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Government cuts risk homelessness prevention work, councils warn
London boroughs have warned that the £40m cut to Discretionary Housing Payments (DHPs) in 2022-23 risks undermining homelessness prevention work in the capital.
London Councils said the funding is local authorities’ “main homelessness prevention tool” and warned that the cut is coming at a time when boroughs are facing a “severe homelessness crisis”.
The government announced last week that councils in England and Wales will have £100m available to them in 2022-23 through DHPs, which represents a marked drop-off from the £140m available in 2021-22.
In London, DHP funding will be cut by 28% from £38m to £26.7m.
DHP funding is available to anyone entitled to housing benefit or the housing element of Universal Credit who needs further help.
Councils use the funding for things such helping to pay a rent deposit in advance or making up a shortfall between benefits and private rents.
The latest available figures show that in 2020, London boroughs issued 32,338 DHPs to help households with their housing costs.
At the same time, government data shows that the number of Universal Credit claimants in London who do not receive enough support to cover their rent increased by 180% to 133,570 between August 2019 and 2021.
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According to London Councils, between 2013 and 2021 local authorities in London spent an additional £17.6m on DHPs on top of the money allocated to them by government.
However, the body said budget pressures mean that boroughs will struggle to maintain DHP provision at the same levels following the latest government cuts.
It comes shortly after the chancellor’s Spring Statement last week, which was criticised for not doing enough to support households who are struggling with soaring inflation.
London Councils highlighted that while the chancellor’s Spring Statement boosted the Household Support Fund from £500m to £1bn to help the most vulnerable residents meet their everyday living costs, there was no targeted measure on homelessness prevention.
Muhammed Butt, executive member for welfare, empowerment and inclusion at London Councils, said: “We’re facing the most severe homelessness crisis in the country and boroughs are deeply concerned by the reduced funding available for Discretionary Housing Payments.
“These payments are the boroughs’ main homelessness prevention tool. They can be vital for helping low-income households pay their rent and keep a roof over their heads. With so many Londoners struggling to make ends meet, we’re worried what will happen if fewer Discretionary Housing Payments are available.”
A recent poll commissioned by the mayor of London found that 80% of Londoners have seen an increase in their cost of living over the past six months, with 13% going without essentials or relying on debt because they struggle to make ends meet.
Mr Butt added: “We know the government shares our ambitions on tackling homelessness. Good progress is being made on reducing rough sleeping – but we need the same focus and funding boost for preventing other forms of homelessness. A staggering number of Londoners already live in temporary accommodation and we can’t afford for these numbers to go up even further.”
A government spokesperson said: “This government is working across the country to help people with their housing needs, and is spending over £2bn to tackle and prevent homelessness and rough sleeping over the next three years.
“The change in Discretionary Housing Payment funding also reflects the rise in Local Housing Allowance brought in at the start of the pandemic, which we are maintaining, and government spending on housing support remains higher than before the pandemic.”
In 2020, the government increased Local Housing Allowance to cover the cheapest third of rents in a local area, however the rate has been frozen since then, meaning housing benefit has not increased in line with inflation.
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