far higher than 130,000.


The average current weekly housing benefit payment for someone also claiming jobseeker’s allowance is £91.35 But under the measure, which is due to be introduced in April 2013, those people would have to find an extra £9.14 to cover the shortfall. Over a year this would total an average of £475.


For those claiming the maximum housing benefit for a four bedroom home, that penalty would be £2080 a year, and £1768 a year for a three bed.


The Federation estimates that a single claimant 25 or over would be left with just £56.31 a week to pay for all their household bills, food and transport costs – if they were forced to make up the 10% shortfall in their rent.


Those aged 16 – 24 would be left with £42.71 a week if they have to make up 10% of their rent.


Liberal Democrat Deputy Leader Simon Hughes has publicly criticised the policy and led a backbench revolt against the plan when he voted against introducing the 10% cut following a Commons debate last year.


Despite losing the vote, there remains significant opposition to the proposal from Liberal Democrat MPs who remain optimistic that it could still be ditched.  


Federation chief executive David Orr said: 'With unemployment high and the outlook for the economy bleak, the Government should not penalise the poor and vulnerable for failing to find work when there simply aren’t enough jobs to go round.


'There is no logic to cutting housing allowances for people who fail to find work.  The present system allows for cuts to be made to job seeker’s allowance for those who refuse to work. 


'To reduce the housing allowance for those out of work means punishing people for failing to find a job in a very difficult job market.


'The proposal is unfair, unjust and will heap further misery onto households already under huge financial pressure. People should be encouraged into work, but threatening the homes of those who are unemployed isn’t the right way to go about it.'




top 5

Claiming JSA

for over 12 months

December 2010


Constituency 2010

1. 1,060 Birmingham, Ladywood
2. 1,500 Birmingham, Hodge Hill
3. 1,345 Tottenham
4. 1,320 West Ham
5. 1,300 Kingston upon Hull North


Vacancies to claimants ratios - 5 highest



JSA claimants

to vacancies






Constituency 2010

Average 6.7 439 2,180  
44.7 102 4,559 Kingston upon Hull North
34.5 189 6,524 Birmingham, Hodge Hill
29.8 127 3,780

Islington North

29.4 160 4,700

Hackney North and

Stoke Newington

28.8 110 3,171 Leyton and Wanstead

Written By: helenj<  Date Posted: 07/02/2011 09:53

John's picture
Joined: 09/03/2008

Shelter the Housing charity provides good information on the changes to Housing Benefits namely the Local Housing Allowance.  You can find information for England on the changes to Local Housing Allowance (click here) <and Discretionary Payments (click here)< otherise for Scotland go to

We have been alerted by THT that those in the private rented sector are seeing the new changes applied and will need to be aware and make a claim to there local council for a Discretionary Payment to help with their rents moving forward.

I would also stress that with all the changes broadly, we need feedback from those affected to build the evidence base as to how this is affecting those living with HIV/AIDS.

You can comment on forums< here, email in confidence< or alternatively get in touch with your local HIV support network or THT</NAT<.

We need to make sure we make the case with actual experience evidenced.

Of course we would always encourage you to engage with your local councillors and MP to ensure your needs locally are not forgotten and moreover maintained to support you.

kevin's picture
Joined: 09/03/2009

Steve Webb< (Minister of State (Pensions), Work and Pensions; Thornbury and Yate, Liberal Democrat)

My hon. Friend, the Under-Secretary of State<, responsible for welfare reform, Lord Freud of Eastry, has made the following statement.

The Government announced in last October's comprehensive spending review that it would extend the housing benefit shared accommodation rate to people under the age of 35 from 2012. This rate currently applies to people under the age of 25 and reflects the costs of renting non-self-contained accommodation in the private sector where the tenant has exclusive use of a bedroom but shares other facilities such as a bathroom.

We intend to bring forward these changes by three months so that they start to take effect from January 2012.

The local housing allowance reforms, to be introduced from this April, cap the level of payments to a maximum of a four bedroom rate and reduce local housing allowance rates so that they are based on the 30th percentile of rents rather than the median. They also introduce overall caps on the rate of local housing allowance for one, two, three and four-bedroom accommodation. Existing customers will be given up to nine months transitional protection from these reforms starting from the anniversary date of their claim.

By introducing the shared accommodation rate changes slightly earlier, this will bring the timing of the shared accommodation rate change more closely into line with the local housing allowance reforms for existing customers. It will ensure that single people aged 25 to 34 reaching the end of their transitional protection period will experience at that point a single reduction in their housing benefit, rather than two separate reductions.

That is why we have decided to bring forward the shared accommodation rate changes. We will publicise these proposed changes through appropriate channels to make sure that those affected are aware of them in advance.<

also refer<

anonymous (not verified)
anonymous's picture

From April 2012, the system of local authority housing finance (known as the housing revenue account, or HRA) will undergo the most significant and far reaching change since the war, and will be devolved to local authorities to manage themselves. Authorities which own housing stock will gain full control of their housing income and expenditure and be able to make their own decisions on how and in what way they invest in tenants' homes. If they wish, they will even be able to build new homes using surplus rental income.

The reform of the HRA has been a long process. The previous Labour Government consulted on HRA devolution and moved towards it, but did not implement it. The Coalition Government confirmed in February 2011 that it was going ahead with HRA devolution from April 2012, a move for which there was broad cross-party and sector support.

In return for being able to manage their own HRAs, the 171 stock-owning local authorities have been allocated a share of the national housing debt, totalling some £28bn.  London's boroughs have fared relatively well in this settlement, being allocated £5.5bn of debt, some 25% less than estimated was originally owed.

In addition, local authorities have had a ceiling placed on their ability to borrow against the rental income that they will now receive in full. This is because local authority borrowing counts as part of the Public Sector Borrowing Requirement (PSBR) and thus counts as part of the national debt, which the Government is keen to reduce. 

'From Self-Financing to Self-Determination' - London Councils research into post-April 2012 HRA options

 Opens in a new window<London Councils commissioned Navigant Consulting to work with us to see what the options are for London's boroughs to use the new freedoms post-April 2012 to invest in stock.

In November 2011 London Councils published the result of this work, and both the full report and the Executive Summary can be accessed below.

The report sets out a range of options that boroughs can do, either on their own or by cooperating with other boroughs.  These range from developing robust active asset management strategies to different models enabling the trading of headroom capacity and joint HRA-funded development. 

The options set out in the report are just that - options that individual boroughs may or may not wish to take forward. However, we hope that the report acts as a useful framework to help boroughs develop their thinking in this area.    

related documents<

anonymous (not verified)
anonymous's picture