Thousands of households are going to find it difficult to cover their rent as the cost of living crisis bites. Image: Ethan Wilkinson / Unsplash
The fund for local councils to help people who can’t afford their rent and housing costs is being cut by £40m.
Discretionary housing payments are available to anyone who receives housing benefit or covers their rent through universal credit.
In 2021/22 councils were able to access a pot of £140m to help people with their rent and prevent them from falling into homelessness.
But for 2022/23 there will only be £100m for local authorities to distribute – a fall that comes as the cost of living crisis means surging inflation and energy bills will leave households struggling to pay rent.
“With rents already increasing and set to rise even further, many tenants will be left with unsustainable shortfalls that leave them at risk of eviction and homelessness,” said Marc Francis, director of policy and campaigns at anti-poverty charity Zacchaeus 2000 Trust.
“This is the worst possible time for the Department of Work and Pensions to have cut its funding for discretionary housing payments by another £40 million. It will force local authorities into invidious choices between helping disabled tenants affected by the bedroom tax and families hit by the benefit cap. No wonder it wasn’t publicised.
“Z2K hopes that, even at this late stage, the chancellor will find some extra money to reverse this cut.”
A DWP spokesperson said a rise in local housing allowance brought in at the start of the pandemic means that there is less need for DHP funds.
“This government is working across the country to help people with their housing needs, and is spending over £2bn to tackle and prevent homelessness and rough sleeping over the next three years,” the spokesperson said.
“The change in discretionary housing payment funding also reflects the rise in Local Housing Allowance brought in at the start of the pandemic, which we are maintaining, and government spending on housing support remains higher than pre-Covid-19 levels.”
But homelessness charities have warned not enough support is in place to prevent people from losing their homes as costs mount.
Last week Crisis warned almost 70 per cent of low-income private renters in England will be forced to go without food and heating at least one day per week to meet rising housing and living costs.
The charity said that freezing local housing allowance (LHA) at a time when DHPs are also falling means tens of thousands of people could fall into rent arrears and facing eviction.
“It’s deeply shameful that struggling renters will be forced to go without food and heating for several days in order to keep a roof over their head,” said Matt Downie, Crisis chief executive.
“Increasing housing benefit so it covers the true cost of rents would be the quickest and most effective way to keep people in their homes. We cannot idly stand by and watch all the progress made to tackle homelessness during the pandemic unravel and why we’re urging the UK government to reverse this cut before it’s too late.”
Centrepoint, too, has raised alarm about the issue ahead of the Spring Budget. The youth homelessness charity found that LHA only covers the full cost of the cheapest 25 per cent of private sector room rent as intended in one in eight local authority areas across England.
“If it made sense to ensure the local housing allowance keeps pace with the lowest third of rents two years ago – it surely does now with all the additional challenges those who need this support are facing,” said Balbir Chatrik, director of policy at Centrepoint.
“We cannot expect them to make up shortfalls in local housing allowance themselves. Local housing allowance rates must be urgently reviewed to ensure those already choosing between food and bills are not also facing homelessness too.”
Your local vendor is at the sharp end of the cost-of-living crisis this Winter. Prices of energy and food are rising rapidly. As is the cost of rent. All at their highest rate in 40 years. Vendors are amongst the most vulnerable people affected. Support our vendors to earn as much as they can and give them a fighting chance this Winter.