Direct benefit payments won’t apply to temporary homes

The Department for Work and Pensions’ decision follows fears that the reform would jeopardise the government’s target of keeping families with children out of B&Bs. Some registered social landlords that manage temporary homes for councils had threatened to pull out of the market.

They feared paying a “local housing allowance” to tenants, rather than housing benefit to the landlord, would increase the risk of arrears and the cost of collection.

This is because rents on these properties, which associations lease at market rates from private landlords, tend to be higher than social housing and often have a management charge on top. Councils feared they couldn’t keep families with children out of B&Bs unless RSLs could afford to provide temporary housing.

Announcing the change in a letter to the National Housing Federation last Wednesday, Hazel Hobbs, head of the DWP’s housing support division, said: “We are aware of the need for local authorities and RSLs to have certainty about leasing contracts. Any future system would need to respect existing leases.”

The move was welcomed by RSLs, including Pathmeads Housing Association, which runs nearly 6o00 units of temporary housing. Managing director Tom McGregor said: “A number of associations have made a major commitment to keeping families out of B&Bs through temporary accommodation and we thought [direct payment] would give us concern, but we are pleased that, for the time being, it won’t.”

Jim Wintour, head of housing at Waltham Forest council, added: “I am sure all local authorities will be delighted by this.”

But he added that problems remained with the new system, such as incorrect benefit levels being set by rent officers using out-of-date rent estimates.