Guidance

S11/2019 revised: Rents for Social Housing from 2020 to 2021 for local authorities in England

Updated 27 November 2019

Applies to England and Wales

Who should read

All Housing Benefit staff.

Action

For information.

Guidance Manual

The information in this circular does not affect the content of the Housing Benefit (HB) Guidance Manual.

Queries

For general queries about the funding detailed in this circular, contact: [email protected]

For queries about the actual payments, contact: [email protected]

For queries about distribution of this circular, contact: [email protected]

Revisions

This circular is being reissued as the heading of paragraph 12 has been changed and some of the terminology within that paragraph. We apologise for any inconvenience caused.

Introduction

1. This circular confirms the disapplication of the Housing Benefit (HB) Rent Rebate Subsidy Limitation (RRSL) scheme for England only from 1 April 2020.

Rents for Social Housing 2020-21

2. In October 2017, government announced its intention to set a long term rent deal for social housing landlords in England. This new policy will permit annual rent increases on both social rent and affordable rent properties of up to consumer price index (CPI) plus one percentage point from 2020, for a period of at least five years.

3. In February 2019, government published its response to its consultation on the proposed Rents for Social Housing policy for 2020-21. This confirmed the government would proceed with the new policy and directed the Regulator of Social Housing to issue a Rent Standard in respect of 2020-21.

4. This Rent Standard has been set for all registered providers of social housing; in other words, local authority (LA) registered providers as well as private registered providers.

5. The Rent Standard will apply to all registered providers in England and will come into effect from 1 April 2020.

6. The Regulator of Social Housing undertook their own public consultation in 2019 on the new Rent Standard and the outcome of this consultation is expected in late October or early November 2019.

Impact on Housing Benefit subsidy

7. As the new Rent Standard will apply to LA rent increases in the same way as other social rented sector rents, there is no longer a need to apply RRSL in England to ensure LA rent increases do not exceed formula rents.

8. Consequently, government will disapply the RRSL scheme in HB subsidy from 1 April 2020, for England only.

9. The Income-related Benefits (Subsidy to Authorities) Order 1998 will be amended to remove the RRSL provision, for England only, in the 2020 Subsidy Order Amendment (to come into force in Autumn 2020). This will legislate the removal of limiting of rent in HB subsidy from 1 April 2020.

10. For England only, the 2020-21 HB subsidy claim forms (mid-year estimate and final), and corresponding claim form guidance, will be amended to remove the RRSL formula calculation within HB subsidy. The updated 2020-21 HB subsidy final claim forms and guidance notes were issued on 1 October 2019.

11. The HB RRSL scheme will continue in Wales. It does not cover Scotland.

Action where properties fall under the new Rent Standard

12. Where properties fall under the new Rent Standard for which HB has been paid and subsidy has, or is to be claimed, as Housing Revenue Account (HRA) Rent Rebate the following action is required:

• at the point that either the LA or the Regulator of Social Housing identify rent has been set by the LA that is not compliant with the Rent Standard the LA must assess the impact of this on any affected HB claims, and recalculate HB assessments
• for the purposes of claiming HB subsidy, any resulting overpayment as a direct result of a non-compliant rent being charged for LA housing stock under the new Rent Standard will need to be calculated and classified as a ‘technical overpayment’ for either the current year or previous year, as appropriate