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By Dave
26/10/2010

DWP Research: HB & LHA

The DWP has snuffled out (it seems like the best expression but apologies for it) three research reports on the impact of the local housing allowance.  Of course, these reports are largely out of date as a result of recent announcements about the LHA but they are, nevertheless, worth a quick look.  They are Private Landlords and the Local Housing Allowance system of Housing Benefit (Study 1), Tenants and Advisers’ early experiences of the Local Housing Allowance national rollout (Study 2), and Low Income Working Households in the Private Rented Sector (Study 3).  They all use different research methods (albeit relatively industry standard quants and quals, if you will forgive academic-speak) and mostly come up with findings which one might have expected:

– A comparison of low income working households not in receipt of HB with those in receipt noted that this may be a false binary (study 3).  In other words, households’ circumstances fluctuate so that the groups merge together.  One interesting finding of this study is that some of the interviewed low income working households avoided applying for HB because of previous negative experiences and the stigma attached to HB.  Furthermore, one set of low income working households was found to be worse off than HB recipients – households with small children.

– That latter finding picks up one of the “findings” of study 1 – I put that in inverted commas because the finding is so well-known from past research that it can hardly be regarded as a finding in its own right – that private landlords tend to avoid HB claimants.

– However, study 1 does provide new evidence which confirms the early findings from the pathfinders of issues arising over the ideological shift inherent in the LHA of payment to claimant as opposed to payment direct to landlord under the old scheme.  Rent arrears arise from the occupier not handing over the rent to the landlord.  The study found evidence (from landlords) of two broad types of non-payment: irregular or intermittent non payment; tenants who were committed non-payers (or the can’t pay and won’t pay, I suppose).  As regards the latter, “Respondents noted that certain HB tenants (usually young, single males) had ‘wised up’ to hose the system worked, and were hopping from one tenancy to the next every eight weeks without every paying rent”.  That has been a fairly regular complaint I’ve heard over the years from landlords, so, whilst not new, the LHA may exaggerate the issue as the authors note (at para 6.5).  Apparently, there was also “dismay” amongst the sample of landlords that there was no option for direct payment.

– Claimants had mixed views about direct payments (study 3) but a finding of this study, in contrast to the landlord-focused study, was that rent arrears were uncommon amongst tenant participants in this research.

– The key issue for the success of LHA is recipients’ knowledge of the allowance and ability to negotiate with landlords over the rent.  Study 3 found that tenants didn’t really know much about their entitlement, which rather impacts on their negotiating ability; in any event, advisers believed that landlords were putting rents up to the LHA level anyway.

– Chapter 5 of Study 3 is the most interesting and important to me, concerning the use of the safeguard provisions.  This found that advisers had considerable difficulties persuading local authorities to use the safeguard provision to pay direct to the landlord and “overall, the safeguard provisions did not appear to be working effectively in protecting tenants”, but they worked best where there was a confirmed diagnosis.  Edinburgh comes out rather well in this survey.

Altogether, these reports demonstrate that, no matter how much economic modelling and “purity” one can muster, as us qualitative researchers will tell you, the social realities of welfare reforms belie such modelling and purity.

Posted in: Benefits | Possession

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