The Big Society, Localism & Housing Policy

ESRC funded Seminar Series, 2013-14

Monthly Archives: February 2014

When Two Worlds Collide: The ‘Discretion’ in Discretionary Housing Payments

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Feb 27, 2014 Uncategorized / Comments Off

‘This post, authored by Jed Meers of the University of York, looks at the treatment of Discretionary Housing Payments by both the Courts and Local Authorities in response to the so-called ‘Bedroom Tax.’ Jed is a PhD student at York Law School focusing on how housing law protects the home of social tenants, with a focus on the ‘bedroom tax.

When Two Worlds Collide: The ‘Discretion’ in Discretionary Housing Payments

The thorny partnerships between ‘localism’, ‘conditionality’ and ‘responsibilisation’ was a key thread which ran through the second seminar at the picturesque Queen’s University Belfast, particularly in the presentations by Professors David Robinson and John Flint. As suggested by Dr Jenny Muir in a previous blog post, there is a complicated relationship between these concepts and ongoing welfare reform. If this is bewildering for academia, spare a thought for the Courts and Local Authorities attempting to grapple with the changes. A good example of such confusion and muddled discourses is the use of Discretionary Housing Payments (DHPs), where the treatment of the policy framework by the Courts and the Department of Work and Pensions (DWP) finds itself at odds with the practice of Local Authorities on the ground.

In light of the themes in the second seminar, this short blog post seeks to draw attention to DHPs as an area requiring more attention from academics and policy-makers by suggesting that there is far more going on than just ‘plugging the gaps’ left by the welfare reform programme. The treatment of these payments is explored alongside some (very early stage) analysis using DHP spend data released by the DWP.

The Second-Coming of DHPs and the ‘Bedroom Tax’

The Coalition Government’s ‘removal of the spare room subsidy’ – known by almost everyone else as the ‘Bedroom Tax’ – has truly begun to bite. The Commons Library briefing from 10th February 2014 paints a picture of current research findings: an estimated one in ten disabled people affected are turning to food banks, 51% of tenants are unable to pay all of their rent, and country-wide there are few opportunities to move to smaller properties to escape the penalty, due to an undersupply of one-bedroom properties.

But fear not. The previously small DHP scheme is the solution put forward by the Department for Work and Pensions, functioning as a giant sticking plaster for those who fall outside of exemptions to the policy.  The Government has pumped in excess of £155 million into a ‘discretionary pot for [local authorities] to tailor to their local and individual needs,’ where those affected by the ‘Bedroom Tax’ (and other reforms including the ‘benefit cap’ and changes to LHA) can apply to their Local Council for assistance in paying their rent.

This pot weighs in favour of the continued legality of the policy, with the Courts currently satisfied in appeals against the ‘Bedroom Tax’ and ‘Benefit Cap’ that ‘the provision made and to be made by way of access to DHPs, constitutes a proportionate approach to the difficulties suffered by [vulnerable tenants] in consequence of the…policy,’ and that ‘immediate hardships are in many cases alleviated by the DHPs.’

In the most recent judgment by the Court of Appeal on the continued legality of the ‘bedroom tax’, DHPs were a central factor in justifying the policy:

‘Central to [the Secretary of State’s] thinking is the idea that there are certain groups of persons whose needs for assistance with payment of their rent are better dealt with by DHPs than [housing benefit]…I consider that they amount to an objective and reasonable justification of the scheme.’

As suggested by Government Ministers, ‘the key is in the title.’ These payments are discretionary, and the Local Authorities charged with making these decisions can do so how they see fit and with reference to their own criteria in addition to official guidance by the DWP. In Government rhetoric, these local authority administered payments are presented as the best way to incorporate ‘local issues’ on a ‘case by case basis.’  We are told repeatedly that local authorities are ‘best placed’ to make these decisions ‘according to their assessment of local needs and in order to best reflect their particular circumstances’; a perspective which echoes the social housing hallmark of the ‘need of local authorities to husband their resources’ by allocating resources to those they deem most appropriate.

However, even after a cursory glance at a DHP application form, you would be forgiven for thinking that such ‘local issues’ are far from the minds of those council officers charged with making awards. Detailed income and outgoings, areas for cutting spending, questions about lifestyle habits (Do you smoke? Gamble? Have Satellite TV?) and requests to provide evidence of some ‘exceptional hardship’ form the basis of the applications.

This information is then filtered through Local Authority policies which guide the imposition of conditionality – it is difficult to find a DHP policy which does not mandate the attachment of behavioural conditions in certain cases. As an example, Oxford Council helpfully outlines how their officers pick through the form provided to look out for ‘discretionary expenditure such as television contracts, alcohol and tobacco, [and] higher than average utility bills,’ and mandate that ‘when making an award, one or more conditions will be applied… [related] to finding work, affordable accommodation and/or reducing expenditure.’ Manchester Council’s DHP policy explicitly references the ‘incentive and disincentive potential of [DHPs], in particular with regard to recognising and encouraging responsible housing choices. The well-publicised case of North Lincolnshire Council denying DHPs to those who smoke or have satellite TV is indicative of the problem at hand.

This is two separate ‘assumptive worlds’ being forced to coalesce. The Government and the Courts frame DHPs as a means to plug the gaps left by the policy, whilst Local Authorities are interpreting their discretion far more widely and with striking political undertones which play to discourses of conditionality and responsibilisation.

With new data on Discretionary Housing Payments having become available, one question to ask is whether this differential treatment is manifesting itself in DHP expenditure. Does,for instance, the politics of the Local Authority appear to influence the amount and generosity of DHP awards, or does an area’s resources and severity of welfare reform impact dominate?

Some Initial Analysis

Focusing on ‘Spend-per-Case’

Much of the media coverage on DHPs has focused on overall percentage spend of the allocation – namely, how much of the money given to Local Authorities has actually been used to mitigate the impact of the reforms. However, in an attempt to show the near-impossible task presented to the civil servants at the DWP in charge of allocating the DHP pot out to Local Authorities, I have mapped some key indicators of the severity of under-occupation used in this analysis. The darker shades of red are indicative of higher values (these are interactive maps plotted using Google Fusion, so if you click the image you can explore the data a little better).

Figure One: Level of reduction

figure one

 

Figure Two: Severity of Under-occupation

figure two

Figure Three: Total number of BT Cases

figure three

It is clear from the above that the impact of the ‘bedroom tax’ is far from even across authorities – indeed, recent analysis by Beatty and Fothergill makes clear that the impact of welfare reform is an inherently regional affair, with the worst-hit local authority areas losing around four times as much per head than the least affected. This stark divide between areas within the UK presents clear problems in the calculation of DHP allocation. The formula used by the DWP is effectively a sophisticated stab-in-the-dark, using baseline DHP spend from the 2010/11 financial year alongside ‘anticipated losses’ from the flagship welfare reform programs.

The clouded nature of this allocation renders an interpretation of total percentage spend problematic, as the starting point is a loaded dice. Instead, this analysis uses the average DHP spend per ‘bedroom tax’ case – namely, dividing the money spent by the number of bedroom tax cases in the area. This does not remove the problems caused by the confusing nature of DHP allocation, but a focus on the payments made rather than on the total percentage spent should avoid the worst offending mistakes.

The Role of Politics

In order to explore general trends in DHP spend, a multiple regression was run using DWP data on levels of DHP expenditure for the period April to September 2013 broken down to Local Authority level. These were supplemented with further information on the level of severity of the ‘bedroom tax’ deduction, and the political make-up of the authorities involved.

Using the variables below, the model statistically significantly predicted spend per case values F= 61.893, p < .0005, adj.R= .55. All of the variables contributed statistically significantly to the prediction. A total of 318 councils were involved in the analysis (Con – 178, Lab – 85, No Overall Control – 55, other councils were left out of the regression due to low frequency).

 

 

Variable

Unstandardised Regression Coefficient

Standardised Coefficient

Average Bedroom Tax Deduction (£)

33.865

.383*

Total number of Bedroom Tax Cases

-.060

-.446*

LHAReforms (£ Expenditure)

.002

.357*

Benefit Cap (£ Expenditure)

.003

.283*

No Overall Political Control  vs Labour

45.089

.552*

Conservative vs Labour

-44.882

-.577*

Note: *p < 0.05.

The take home message from this, is that it appears that the political control of a Local Authority explains some variance in the amount awarded per case by DHPs, even when expected predictor variables (the average level of deduction and the total number of cases) and other welfare reforms (the spend on LHA reforms and the benefit cap) are controlled for. Conservative Councils are associated with spending less per ‘Bedroom Tax’ when compared to Labour Councils, and in turn, Labour Councils are associated with spending less per case than Councils with no overall control.

Some Tentative Conclusions

DHPs appear to be an instance where rhetoric emanating from the DWP is set against a heavily localised imposition of conditionality and the responsibilisation agenda. Although the above data are far from conclusive, the implication that the political make-up of a Local Authority is associated with varying levels of payments, coupled with cases such as North Lincolnshire Council and the widespread practice of attaching conditionality to awards, suggests that in appealing to a form of localised knowledge the Government have also appealed to some extent to a localised morality and politics. This messy picture on the use and function of these payments negates the granular position put forward by the Courts on the functioning of DHP payments.

As the Government continues to pump money into the DHP pot and the Courts continue to assess their role in the continuing legality of the welfare reform programme, these payments will come under increased scrutiny – and rightly so. It is hoped that as more evidence comes to light about the inaccuracies of the narrative put forward by the DWP and the treatment of these payments by the Courts, the problems associated with using DHPs to ‘plug the gaps’ will become ever more apparent.

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