Professionals urge caution over benefit reform roll-out

Last month, the government confirmed it would pursue its reform of
housing benefit, citing encouraging evidence from pilots of its
planned replacement, the local housing allowance.

Department for Work and Pensions junior minister James Plaskitt
told the National Housing Federation annual conference that the
allowance had cut processing times and was helping tackle

The allowance, which pays claimants a flat rate based on average
local rents for particular types of property, rather than paying
landlords a sum based on tenants’ actual rent, is meant to simplify
and speed up the system. Tenants will have the choice to move into
cheaper accommodation and pocket the difference or use some of
their other income to supplement the allowance if they want a more
expensive home.

The first nine pilots were launched in November 2003, followed by a
further nine in February 2004, with independent evaluation
monitoring the effects. However, early evidence of success is not
as clear cut as the minister suggested, while some on the
front-line also have their doubts about the reforms.

The interim evaluation report says the incidence of rent arrears
among the tenants surveyed is low. But another section of the
report says: “There is little systematic evidence to hand to
indicate what impact LHA may be having on the number of arrears

Benefit processing times are reported to have improved but
researchers say it is too early to attribute any decreases
specifically to the allowance.

Mike Barry, debt project manager for the Citizens Advice Bureau in
Blackpool, the first area to launch a housing allowance pilot, says
the scheme has empowered tenants and been well-implemented locally.
But he says the government has disregarded some of its negative

The most common problem he faces is people who do not want to be
paid directly because they are struggling with debts or fear the
money would be swallowed by an existing overdraft.

If the council is satisfied they are vulnerable the money will be
paid directly to the landlord, but Barry says some tenants who have
claimed alcohol or drug problems have been told to go to the doctor
to get medical evidence. “If you’re on income support you can’t
afford £35 to get a doctor’s letter,” he points out.

Barry expected problems from landlords, disgruntled at no longer
receiving their rents directly from the government, but says there
is no evidence yet to suggest they have pulled out of the local
rental market.

But, although the evaluation report says it is difficult to
“isolate the impact” of LHA on rent levels, Barry says many
Blackpool landlords have raised rents to match the allowance,
undermining tenants’ ability to shop around for the best

One landlord has even built the LHA level into his tenancy
agreement, so rents rise automatically with the level of the
allowance, he says.

Barry says the problems are just “niggles”, adding the situation
“is not as rosy as the DWP makes out”.

The view from Blackpool is consistent with comments made last week
from another pilot area by John Holmstrom, the deputy chief
executive of Brighton Housing Trust.

Holmstrom said the allowance was helping claimants access the
private sector because it was generously paid and well-administered
but suggested landlords were unhappy.

The final evaluation report on the pilots is not expected until the
end of next year, but despite the concerns and lack of conclusive
supporting evidence, the government has decided to plough on.

Legislation is expected in the next few months with a national
implementation target of 2008. But a DWP spokesperson says the bill
will only set out the framework for reform with the detail included
in later regulations – giving more time to consider the evidence
from the pilots.

Evaluation reports:

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