Ministers from the DCLG and DWP defended their plans in a series of angry exchanges with MPs, who warned reforms to funding paid to local authorities to cover housing support for vulnerable people were ill-thought through.
The extent of lobbying by housing associations was revealed at the joint session of the DWP and CLG committees which heard ministers admit there are “challenges” for providers.
Ministers want to move to a new system of funding to cut the Housing Benefits Bill. But MPs questioned what protections would be in place to ensure areas with lower rental rates are not disadvantaged by the proposed changes.
MPs revealed fears have been raised by L&Q and East Thames, Riverside and groups working with victims of domestic violence that changes to the funding formula are likely to cause serious problems.
The committee highlighted the current creaking system of social care and the urgent need to build better housing for older people. But this require long-term certainty over funding.
James Cartlidge (Cons) warned capital funding for projects would be put at risk: “How are those providers going to deliver if they can’t deliver the funding?”
Local government minister Marcus Jones replied: “We are aware that represents a challenge for providers. We’ve got to bring some degree of certainty to the situation. As with any government, it’s only as good as one spending review to the next. But we are very mindful of what’s been said.”
Labour MP Karen Buck said the DWP’s record on delivering the complex universal credit reforms had delivered outcomes such as homeless families being abandoned.
She challenged the ministers to give more detail on outcomes: “We’re looking for something more than a general reassurance that things will be okay.”
Buck also highlighted how funding for victims of domestic violence moving across local authority boundaries had not been secured. Cash-strapped councils had used local criteria to put their own residents first.
Jones said: “We are looking at short-term accommodation in a different way to long-term accommodation. It’s absolutely clear that local authorities should be accepting people who are not already from that district or borough. We are very mindful of that.”
Ministers confirmed a Green Paper will be published by the end of May and that there will be a ‘shadow year’ of transition between the old and new systems.
Jones said: “I think it’s important that we should reflect.”