Housing Benefit

Deputy Prime Minister written question – answered on 4th February 2004.

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Photo of Austin Mitchell Austin Mitchell Labour, Great Grimsby

To ask the Deputy Prime Minister how and by which department housing benefit in respect of tenants whose properties (a) are managed by arm's length management organisations, (b) have been the subject of large-scale voluntary transfers and (c) are council owned is paid; for what reasons they are not all paid on the same basis as the social security fund; and what the effect of the method of funding is on central Government housing allocations to each type of operator.

Photo of Mr Chris Pond Mr Chris Pond Parliamentary Under-Secretary, Department for Work and Pensions

I have been asked to reply.

Local authorities are responsible for the payment of housing benefit to eligible claimants. Housing benefit is paid as a rent rebate to local authority tenants and rent allowance to tenants of private landlords (including individual private landlords, housing associations and registered social landlords); tenants whose properties are managed by arm's length management organisations remain local authority tenants.

Currently as part of the housing benefit scheme local authorities in England receive a subsidy to reimburse them for correctly determined housing benefit claims. Responsibility for payment of the indirect housing benefit subsidy element, which for English authorities was previously distributed by the Office of the Deputy Prime Minister, will be transferred to the Department for Work and Pensions from April 2004. This element represented the 5.5 per cent. residual subsidy paid to authorities for rent allowance, council tax benefit and non-housing revenue account rent rebates, which supplemented the 95 per cent. direct subsidy that the Department for Work and Pensions already pay; from April this year the Department for Work and Pensions will pay all HB/CTB benefit subsidy as a direct grant, payable at 100 per cent. for correct claims.

In addition responsibility for rent rebate subsidy will transfer to the Department for Work and Pensions from the Office of the Deputy Prime Minister from April 2004. As a result of the transfer of all housing benefit and council tax benefit funding streams to the Department for Work and Pensions, a full review of the subsidy rules has been undertaken in order to produce a simpler, clearer system for reimbursing local authorities.

Housing allocations take no account of these arrangements.

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