How to target your Discretionary Housing Payments well

Policy in Practice
Webinar How to target your
Discretionary Housing
Payments well
Wednesday 23 October 2019

Housekeeping
• Audio check
• Please ask questions
• Poll and a survey
• Aim to finish by 11:30

Today’s speakers
Zoe Charlesworth
Head of Policy
Policy in Practice
Ellie Kershaw
Tackling Poverty
Programme Delivery
Manager
Tower Hamlets Council
Louise Murphy
Policy and Data Analyst
Policy in Practice

Agenda
• Background on discretionary housing payments and local authorities
• Use of discretionary housing payments in Tower Hamlets
• Poverty challenges and approaches to homelessness in Tower Hamlets
• Tools used to identify vulnerability, target support and track change
• Next steps

555
Poll: How well do you target your
Discretionary Housing Payment funding
now?

Background to DHP
What is a Discretionary Housing Payment?
The government (gov.uk):
“The government has given councils funding to give DHPs to people who have been
impacted by welfare reforms including:
• the benefit cap
• removal of the spare room subsidy in the social rented sector
• changes to Local Housing Allowance rates, including the 4 year freeze”
Guidance
“appear to the local authority to require some further financial assistance in order
to meet housing costs”

Regulatory overview
Discretionary Financial Assistance Regulations 2001 (S.I.2001/1167)
Amended by:
• the Council Tax Benefit Abolition (Consequential Provisions) Regulations 2013 (S.I.
2013/458)
• the Universal Credit (Consequential, Supplementary, Incidental and Miscellaneous
Provisions) Regulations 2013 (S.I. 2013/630)
• The Universal Credit (Miscellaneous Amendments, Saving and Transitional Provision)
Regulations 2018 (S.I. 2018/65)

Regulatory overview continued
• Regulations give LAs very broad discretion on spending allocations
• LAs have a duty to act fairly, reasonably and consistently
• LAs can use their own funds to top up their Government contribution (150 per cent)
• Once an authority’s overall cash limit is met, no additional DHPs can be awarded in
that tax year. Going above this limit breaks the law
• Any unspent DHP funding from the government contribution is returned to the DWP
at the end of the financial year
Different arrangements in Northern Ireland and Scotland

Characteristics of DHPs
• Available to tenants who claim housing benefit or get the housing element of
Universal Credit
• Administered by the local authority (England and Wales) and non-repayable
• Can be backdated to when UC or HB was awarded but not beyond regulation start
date 2001
• Not included in the benefit cap or in the assessment of income for other benefits
• Can be a one-off, eg to help pay a tenancy deposit or rent in advance for a new
home, but only if the person is already getting housing benefit or UC housing
support
• No right to appeal but Judicial Review and Ombudsman may be relevant

Characteristics of DHPs continued
• R v. Sandwell MBC, ex parte Hardy. Must have regard to the purpose of disability
related benefits and whether the money from those benefits has been committed to
other liabilities associated with disability
• No provision for repayment of overpayment from ongoing benefit
A DHP cannot cover:
• A shortfall due to overpayment recovery
• A shortfall due to a sanction

DHP limits
How much ?
Maximum amount for ongoing support is set out in regulation:
• Up to an amount calculated in accordance with Schedule 4 of the UC regs. This
determines the housing element of UC (BUT housing element is defined as after
LHA/bedroom tax – differs from DHP guidance manual)
• Up to maximum eligible rent (HB reg 12.1) excluding ineligible charges (12B (2)) but
not excluding LHA/bedroom tax (12B (1))
• Note R v. LB Lambeth, ex parte Gargett which sets out that any HB already paid
towards ‘housing costs’ must be deducted when calculating the amount
• DHP can be used for backdated arrears if the person was eligible at the time of the
arrears (LB Lambeth ex parte Gargett)
• No maximum for one-off payment

Funding
In 2019/20, the total DHP central government contribution for English and Welsh local
authorities is £139.5 million
DHP funding is allocated to LAs in respect of four funding streams:
1. Impact of the LHA
2. Impact of the bedroom tax
3. Impact of the benefit cap
4. Core funding based on overall HB expenditure
These are arrived at based on caseload and estimated impact of these welfare reforms.
Core funding is based on HB expenditure

Funding continued
• Spending review 2019 provided £40M additional funding
• BUT LHA gap to return to 30 percentile is £0.8bn (Shelter, 2019)

Funding continued
“It was never the intention that the additional funding for DHPs would mitigate the full
impact of reductions in housing benefit entitlement” Esther McVey, House of Commons
debate, 2014
“The total amount represents six per cent of the total savings expected from the
Housing Benefit reforms”
National Audit Office, 2013
• 98% of DHP funding allocated to local authorities in England for 2017/18 was spent
• 229 authorities spent less than their DHP allocation, with a total under-spend of
around £8.6 million

Challenges to allocation
Objectivity versus discretion
(Guidance Manual)
“A policy that is too rigid will effectively prevent you from exercising your discretion
properly in individual cases. This could make some decisions vulnerable to challenge by
judicial review”
but
“Decisions must be made in accordance with ordinary principles of good decision
making i.e. administrative law. In particular, LAs have a duty to act fairly, reasonably
and consistently”

Challenges to allocation continued
Budgeting of payments
Decision making should be consistent throughout the year (regulation)
but
Once an authority’s overall cash limit is met, no additional DHPs can be awarded in that
tax year. Going above this limit breaks the law

Allocation concerns
Work and Pensions Committee (2018) had some concerns about allocation of DHPs :
• “postcode lottery”
• variation in local authorities’ priorities
• some LAs are placing conditions on payments
Other concerns voiced by local authorities:
• Differences in applications between groups
• Data needed to provide proactive outreach

Key considerations
Consistency and also flexibility
Ensuring decisions are the same throughout the year
Ensuring all DHP is spent by year end
Fairness in allocation
• Identifying
• Targeting
• Supporting
• Tracking

Use of discretionary housing
payments in Tower Hamlets
Ellie Kershaw
Tackling Poverty Programme Delivery
Manager

Poverty in Tower Hamlets
48,000 households living in poverty in Tower Hamlets
of the borough’s older residents
living in income deprived
households, the highest rate of
pensioner poverty in England.
50%
of children in the borough living
in families below the poverty line
according to the HMRC.
31%
of all working age residents
receiving ‘out of work’
benefits get ESA, 11,950
residents
62%
of Bangladeshi households
claim Council Tax reduction
compared to an average of
33% for other households78%
in2 5

Key Poverty Challenges in Tower Hamlets
COST OF LIVING
IN-WORK POVERTY
45% of working-age Housing Benefit claimants are now in
work, compared to just 21% in 2009. 60% of Tax Credit
families are in employment.
Low wage growth and high inflation has created
significant pressure on low income households. For
example in TH, whilst 19% of households are considered
to live in poverty before housing costs, this number rises
to 39% after housing costs.
WELFARE REFORM
Already reduced available support to working-age claimants
significantly . Further welfare reforms likely especially roll-out
of Full Service Universal Credit, reduces non-wage income
risking a rise in poverty. IFS predicts increasing poverty up to
the 2020/21.

26
26
 12,860 households currently claiming UC, (as at May 2019)
 Final postcode went live in October
 765 Tower Hamlets Homes residents in receipt of UC with
an arrears balance of £891,785
 120 homeless households in temporary accommodation on
UC with a total arears balance of £420,000
Universal Credit

DHP budget
Year Annual Fund
2017/2018 £1,812,716
2018/2019 £1,598,822
2019/2012 £1,714963

Homelessness approaches
Year Approaches
2016/17 748
2017/18 587
2018/19 2483
2019/20 YTD 2201

Prevention of homelessness
Local DHP policy has been refined over the years
and assessment is based on 2 main principles:
1. Alleviation or avoidance of hardship
2. Prevention of homelessness
Considerations will include looking at:
• The cause of the problem
• How the problem can best be avoided/alleviated
• Will the provision of support lead to a
sustainable tenancy?

Issues
• Ensuring consistency of decision making
without fettering discretion
• Working with applicants and third parties to
promote the aims of the scheme and to ensure
they are met
• Working flexibly to deal with competing and
changing needs within a fixed annual budget
• How to support private tenants
• Difficult to report on how funding has been
utilised and the outcomes

Next steps
• Proactive identification of customers
through the dashboard
• Use of DHP module
• Ensuring use of calculator in
applications
• Measuring impact

323232
Poll: How do you award DHPs?

Identify households most in need

Calculate if DHP criteria are met

Engage through tailored support

393939www.policyinpractice.co.uk
Questions and answers

Next steps
• Download Universal Credit Roadmap
• Download LIFT Dashboard flyer
• Download Benefit and Budgeting Calculator flyer
Follow up email with this recording and slides, with links
Short 5 question survey now:
1. We value your feedback
2. Ask questions or clarifications
3. Request your own look at the software shown
4. Auto sign up to our next webinar: Designing effective data-led intervention
campaigns on Wed 13 November at 10:30 with Haringey Council and Luton Council

www.policyinpractice.co.uk
Thank you
Zoe Charlesworth
zoe@policyinpractice.co.uk
Ellie Kershaw
Tower Hamlets Council
Louise Murphy
louise@policyinpractice.co.uk
hello@policyinpractice.co.uk
office 0330 088 9242

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