Housing benefit failures criticised for wasting public millions

The government has faced new criticism over failures in the housing benefit system which is costing the public purse millions in rents paid to vulnerable tenants not being passed on to landlords.


The failures are highlighted in report by the Parliamentary Select Committee for the Department for Work and Pensions (DWP). It says that Local Housing Allowance (LHA) “is falling short of its original intentions and is in need of urgent review”.

Property groups have warned that many landlords will remove properties from the system, upping the pressure on hard-pressed councils to find homes for those receiving housing benefit.

Ministers have systematically refused to act on concerns raised by the British Property Federation (BPF) and bodies such as Shelter, which has called for greater choice for tenants to be able to decide whether to have their LHA paid directly to landlords or to themselves. There is strong evidence that many recipients of LHA wish it to be paid directly to their landlord, and not to them as is the way now.

The committee’s report adds: “We acknowledge that the policy of direct payments to the tenant will only be working well when practical problems are addressed, safeguard procedures for vulnerable tenants strengthened and landlord confidence in the system is improved.”

However, the committee says the system should be maintained as is because paying LHA directly to tenants is an important element of ‘’work readiness’. The Conservatives have said that “the current system helps no-one”.

The report also dismisses proposals by the DWP that payments should only be made to homes meeting specific energy efficiency standards, which many feared would undermine the objectives of LHA.

Ian Fletcher, director of policy at the British Property Federation, said:

“Despite continual objection from landlords and tenants, the Government continues to be wedded to a principle that is failing in practice. In an environment where ever pound of public spending matters, it is scandalous to maintain a policy that wastes millions of pounds of public money simply because the government wants to try out the philosophical principle of ‘empowering people’.

While there are many positive recommendations in this report, they are too insignificant to reverse the fundamental mistrust landlords have in the system. Landlords should expect to get paid for what they provide, no ‘ifs’ or ‘buts’. Benefit tenants also have an uphill task to compete for housing in many areas, we should be making their task easier.”

“We are glad to see that the committee’s criticism of linking energy efficiency with direct payment and hopefully, with a good cross section of MPs now also panning the idea, that will be the end of it.”



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