Councils spend £100m helping renters hit by benefit cuts

Local authorities across Britain spent almost £100m last year making up the rents of families affected by the bedroom tax and benefit cap, official figures have revealed.

Just over £14m was spent helping renters whose finances had been reined in by the £500-a-week benefit cap, while £83.5m was spent making up the rents of people whose benefits had been cut by what the government terms “the removal of the spare room subsidy”.

Many of the biggest spending councils were in Scotland, after the SNP-led parliament there in 2014 voted to provide the full funds to councils to use discretionary housing payments (DHPs) to undo the benefit cut for renters deemed to have a spare bedroom.

In England where extra funds were not on offer, 140 councils also spent all of or more than their entire DHP allocation including a handful which spent nearly twice as much.

Discretionary housing payments allow local authorities to help housing benefit claimants who face difficulty in meeting their housing costs. Central government has significantly increased its contributions to the scheme since 2011, when benefit reforms cut the income of many claimants.

But critics, including the housing advice charity Shelter, have said that the payments are a sticking plaster that barely holds together a creaking welfare system, and plans to further lower the benefit cap – and, eventually, DHP allocations – risk putting councils in the position of having more gaps to plug, with fewer tools to do it.

Councils which overspent on their allocation from Westminster have said that they did so as a political decision to ameliorate the effects of cuts to benefits.

The biggest overall spender on DHPs in the year ending March 2016 was Glasgow, which paid out £8.6m to needy households – more than five times its allocation from Westminster. It was followed by Edinburgh, which spent £4.5m – more than three times its allocation. The Scottish government made up the shortfall for both cities.

Outside Scotland, the biggest spender was Birmingham city council, which paid out more than £3.3m in DHPs, 8% more than its allocation, according to the figures released by the Department for Work and Pensions.

But many English councils chose to spend much more than their allocation from the DWP. Stratford-on-Avon – a Tory-led council – bust its budget by the highest proportion of any authority in England or Wales, spending two and a half times more than its DHP allocation. It was followed by Dudley, Gateshead, Runnymede and Derby, all of which spent about twice their allocation.

Dudley’s cabinet member for housing, councillor Gaye Partridge, said the council was planning a similar overspend for this financial year, in order to protect vulnerable tenants from homelessness.

Partridge said: “To date, we have received £673,000 from the government for 2016-17 to fund awards of discretionary housing payments following the national welfare reforms. We have made available a further £645,000 from housing funds to allow us to help people who we know are struggling to pay rent.

“In particular we are aware of high demand for funding from applicants with disabilities, particularly those affected by the bedroom tax. We will always try to help protect as many tenants from eviction and homelessness as we can, which is something we feel strongly about as a community council.”

Campbell Robb, chief executive of Shelter, said: “The fact that so many councils are seeing such high demand for discretionary housing payments shows the huge impact that welfare reforms and our drastic shortage of affordable homes are having.

“Thousands of struggling families have already come to us desperate for help as they battle against the double blow of sky-high housing costs and cuts to support. We’re doing everything we can to try and help people access the help available, but even then discretionary housing payments only ever put a temporary sticking plaster over the problem.

“To fix this crisis for good the government must commit to building homes that people on lower incomes can actually afford to live in, and in the meantime make sure families get the support they need to keep a roof over their heads.”

A DWP spokesman said: “We work together with local authorities to make sure they get the funding they need, and it’s welcome that the majority of councils have spent less than their full allocation.

“Local authorities are best placed to understand the needs of their residents, which is why we will have made available over £1bn by 2020 to support those transitioning to our reforms. Councils can also provide additional support if they choose to.”