The LHA rates are set by individual local authorities working out a median figure of the lower 30% of market rents within their boundaries meaning that the LHA rate varies between local authorities. The amount of LHA paid is also inclusive of service charges.
The impact to tenants would mean that many would be unable to cover their rent payments or pay for the services they receive from providers (especially supported housing).
Providers, in turn, would have difficulty recovering the rents and service charges as a result of the tenant’s affordability issues. As a result, Providers have held back on new schemes that these issues might affect, and have prepared for changes to the services they provide with a view that they will only provide those services that are truly essential and affordable.
Following extensive lobbying and campaigns, the Government announced on 25 October 2017 that they will no longer apply the LHA cap for supported accommodation and the wider social housing sector as a whole. Given the highlighted issues, it has a huge impact.
It is important to note though that the overall benefit cap (currently £23,000 for those inside Greater London or £20,000 for those outside Greater London) remains.
The Government has followed up the announcement by introducing two consultations; one on housing costs for sheltered and extra-care accommodation, and one on housing costs for short-term supported accommodation.
The proposals put out to consultation are to split supported housing into three broad groups (long-term support; short-term and transitional support; and sheltered housing and extra-care support). The consultation also proposes different funding streams for each category of supported housing would use (through the current welfare system; local authority funding; or through a new ‘sheltered rent’ payment that would be introduced as part of the welfare system).
Having removed the LHA cap though, the consultation includes discussion on a new “Sheltered Rent”. So the LHA announcement on its own is unlikely to kick-start the (very many) stalled extra-care housing developments.
Vital short-term accommodation is needed as efforts increase to tackle homelessness. Ring-fenced grants received by the local authority will provide funding for short-term accommodation. This payment will cover all the housing costs (including rent and eligible service charges).
The new funding regimes for supported housing are due to be effective from April 2020.
Both consultations will close on 23 January 2018; you can see the full consultation paper here.
If you have any queries regarding the above, then please contact Zishaan Saleem.
Under most construction contracts, the contractor takes on the ground conditions risk. However, a recent case has demonstrated that the risk can fall on the employer.
The UK Government has been consulting on how it should promote social value in its procurements. Here is our response that we submitted to the consultation...
The Tenant Fees Act 2019 came into force on 1 June 2019.
A recent case in the Court of Appeal will no doubt bring a sigh of relief for employers, but a corresponding sigh of disappointment may be uttered for equality and gender balance in the workplace.
This briefing assists response to the consultation paper by outlining the consultation questions, providing some background information and prompting some thoughts and potential answers.
A report published on 29 May by the Institute for Fiscal Studies (IFS) has found that since 2009-10, local government spending on services has fallen on average by 21% in real terms.
A long-awaited decision of the Court of Appeal has clarified that a lower standard of proof should apply than previously thought before an Inquest can return a conclusion of suicide.
New regulations come into force on 1 June 2019, amending the Section 21 (s21) prescribed form template for use with assured shorthold tenancies.
In a challenging economic climate with continuing budget cuts and increasing expectations of staff, sickness absence remains an ongoing problem that is important to address.
Social housing providers will routinely have a number of construction projects underway at any one time. It is essential for client teams to understand and avoid key contract management pitfalls.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.