Hardship fund to be cut by 25%

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Published: Friday 30th January 2015 by The News Editor

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A hardship fund to help welfare claimants struggling financially following housing benefit reforms is being cut by nearly a quarter.

Councils have been told that the budget for discretionary housing payments (DHPs) will go down from £165m to £125m in the new financial year.

The cash pot is used to mitigate the impact of changes such as the benefit cap and the spare room subsidy, dubbed the bedroom tax by critics.

Campaigners said reducing the funding would mean cutting the “parachute cord” for the most vulnerable families.

Alison Garnham, c hief executive at the Child Poverty Action Group (Cpag), said: “Discretionary housing payments (DHP) have protected many families with children against some of the worst pain from severe benefit cuts and harsher eligibility rules. The need for them, among working and non-working families, has been – and remains – acute.

“Children have been hit hardest by benefit cuts and reducing DHP funding now will cut the parachute cord for the most vulnerable families.

“Doing the right thing by families and the taxpayer is clearly affordable. Spending on DHPs is relatively small; for every £17 in estimated savings from the Government social security cuts, only £1 has been reinvested in DHPs.

“The Government has also relied on this funding to shield welfare reform policies from being declared illegal for discriminating against vulnerable groups.

“The case for maintaining DHP funding is now strong. If the cuts go ahead, more families will be pushed towards homelessness and destitution because they can’t afford their rent or have to choose between eating and paying the rent.

“Beyond that, it will be social services, housing departments and health services who will be asked to cope with more families in crisis – at ever greater cost.”

The Department for Work and Pensions said cash for councils would increase overall because it is putting £95 million into targeted affordability funding to help claimants renting in the private sector in high cost areas, such as London.

A DWP spokesman said: “Our housing benefit reforms are a key part of the long term economic plan; vital to restoring fairness to the system and saving £2 billion a year by the end of this parliament.

“We have provided nearly £500 million since 2013 to support the transition to these reforms, and the overall funding available to councils will increase in 2015/16.”

Published: Friday 30th January 2015 by The News Editor

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