Latest Public Sector News

02.03.16

Housing benefit cap suspended for supported accommodation

The controversial housing benefit cap for supported accommodation will be suspended, but housing association representatives are still calling for it to be scrapped altogether.

Lord Freud, the minister for welfare reform, announced in a written statement to Parliament that supported accommodation rent will gain a year-long exception from local housing allowance rates until April 2017.

Over 40% of the organisations affected, including women’s refuges, dementia accommodation and veterans’ services, were risking closure under the cap.

Lord Freud said: “I am doing this because I understand the importance of ensuring that both those living in supported accommodation and those who provide this type of accommodation receive appropriate protections.”

The exemption will also apply to alms houses, housing co-operatives and community land trusts.

Lord Freud added that the government is currently awaiting the result of a review of a supported accommodation research project – announced after a 1% social rent cut was also deferred by a year for the sector – before deciding what action to take beyond April 2017.

He said he would write to social landlords with guidance on how to advise new tenants following the changes.

David Orr, chief executive of the National Housing Federation, said: “We are pleased that the government is listening to our concerns and has delayed the application of the LHA cap to people in a wide range of supported and sheltered housing. We are equally pleased that there will be a full strategic review into how these services are funded and we will contribute fully to that review.

“However, the continued threat that a crude LHA cap might be imposed in the future means substantial uncertainty remains. The best way to end the uncertainty is to remove that threat. The LHA cap should not be part of the outcome of the review and there must be long-term stability and security for the sector.”

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