Tory cuts to Discretionary Housing Payments are reckless and cruel

By Cllr Seema Chandwani

The levels of housing rent arrears are rising, rapidly. When the eviction ban is lifted in September, we will see a tsunami of homelessness across the country. The Government’s response to this is not only lacking: it is contributing recklessly to making the situation worse.

One tool which councils have to prevent some evictions is Discretionary Housing Payment (DHP), a fund from Government which local authorities can use to prevent homelessness. It can be used to pay towards rental debt, as a deposit for a more affordable property or to pay the shortfall in rent not covered by Universal Credit or Housing Benefit due to the cap for example. 

It was hoped the Government would extend DHP in the coming years and increase the allocation so councils could formulate a COVID Rent Crisis fund, supporting the growing numbers of people facing rent arrears and preventing homelessness. DHP has some limitations, for example, it is only available to those on Housing Benefits or Universal Credit, but with some tweaking, it could have been a vital lifeline for many people.

Instead, it has decided to cut Discretionary Housing Payment. 

This month the Government allocated its DHP budgets to local authorities cutting it by a staggering 45% from last year. In a borough like Haringey, it is close to a £1m loss. The Government has retained £40 million to be allocated in autumn, unusual as DHP is normally allocated in full at the start of the year. But even with this second allocation, the overall DHP budget is £13m less than 2019/2020 – prior to the pandemic. 

Whilst the Government last year did give councils extra DHP allocations due to the pandemic, it has decided the need is no longer required – despite all the data, statistics, estimates and forecasts. 

Councils across the country will be facing unprecedented demand as the economic aftermath of COVID starts to hit. The withdrawal of furlough and the lifting of the eviction ban will be devastating to millions. 

The London School of Economics estimates 30,000 additional households will turn to local authorities for temporary accommodation. This will stretch councils already facing the strain of housing needs to breaking point.

We already have a housing crisis. We cannot ‘build back better’ if the Government is making such reckless and cruel decisions with the little support available. The Government must rethink this cut. It is a false economy which will lead to costing the country billions in reactionary measures for such a small investment in prevention.

Cllr Seema Chandwani is the Cabinet Member for Transformation and Public Realm Investment for Haringey Council.

Image: https://www.elliotcolburn.co.uk/news/renters-reform-bill, licensed for reuse.

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