Why aren't councils claiming millions in DHP funds to help homeless tenants?

Published by 24publishing for 24dash.com in Housing and also in Finance, Local Government

Last month, it was reported that Westminster City Council (WCC) was offering homeless families accommodation as far away as Bletchley - 54 miles away.

In these austere times, and with homelessness on the increase, such drastic situations are sadly becoming more common. However, could the council have done more to help?

24dash has seen the results of a Freedom of Information request obtained by Landlord Information Network which shows that WCC was last year (April 2011-2012) offered £1,104,144 in Discretionary Housing Payments (DHP) funding, but only spent £397,545. This leaves £706,599 unspent, or 64% of the funds available to it.

The question this naturally raises is: why would a local authority fail to spend money that is freely available to it, especially a council that has resorted to offering some of its homeless population accommodation many miles away?

DHP funds are made available to people claiming housing or council tax benefit but who are having difficulty paying their rent.

Though WCC was the biggest under-spender of DHP funding last year, it wasn't the only local authority to do so. In total, £7,892,114 of a £30m pot was collectively left unclaimed and unspent by the councils across England, Scotland and Wales.

WCC’s explanation for the enormous under-spend is as follows: "The council did not spend all of the government contribution for 2011/12 because the decision to grant existing benefit claimants transitional protection for nine months meant that households who did not change address were not affected by the caps until January 2012 at the earliest.

“As a result, the council did not see any increased demand for DHP until the final quarter of 2011/12. This was highlighted to the government who allowed the council to carry over the DHP under-spend from 2011/12 to 2012/13.

“Up to September 2012, the council has spent 46% of the DHP funding and is forecast to spend 100% by the end of the year.”

Brent Council, which spent only £165,703 of its £539,188 DHP share last year, gave a similar explanation: "Brent Council was awarded discretionary funding to help with the transition during the introduction of caps and other restrictions on housing benefit payments in 2011-12.

"However, subsequent to allocating the discretionary budget, the government also awarded transitional protection from the caps to all existing claimants, which delayed their impact for at least nine months. This in effect removed the necessity to assist those benefit claimants during 2011/12 2011. The government also signalled its agreement for authorities to carry forward their discretionary funding into 2012/13."

The Department for Work and Pensions (DWP) - which is responsible for the administration of DHP funds - when questioned as to why councils had failed to spend free money on homeless families, said much the same thing. A spokesman told me that a decision was made last year to allow councils to carry-over any unspent DHP funds into the next year. Many had decided to do this, he added, as a strategy to face the planned benefit changes.

However, Claire Turner, Director at Landlord Information Network, believes that the real reason that so many councils have failed to spend the DHP funds available to them is that they may not have the staff to cope with processing the increased number of claims and that, historically, the DHP fund has not been publicised very well.

Turner, whose company, Landlord Information Network, originally obtained the FOI request that 24dash has seen, said: "Housing benefit services are being scaled down in preparation for Universal Credit (UC). The increased number of DHP awards that all councils will have to make to spend all the money available to them would mean they would need more staff.

"But able staff are leaving housing benefit departments in preparation for UC. Many are getting new jobs, believing that their present jobs will come to an end when UC arrives."

Turner added that knowledge of DHP funding amongst social housing sector landlords is very poor. Landlord Information Network offers benefit related training courses to both private and social sector landlords, including DHP workshops. Tuner said: "Landlords often just don't realise that their tenants are entitled to it. Particularly amongst social sector landlords, the knowledge just isn’t there”

Either way, WCC, despite its explanation, has apparently been forced to offer its homeless families distant accommodation. In light of this, the huge under-spending seems particularly tragic. As quoted above, WCC forecasts that it will have spent 100% of its funds by April 2013. However, we will not know if this is the case until June next year, when figures will be published to find out how much the council actually spent.

In the meanwhile, Westminster’s homeless continue to struggle.

Max Salsbury is a reporter for 24dash