Housing benefit departments in Wales are failing to spend money allocated by the UK Government to assist people affected by the welfare benefit reforms, new research shows.
Discretionary Housing Payments (DHPs) are a non-devolved, locally administered fund paid to councils by the Department of Work and Pensions (DWP) to help with housing costs. The fund is set to increase considerably in Wales from less than £1m in 2010-11 to just over £2.5m in 2012-13 to help mitigate the impact of the welfare benefit changes.
Research by Shelter Cymru has revealed dramatic variations among local authorities both in levels of DHP allocations and in public access to the fund. The research is published on the day that the Assembly debates the effects of housing benefit reform in Wales.
Alarmingly, it finds that people in some of Wales’s most deprived local authorities – areas with the highest levels of unemployment and housing need – have the most restricted access to the DHP fund and that many local authorities are denying DHPs for deposits or rent in advance to people who are homeless, believing it to be against the DWP’s good practice guide.
The charity is now calling for urgent action to ensure that local authorities make full use of their DHP allocations. It also argues that there is a strong case for the DHP fund to be devolved, to allow for fairer allocations that more accurately reflect levels of need in different areas.
John Puzey, director of Shelter Cymru, said: “In the context of the cuts to housing benefit, DHPs are a drop in the ocean, but HB departments are doing a serious disservice to people in housing need if they do not make the best possible use of all resources at their disposal.
“The key word with this fund is ‘discretionary’. This is an opportunity for housing benefit departments to be proactive in helping people to manage changes to their circumstances caused by benefit cuts before they reach crisis point. It’s certainly not a time to be nitpicking over different interpretations of what constitutes a ‘housing cost’.
“All underspends go straight back to the DWP, so frontline housing benefit staff are not saving their authority any money by restricting access to DHPs. More worryingly, these underspends are then being taken as an indication of lack of need and result in lower allocations in subsequent years,” he added.
Local authorities in Wales have DHP pots of considerably different sizes due to an allocation formula that essentially means the more that HB departments spend, the more allocation they get.
If HB departments decide to top up the DWP allocation with their own funds (which they can do up to 2.5 times the allocation) then they get more the following year.
On the other hand, if they don’t spend the full DWP allocation they get a smaller amount the following year. Therefore, the size of the DHP allocation reflects the priority that HB departments have placed on making DHPs available to the public over a number of years, rather than the actual level of need in the area.
The three local authorities with the largest DHP allocation per HB claimant are Ceredigion (£24.47), Gwynedd (£19.24), and Cardiff (£15.24), while the three local authorities with the smallest DHP allocation per HB claimant are Wrexham (£4.06), Caerphilly (£4.46) and Merthyr Tydfil (£5.66).
John Puzey said: “Although DHPs are a non-devolved area, there are actions that the Welsh Government could explore to improve the situation, such as producing additional good practice guidance, incentivising local authorities to ensure they spend their full DHP allocations or by supplementing allocations to ensure a better settlement from the DWP in subsequent years.
“Ultimately, however, we should be asking whether it’s time for the fund to be devolved. The welfare benefit cuts are imposing greater costs on statutory services in Wales – if we are to respond effectively then we need as much flexibility and control over our resources as possible.”
