Neil blasts 'unacceptable uncertainty' over 'LHA cap'

Alex Neil, Scottish social justice secretary, has written to welfare reform minister Lord Freud to ask for urgent clarification over whether the proposed housing benefit cap applies to supported housing. Under a plan announced in the spending review, housing benefit for social tenants will be capped at the Local Housing Allowance (LHA) rates, which are used to set benefit awards in the private sector.

The government has promised ‘protection’ for supported housing tenants but has stopped short of announcing an exemption. Supported housing providers have told Inside Housing this could impact their income to the point where they would be forced to close homes on a mass scale. Providers have put developments on hold while they wait for confirmation from the government.

Mr Neil said: “What’s still not clear is how far this cap will go when it comes to the most vulnerable living in refuge accommodation.”

He said: “This includes women and children fleeing domestic violence, disabled people and those affected by homelessness. We know rent and service charges in supported accommodation are significantly higher than the LHA rate. Without the existing levels of housing benefit to cover these costs, refuges will be forced to close.”

He said that although the government has said it will act, it has not provided detail on what it will do.

“The organisations that provide supported accommodation are being left in an unacceptable state of uncertainty,” he added.

Under the proposed LHA cap, new tenancies from April this year will be affected, although the cap does not come into effect until 2018.

It is understood ministers will look at the results of an ongoing government-commissioned review into supported housing costs, due in March, before announcing a decision.

A spokesperson for the Department for Work and Pensions said: “We value the work of the supported housing sector extremely highly and are working closely with them to ensure they are supported as effectively as possible in advance of the policy taking effect.

“The truth is that nothing will change until 2018. We are also providing local authorities with £870m over the course of this parliament precisely so that they can support people in their communities who need time to adapt to reforms.”