Guidance

Homelessness priority need for domestic abuse victims: New burdens assessment

Published 7 June 2021

Applies to England

Details of the proposal

Q1. Name of Lead Department.

A1. MHCLG

Q2. Working level contact details in lead department.

A2. Name: Lucy Rodger
Team: Homelessness and Rough Sleeping Directorate
E-mail: [email protected]

Q3. Name of policy/duty/expectation.

A3. Extending homelessness priority need to all eligible victims of domestic abuse

This legal change will come into force through the Domestic Abuse Act 2021 which contains a clause amending the Housing Act 1996 and Homelessness (Priority need for Accommodation)(England) Order 2002.

Q4. Description of the policy objective.

A4. The aim of the policy is to give those who are homeless as a result of being a victim of domestic abuse priority need for homelessness assistance and accommodation secured by the local authority.

Local authorities have a duty to secure accommodation for a number of groups who are deemed to have a ‘priority need’ if they were to become homeless. Pregnant women and households with dependent children are automatically in priority need but there are several other groups who are in priority need if they would be vulnerable if they were to become homeless – victims of domestic abuse must currently fulfil this “vulnerability test”.

This policy seeks to remove the consideration of vulnerability for victims of domestic abuse. This should allow more victims without dependent children to access accommodation and prevent the fear of homelessness for victims seeking to flee abuse.

Q5. Stage proposal is at (e.g. initial draft, consultation document, Cabinet clearance, etc.). If first draft, please state when update will be submitted.

A5. This legal change will come into force through the Domestic Abuse Act 2021

Local Authorities and the Local Government Authority (LGA) have been consulted to gather views and inform this final draft.

Q6. Brief expected timeline of the forthcoming key stages, including committee clearance.

A6. Consultation with Local Authorities: 14 August – 28 August 2020.

The policy proposal received write round clearance on the 2 May 2020.

LGA provided comments April 2021.

Q7. What the proposal requires local authorities to do, and how this differs from what they are doing now. If there is no difference, why is the new power/duty/ expectation being made?

A7. Under the current homelessness legislation local authorities must consider whether the applicant is “vulnerable” as a result of domestic abuse. This change will mean that local authorities no longer need to consider vulnerability for victims of domestic abuse when assessing what homelessness duties they are owed.

Removing this requirement will mean that all victims of domestic abuse will be found in priority need, increasing the number of households in priority need, particularly domestic abuse victims with no dependent children. This will mean that a greater number of domestic abuse victims will be owed an accommodation duty from the local authority.

The additional cost of extending priority need to all victims of domestic abuse therefore arises from the number of victims who were previously not owed the main housing duty, but who would be under this measure. Local authorities would incur an additional cost as a result of this measure due to the cost of interim temporary accommodation which would need to be sought for these individuals whilst longer term accommodation in the private rented sector or social housing is secured.

Q8. Expected date the policy impacts on local authorities. If implementation is to be phased in, please give estimated dates for each phase.

A8. The Domestic Abuse Act received Royal Assent in April 2021. The proposed policy is expected to come into effect in July 2021 (there is a minimum two month gap between Royal Assent and the provisions commencing).

Q9. Is an impact assessment being completed? If this shows that the policy impacts on the private sector in the same way with no disproportionate impact on local authorities, contact the Communities and Local Government New Burdens Team to confirm that the new burdens rules do not apply in this case - this does not mean there are no local government finance matters that might need to be addressed.

A9. MHCLG have contributed to an Impact Assessment for the Domestic Abuse Act. The LGA were consulted on the impact assessment. There is no impact on the private sector.

Estimated costs/savings

Q10. Has the proposal been appraised in accordance with HM Treasury Green Book principles? What was the outcome of the appraisal?

A10. Economic cost

We have previously estimated present value costs of £66 million (10 year time horizon). Details of these estimates are provided in the impact assessment for the Domestic Abuse Act.

Economic benefits

We have not been able to quantify/monetise benefits of this policy. Offering housing in temporary accommodation is likely to improve housing outcomes for these households compared to other alternatives and may improve wider outcomes.

Value for money

Overall we expect that this offers good value for money.

Q11. Best estimate of reasonable costs and savings involved for local authorities for each individual year. Please give breakdown by financial year and state whether costs are revenue or capital.

(a) Overall additional total costs to LAs for each year.

A(a) Internal modelling of homelessness statistics. This represents the costs of housing those households that have become homeless due to domestic abuse who are still homeless at the end of the relief duty and are not currently owed a main duty. We are unable to account for any changes in the incidence of domestic abuse.

We estimate that costs increase as the increase in the number of households living in temporary accommodation accumulates. Unit costs of temporary accommodation assume that housing benefit subsidy limits for temporary accommodation remain flat in nominal terms.

2021-22 - £1.5 million allocated to LAs using funding formula

All costs are revenue costs. Costs are presented in nominal terms.

i. Element attributable to ‘one off’ implementation costs.

A(i) MHCLG are not aware of any ‘one off’ implementation costs associated with the policy proposal. This is backed up by the consultation with local authorities which did not find any ‘one off’ implementation costs.

ii. Recurring costs element (for the first 3 years).

A(ii) 2021-22 - £1.5 million
2022-23 - £5.8 million
2023-24 - £9.8 million (projected costs for 2022-23 – 2023-24 are subject to change)

This reflects the increased number of households moving into temporary accommodation each year. We would not expect there to be a corresponding rise in the number of households leaving temporary accommodation, which means we expect the number living in temporary accommodation to increase year-on-year. Unit costs were calculated based on the rising cost of temporary accommodation, as an increasing proportion of the full unit cost is met by local authorities.

(b) Estimated specific and identified savings for each year - these must be additional to the annual savings authorities are expected to make and their treatment consistent with the appropriate HM Treasury guidance on efficiency.

A(b) N/A

(c) What are the direct and indirect impacts on local authorities pay and pensions costs?

A(c) N/A

(d) Overall estimate of the Net Additional Cost (costs-savings) to local authorities for each year.

A(d) 2021-22 - £1.5 million
2022-23 - £5.8 million
2023-24 - £9.8 million (projected costs for 2022-23 – 2023-24 are subject to change)

Discussion with authorities

Q12. What discussions have taken place with local authority associations, e.g. with the LGA or LC? If there is no planned contact with local authorities through representative bodies, please explain why.

A12. MHCLG officials consulted 6 local authorities on the new burdens assessment and received 4 returns. MHCLG also consulted the LGA who are supportive of the priority need changes and the assessment.

Q13. Give a brief description of the authorities’ views, particularly on costs and financing (note: there is no obligation to agree final finance assessments with them).

A13. Local authorities raised that the new burdens assessment did not incorporate the potential risk of an increase in caseload due to COVID-19. There is evidence to show that the number of cases of domestic abuse have risen during the COVID-19 lockdown and one local authority reported seeing a 10% increase in Domestic Abuse approaches since April 2020 - however acknowledged that this rate may subside. It is not possible to assess this variable in the financial analysis however we recognise this as a risk and will continue to monitor the number of households presenting through quarterly statistics.

During the pandemic MHCLG has provided councils with unprecedented resources to manage the impacts of the pandemic, including over £6.1 billion in un-ringfenced grants, £1.7 billion in the Contain Outbreak Management Fund for 2020-21 and additional funding for authorities to support care homes, high streets and the most vulnerable in their communities. This is in addition to a £10 million COVID-19 Emergency Support Fund for charities providing refuge, supporting 166 organisations to provide up to 1,890 bedspaces.

Housing authorities also suggested that more expensive single sex accommodation may need to be sought as a result of the changes, for example male refuges. Data is not available on the type of specific accommodation offered to victims, meaning that this cannot be built into the assessment.

One authority also raised that the new burdens assessment does not include the cost of support in accommodation. However, we are clear that tier one local authorities will be appropriately funded to meet the new ‘support in safe accommodation duty’ being brought into effect through the Domestic Abuse Act through separate funding which has already been announced.

LGA feedback

The LGA commented on the fact that the impact of the priority need changes will be felt differently depending on local areas, this is something we have factored into our allocations formula and pressures different local areas face. They commented that there may be a cost savings when local authorities are assessing priority need for victims of domestic abuse as they will no longer need to do the vulnerability test.

They raised some concerns around the cost of temporary accommodation as this may vary depending on area, however our analysis and allocations has taken this into account and areas with highest costs will receive more funding. There could be further cost impacts as a result of local authorities not having enough single person accommodation. LAs are expected to house households based on their needs and in line with suitability requirements. Finally, they noted about potential costs of furnishing new units of temporary accommodation. As temporary accommodation varies depending on local area, and can be private, social or B&B, among many other types, it would be for the local authority to decide on when it is appropriate to fund cost of furnishing new units.

Providing the resources

Q14. If there are net additional costs, has the lead department identified where the funding for this new burden is coming from and agreed to fully fund them? Please give details.

A14. It has been agreed with HMT that the cost will be funded from MHCLG’s settlement in the 2020 Spending Review. The 2021-22 cost has been factored into our 2021-22 budgets. We will consider future years funding as part of the next Spending Review.

Government has committed to fully fund the policy proposal.

Q15. What costing evidence/analysis do you have/are you going to undertake to demonstrate that the funding is sufficient, and when will you be providing this?

A15. There are three key assumptions that feed into our estimates of the cost to local authorities. The second two rely on data that has not been published but has been rapidly processed in order to inform these estimates.

• Number being owed a main duty – These costs are based on estimates using the annual homelessness statistics of the number of households moving into Temporary Accommodation as a result of this change and we will monitor this using quarterly H-CLIC publications.
• Temporary Accommodation unit cost – unpublished research by the LSE suggested that local authorities were incurring a cost of £10 per household per night. We have uprated this to future years, taking into account the frozen housing benefit subsidy limits
• Length of stay/impact on Temporary Accommodation – we assume that households moving into Temporary Accommodation generally stay there until they are allocated a social rented property. Without a subsequent rise in social lettings, we therefore anticipate temporary accommodation numbers and costs will accumulate.

See Homelessness annual statistics.

Q16. If costs are to be met by charging, do these cover the full net additional costs, and do authorities have the freedom to determine the fee levels consistent with recovering reasonable costs?

A16. N/A

Q17. If your assessment is that the proposal will result in no additional costs being placed on local authorities, how will you ensure that this is the case?

A17. N/A

MHCLG New Burdens Team Sign Off

Q18. Have you shared your assessment with the New Burdens Team?

A18. Yes

Departmental Finance Director Sign Off

Q19. Please state if this is a first or a final assessment of your proposal. If first please indicate when a final assessment will be submitted.

A19. Final proposal

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Certification that the estimated net additional costs falling on local authorities has been assessed in accordance with the guidance on new burdens and that this will be fully funded. That to the best of finance director’s knowledge the estimates are a true and fair assessment of the net additional costs falling on authorities. Confirmation that their department is aware that if the proposed policy or initiative is implemented, there may be an independent post-implementation scrutiny carried out (paid for from within their department’s existing resources) and that under or over-payments of grant revealed by the scrutiny may inform future decisions on funding.

Signed: David Thomas

Name: David Thomas (Finance director)

Date: 26/05/2021

Address: Ministry of Housing, Communities and Local Government, 2 Marsham Street, London, SW1P 4DF

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For completion by the MHCLG New Burdens Team:

Date received: 26.05.21…………… Reference number: 20/09/20:24………………