Government delays plans to cap housing benefit by a year

The Government has delayed its plans to cap housing benefit by a year, as it unveiled plans for a radical overhaul of the system.

Ministers have announced the planned housing benefit cap will now apply to general needs accommodation from 2019, a year later than originally planned.

This is to move it into line with a new funding model for supported housing, amid protests about the impact the planned cut could have on this sector.

The Local Housing Allowance (LHA) cap on benefits for social housing was announced in 2015 by then chancellor George Osborne, who said it would bring payments in line with the private sector and stop social landlords charging inflated amounts.

But this sparked warnings that thousands of people in supported accommodation could lose their homes - including frail elderly people, victims of domestic violence and people with mental illness - given the extra costs these facilities needed to provide care.

The Government plans on devolving funding to meet these extra care costs to local authorities, and on Monday launched its consultation on refining these measures.

Last year, more than 700,000 people used supported housing across Britain.

The consultation document shows that around £4.1 billion was paid out to supported housing tenants last year, around 17% of the total housing benefit spend nationally.

A further £2 billion was spent on additional services such as care and support services, the element the Government plans on devolving.

Announcing the launch of the consultation in a ministerial statement, Work and Pensions Secretary Damian Green said: "Supported housing supports hundreds of thousands of the most vulnerable people across the country.

"A safe, stable and supportive place to live can be key to improving people's lives, and for many it is a stepping stone to independent living in the longer term.

"The Government values the role supported housing plays and is committed to protecting and boosting the supply of supported housing and ensuring it provides value for money and works for those who use it as well as those who pay for it."