Direct pressure

Pastor Pete Cunningham, from the Green Pastures foundation, a leading housing charity in Southport on Merseyside, which owns hundreds of properties rented by vulnerable people, says the LHA is pushing his tenants into arrears and putting charitable housing organisations under huge financial pressure.

‘We have some 300 tenants who are all vulnerable. You spread the potential arrears across those 300 people and we’re talking about a minimum loss of £200,000, which would sink us.’

One Green Pastures tenant, Jo Patterson, found herself in rent arrears after using the LHA payments to support her family.

Jo was a drug addict who became homeless after a spell in prison. ‘I was on heroin and crack, and on the streets. When I came out of prison, I got back on drugs and was living in the public toilets.

‘But then I got pregnant, and I went to Pastor Pete for help because I was sleeping on the streets,’ she says. ‘I packed in the drugs and had the baby, and Pastor Pete offered me this place.’

But after nine months, a delay in Jo’s benefits pushed her into arrears. ‘We had no money and the baby was six weeks old. The rent cheques kept coming to me, and the temptation was to cash them in. I knew you shouldn’t do that, but I had to. Pastor Pete wrote to the council, asking for the cheques to be sent him, but they weren’t.’

It took five months for the situation to be resolved – but by then, Jo was heavily in debt. She was clear that she would rather the rent money was paid direct to her landlord rather than to her.

‘Anyone who is on a low income is going to find it difficult. It’s far better to get the money paid straight to the landlord because you end up spending it and getting into more and more debt.’

Another tenant and young mother Joanne Roberts said: ‘I get my rent put into my bank account and it’s a nightmare – I’ve got myself into trouble a couple of times because there are bills to pay, or the kids need clothes.

‘Unless you specifically ask them to send it to your landlord, they don’t. You have to call or write to them, explaining the reasons why you don’t want it sent to you.’

Under the LHA, the rent is paid directly to tenants unless they specifically contact the local authority requesting that it be sent to their landlord instead. Even then they have to demonstrate to the authority that they are ‘vulnerable’ and will have difficulty managing their finances and paying their rent on time.

But Pastor Pete argues that it is too difficult under LHA guidelines to establish that a claimant is vulnerable and that the payment should be made direct to the landlord.

One elderly Green Pastures tenant was unable to complete her claim forms on her own before a local government inspector came to visit to assess if she met the vulnerability criteria. Despite this, the inspector deemed her capable of managing her housing benefits, according to the LHA’s vulnerable persons guideline.

Pastor Pete says: ‘If you had gone round to interview that lady and read her document, there’s no way you would have said that she was capable of paying her rent.’

According to a Crisis survey of advisers, just 16 per cent of tenants who made vulnerability applications said they had always been successful.

The survey found that 48 per cent of respondents didn’t find the process of establishing vulnerability straightforward, with many expressing concern about the consistency with which the guidelines are being implemented across local authorities.

‘It would be better if central government assumed responsibility for this so there was clarity,’ Pastor Pete says.

‘If local authorities have different criteria and are paying people who can’t manage, the effect will be that more landlords will not let to tenants on LHA.’

Nor is it just landlords who are reluctant to get involved with tenants on the LHA. According to Pastor Pete, mortgage companies are reluctant to lend to private landlords if their buy-to-let property is to be inhabited by LHA claimants.

When a LHA recipient is in arrears, the council can implement an automatic ‘trigger’ to have payments sent directly to the landlord. The provision is meant to protect vulnerable people from the threat of eviction.

But the tenant has to clock up eight weeks of rent arrears before the local authority can implement the ‘trigger’, according to LHA guidelines. Few private landlords are likely to show that degree of forbearance.

The Crisis survey also found that 80 per cent of advisers said that more tenancies were being terminated due to rental arrears under the LHA system than under the previous housing benefit system.

Pastor Pete said: ‘If you are a landlord and this is your living, you can understand someone saying, “forget it, I’m not having these people – if local government can’t do the job properly, why should I be penalised?”’

The Department of Work and Pensions is currently asking Green Pastures to evaluate the cases of 60 tenants, with the view of taking them off the vulnerable list and paying them directly.

If they are de-classifed from vulnerable status, then they will be back in control of their benefits even though most don’t want to be. And if the tenants start struggling with their finances, a minimum of eight weeks rent arrears will have to accrue before Green Pastures can ask for a tenant review.

‘What housing departments are saying now is that “we want to pay these people direct unless you can give us evidence to the contrary,”’ Pastor Pete says.

He is concerned that such a move will put additional pressure on his tenants and Green Pastures’ finances. ‘Having to wait eight weeks is hard enough, but housing departments are sometimes slow in their reaction, and it could mean 12 weeks.’

However he’s clear that he will do all he can to help vulnerable tenants manage their payments, after all, ‘I can’t blame the tenants for this,’ he says.