Three housing associations have done their own trials of the government's new idea of paying housing benefits directly to the tenants, rather than to the landlord. In all three cases, rent arrears rocketed.
So it's not surprising that the sector's response to plans to introduce this system across the board – confirmed by Department of Works and Pensions minister Chris Pond again this week – is leaving many nervous, if not totally horrified.

The plan – still some way off, for it will not be introduced before rent restructuring has had a levelling effect by 2010 – is designed to empower tenants and make the housing benefit system more straightforward. By publishing a flat-rate local housing allowance and phasing out the direct landlord payment, ministers argue that they are putting tenants in charge of their own finances. So far, so laudable.

But what of the fears? The new system of payment is officially being tried out in 10 local authorities for people living in private accommodation. Given that these trials have shown no sign of escalating arrears, could social housing landlords be fretting over nothing? Many social landlords argue that since the pilots have been running only since October, it is far too early to judge. They also want the government to recognise that the two worlds are not entirely comparable. There are far more vulnerable people housed by associations and councils, and not all of these will be exempt from the new system.

There are myriad concerns about just how it will work in practice – from the impact of the new allowance on pensioners to the process of receiving cash. As Shelter points out, one in six of the poorest households have no access to bank accounts. With lenders getting jittery too that anything that leads to greater debt is likely to drive up the cost of borrowing, the government must listen carefully. It should also take the Council of Mortgage Lenders' advice and start introducing pilots in the social housing sector as soon as possible – even if they have to delay the flat-rate allowance component. That way social housing providers can be proved wrong or problems can be ironed out – or the proposal rethought altogether.

… and benefits taken away
Tomorrow, 10 more countries will join the EU and the hysteria is mounting. No doubt Tony Blair's pledge this week, to restrict access to homes and benefits for new people coming to Britain, will win votes. But for local authority housing departments it represents another rushed-out policy that brings with it more unnecessary bureaucracy and badly drawn-up guidance.

The restriction applies to eight of the new EU countries and stipulates that only those with a job will be able to apply for social housing – and that only after 12 months of continuous employment will they be eligible for housing benefit. Also, councils will be required to monitor all applications and dispatch the results to Whitehall. Potentially it's more detective work for housing departments – but cynics believe that in reality there will be few applicants and that the move is just a PR exercise.

The real losers of this new policy are the families facing destitution on 1 May. According to the Refugee Council, nearly 3000 people from countries including Hungary and the Czech Republic will be stripped of support and housing provided by the National Asylum Support Service. The Home Office says these people will now be EU citizens and therefore the countries they are from are considered safe. But given that it has rushed the changes through at the eleventh hour, surely transitional arrangements should be put in place to help the families rather than simply cut them off?

Source

Housing Today