Shelter supports the Government's aim of making work pay and supporting those people who are unable to work, and so we welcome the legislation in Part 2 of the Welfare Reform Bill, replacing the current Housing Benefit (HB) regime for private rented sector tenants.  The Bill enables the new Local Housing Allowance (LHA), which has been successfully piloted in 18 Pathfinder areas since 2003, to be rolled out nationally.   

Under the LHA, tenants are paid direct and required to make their own arrangements for paying the landlord.  In most of the Pathfinders, the flat-rate itself has been more generous than the Local Reference Rent restricted HB it replaced.  As a result, many claimants have found that the shortfall between the benefit they receive and the rent they owe has either been reduced or disappeared entirely.  Others have been left with extra money in their pocket as a result. 

Part 2 of the Welfare Reform Bill includes regulation-making powers to:

• Roll out the flat-rate LHA nationwide in the private rented sector (Clause 27)
• Pilot the removal of council and housing association tenants' right to simply ask to have payments made straight to their landlord (Clause 34)
• Reduce and withdraw HB/LHA from claimants who refuse support following an eviction for antisocial behaviour (Clause 28).

Experience in the Pathfinder areas does, however, show that some changes are needed to help ensure that the LHA reforms are successful when rolled-out nationally.  Shelter believes that amendments should be made to the Bill, introducing better safeguards for tenants who might experience difficulty managing the LHA payments, and fall into rent arrears and face eviction and homelessness as a result.  We also believe that the Bill should be amended to introduce much greater transparency into the way the LHA is set.

In addition, a number of important further reforms to the HB system are also necessary to improve the lives of low-income households.  We hope that the Welfare Reform Bill will be amended to:

• Abolish the Single Room Rent restriction on HB/LHA for under-25s
• Introduce a mechanism to uprate Earnings Disregards annually
• Reform the Non-Dependent Deductions regime
•  End housing associations' power to use the mandatory Ground 8 in possession actions for rent arrears
• Strengthen the requirement on local authorities to make Interim Payments on claims not determined within 14 days.