Yarlington Housing Group has said government welfare reform could threaten its development plans.
In a statement on the plan to introduce a cap on Local Housing Allowance, the 10,000-home housing association, based in the South West, said the changes “could potentially affect the future viability” of current schemes.
It added: “We would not be able to commit to building any more Retirement Living Schemes in the future, where the LHA cap would be exceeded by the cost of rent and service charges as this would not be sustainable for Yarlington or our customers.”
Yarlington Housing Group’s statement on the Government plans in full:
“In November the Government announced the decision to cap housing benefit at that of the Local Housing Allowance (LHA) for housing association tenants. This will affect those who rely on support for their housing costs and who sign up to a new tenancy in April 2016. But, it will not come into effect until April 2018.
“It’s a complicated area and the changes will potentially have a significant impact on the most financially vulnerable people in our society; the DWP intends to apply the cap to housing benefit for new tenants in supported and sheltered housing. Rents tend to be higher within supported and sheltered housing to reflect the extra facilities and resources involved in supporting vulnerable residents. The result? Housing Associations such as Yarlington that provide housing for vulnerable and older people could be left with huge funding shortfalls.
“As with many other Housing Associations, we are concerned about this proposed change and how it will affect our services in the future.
“At this time, we can’t quantify the exact figure as to how many new residents would be impacted by this change, but what we are certain of, is that it will have a negative impact on the most vulnerable in society.
“As a result of housing benefit being capped at the LHA, new residents to Yarlington Retirement Living schemes who claim housing benefit, would, on average, have to find an additional £16 a week to top up their rent, although in some cases it may be as much as £30. The alternative option would be to reduce the services we provide on these schemes; however this would be undesirable as these housing services are pivotal in caring for our vulnerable residents and ensuring they can live their life to the fullest.
“The changes announced – if applied to vulnerable people like the elderly – could potentially affect the future viability of our current housing schemes. Unfortunately, we would not be able to commit to building any more Retirement Living Schemes in the future, where the LHA cap would be exceeded by the cost of rent and service charges as this would not be sustainable for Yarlington or our customers.
“Take away the support and care provided by the sheltered and supported housing schemes and we are likely to see spend on the public purse increase due to additional pressures on the NHS or social costs for this group of people.
“It has been suggested by the DWP that discretionary housing payments could fill the reduced gap in weekly income however we cannot build a business plan based on discretionary payments.
“Maintaining the support services we provide to our residents has, and will continue to be an important part of our housing offering and one we hope we can retain. We are in the process of carrying out a full assessment of our Retirement Living schemes to improve our service offering, but should the decision made to cap housing benefit for vulnerable people remain in place we would have to question the long term viability of these services.
“Yarlington is aware of the significant concerns other housing providers in the south west also have who provide supported housing for other vulnerable people like the homeless and victims of domestic violence, and who would also be affected by this cap. What we all need and hope is that care and support will be exempted from these benefit caps so we are not forced into making decisions that everyone will regret.
“We are calling upon the government and policy makers to revisit the benefit cap for those most vulnerable within our society. We are hopeful that when the government is presented with the full facts, and the likely implications upon those most vulnerable, then the local housing allowance policy will be revised.”