It’s official: DWP cuts are so bad councils just spent record amounts mopping them up

The Department for Work and Pensions (DWP) has cut some welfare so near to the bone that local authorities had to spend record amounts last year to make up the shortfall.

The DWP: reforms to mitigate other reforms

Discretionary Housing Payments (DHPs) have been around since 2001 [pdf, p5] to help housing benefit claimants with certain costs. But since 2011 [pdf, p4], the DWP has introduced the so-called ‘Bedroom Tax‘ and the benefit cap, and frozen the Local Housing Allowance (LHA). So it gives councils additional funding to support people faced with these cuts.

Councils award DHP to cover costs such as moving home or a reduction in housing benefit. As the Child Poverty Action Group noted, the money:

is to mitigate the effects of welfare reforms… In effect, DHPs give [councils] the ability to compensate claimants in their area who are affected by Government cuts to help with housing costs.

Now, the DWP has released [pdf] the amount of money that English and Welsh councils spent on DHPs in 2017/18. It shows that councils gave out [pdf, p1] £166.5m worth of DHPs. But the devil is in the detail.

Dealing with chaos

Firstly, DHP always had “core” funding based on overall housing benefit spend [pdf, p22]. That is, the DWP always gave councils a pot of money, based on how much each one spent on housing benefit, to distribute to people who needed it.

Every year, the DWP measures the rest of the funding (to cover the Bedroom Tax, benefit cap and the LHA) against this core funding. In 2017/18, this ‘other’ spend was 8.25 times higher than the core spend; the highest level on record [pdf, p3]. It shows that the DWP and councils are having to spend more and more to mitigate the effects of the welfare reforms.

Secondly, over 29% of local authorities spent more on DHPs than the DWP allocated them in funding [pdf, p8]; again, showing in some areas councils were having to financially prop up people affected by the cuts themselves, because DWP funding wasn’t enough.

Thirdly, a record amount was spent [pdf, p3] mitigating the effect of the benefit cap.

Finally, specifically regarding funding to mitigate the benefit cap, 40% of the money was going [pdf, p12] to “help with short term rental costs while the claimant seeks employment”. It may be that because of the benefit cap, people are being forced into work because they can no longer afford the rent.

The institutions say…

A DWP spokesperson told The Canary:

Funding is allocated to local authorities based on need, and this is reviewed each year. Most local authorities didn’t spend their full allocation.

The Canary asked the Local Government Association for comment, but it had not received one at the time of publication.

A kick in the teeth

But there’s a final kick in the teeth for welfare claimants. As the Child Poverty Action Group noted, critics say:

discretionary local payments sets up a ‘post-code lottery’, with claimants in similar circumstances receiving different decisions because of where they live.

DHP is not ring fenced, meaning councils can spend it however, and on whatever, they want. The DWP figures back Child Poverty Action Group’s claim up. They show [pdf, p10] that overall, councils only spent:

• 69% of the benefit cap funding allocated by the DWP.
• 81% of the Bedroom Tax money.
• 76% of the LHA funding.
• Nearly 10% of local authorities spent less than 70% of their allocated funding [pdf, p7].

Basically, some councils are using the DHP fund to support people, while others are spending it elsewhere.

The DWP and central government never appear to operate in the best interests of claimants. But it seems that, judging by a few of them, neither do some councils.

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Featured image via The Canary and UK government – Wikimedia