Money spent on hardship payments rises dramatically

By Local Democracy Reporter
Piers Meyler

THE amount spent by Essex councils on discretionary hardship payments (DHPs) has increased up to 52 per cent in a year, new figures have shown.

The payments are made to help with housing costs, with residents eligible if they receive housing benefit.

Brentwood has seen the highest increase in the discretionary hardship payments – from £66,901 in 2016/2017 to £102,328 the year after – an increase of 52 per cent.

Uttlesford has also seen some hefty increases in the amount of discretionary hardship payments – from 74,001 in 2016/2017 to 105,932 in 2017/2018 -equating to an increase of 43 per cent.

Among Chelmsford, Uttlesford, Epping, Braintree, Tendring, Colchester, Rochford, Harlow, Brentwood and Maldon, the amount paid out in DHP has increased by about 35 per cent in a year.

DHPs are available to people who are not receiving enough to cover their rent because, for example, of the Local Housing Allowance being lower than the rent in private rented property, the Housing Benefit being reduced, and the bedroom tax.

Chelmsford City Council has seen the amount of DHPs increase from 276,582 to 327,977 – an 18 per cent increase.

The council blames how local housing allowances are set by the Government, which is placing a significant burden on council tax payers.

The Local Housing Allowance, which is the maximum Housing Benefit that someone can receive, is set by the Government and is calculated by checking the private rents in the local area and ensuring that the maximum allowance is at, or higher than, the level of 30 per cent of those rents.

In theory, this means everyone on Housing Benefit can afford to rent.

However the area that Chelmsford is categorised under also includes other areas such as Braintree and Witham where rents are lower – producing a knock-on effect which means not many new lettings in Chelmsford are at or below the Local Housing Allowance rate.

A spokeswoman for Chelmsford City Council said: “The amount that we spend on Discretionary Housing Payments in a year is largely determined by how much money the Department for Work and Pensions allocates to us as a ‘Government contribution’.

“Local authorities like Chelmsford Council are allowed to spend up to two-and-a-half times their Government contribution – but any extra has to come from local taxpayers, so there’s a balance to be struck.

“Demand for Discretionary Housing Payments is continually rising. One reason for this is people finding that the cost of rented accommodation is considerably higher than the amount of housing benefit which can be paid out to them.

“This could happen for several reasons – because local housing allowance rates are lower than private rent charges, because of the spare room subsidy, benefit caps, or something else depending on individual circumstances.

“In 2017/18, we topped up the Government contribution, but did not quite spend the full amount that resulted.

“However, the amount that was paid out still reflected increasing demand for help with the shortfall between individuals’ housing benefit and rent.”

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