Headlines: March 5th, 2003

Ten local authorities are to act as pathfinders for a project which will see a big shake-up in Housing Benefit, giving more power to tenants and helping people back into work. Nine of the ten accepted a government invitation to take part in the scheme. The tenth – Blackpool Borough Council – asked to be involved.Under the radical plan, beginning in the autumn, private tenants will receive a flat rate of housing benefit, set locally, which it is believed will create a simpler, fairer system. It will mean that both landlords and tenants will know in advance exactly how much they will receive.

The pathfinder councils are Brighton and Hove, Conwy, Coventry, Edinburgh, Leeds, the London Borough of Lewisham, Middlesbrough, North East Lincolnshire, Teignbridge and Blackpool. They will pilot the scheme over two years and if it is successful it will be will be introduced nationwide. Work and Pensions Secretary Andrew Smith said the project provided an exciting opportunity for the councils to lead the way in bringing in the new system.

“I want to get Government and local councils working together with tenants, landlords’ groups and advice bodies to make the most of this important reform. This radical strategy is about choice and responsibility,” he added.

Under the terms of the trial, tenants will receive a flat rate and if they want to move to a cheaper property they can keep the difference. As is the case now, if they choose to live somewhere more expensive they can make up the difference. Larger households will get higher allowances. The government claims that no tenant will lose out and some will be better off. Most payments will go to the tenant, not to the landlord as at present. Claimants will have the same responsibility to pay their rent as tenants who are not on benefits.

The Government said it believed that partnership with local government was crucial to the success of this initiative and the Secretary of State and Housing Benefit Minister Malcolm Wicks would be taking a close interest in the process. The scheme follows reforms already announced by Mr. Smith last October, which mean that local councils across the country will not have to reassess four million individual housing benefit, claims every year. Tenants will not have to go through the time-consuming reclaim process. It is claimed this will particularly help unemployed jobseekers who might otherwise be held back from taking jobs.