Official Statistics

Use of Discretionary Housing Payments, analysis of end of year returns from local authorities: April 2019 to March 2020

Published 13 August 2020

Applies to England and Wales

1. Main stories

Main headlines

In 2019 to 2020, central government contributed £139.5 million to Discretionary Housing Payments (DHPs) funding in England and Wales.

Of the local authorities (LAs) who submitted returns:

• 41% spent more than their central government allocation of Discretionary Housing Payment (DHP) funding, which means they topped up their allocation with their own funding
• 6% spent 100% of their allocation
• 52% spent less than their allocation, although many of these spent most of their allocation (only 12% of LAs spent less than 90% of their allocation)
• 98% of the total central government allocation was spent

2. What you need to know

DHP is a discretionary scheme that allows local authorities (LAs) to make financial awards to people experiencing financial difficulty with housing costs who qualify for Housing Benefit (HB) or housing entitlement in Universal Credit (UC).

As part of the welfare reforms package introduced from 2011, the government has significantly increased its contribution towards DHPs to help LAs support those affected by some of the key changes to HB, namely:

• the introduction of the benefit cap, which is administered through HB and UC
• the removal of the spare room subsidy (RSRS) in the social rental sector
• the local housing allowance (LHA) reforms

In total in 2019 to 2020, central government allocated £139.5 million of DHP funding to be distributed amongst English and Welsh LAs. Table 1 shows central government funding for DHPs for the financial years 2011 to 2012 to 2019 to 2020.

DHPs and Scotland

DHPs for Scotland were devolved from 1 April 2017, under the Scotland Act 2016 implementing the Smith Commission Agreement.

Read information and statistics on DHPs in Scotland.

Map 1: Percentage of central government DHP allocation spent by local authority, April 2019 to March 2020.

Source: DHP financial returns for the period April 2019 to March 2020.

3. Central government funding for DHPs

Table 1: DHP government funding (£millions )

DHPs	2011/12	2012/13	2013/14	2014/15	2015/16	2016/17	2017/18	2018/19	2019/20
	Great Britain	Great Britain	Great Britain	Great Britain	Great Britain	Great Britain	England & Wales	England & Wales	England & Wales
Core	20	20	20	20	15	20	18	18	18
Local Housing Allowance	10	40	40	40	25	30	27	27	27
RSRS	-	-	55	60	60	60	54	54	40.5
Benefit cap	-	-	65	45	25	40	67.5	54	54
Total	30	60	180	165	125	150	166.5	153	139.5
Additional over Core	10	40	160	145	110	130	148.5	135	121.5

Source: Housing Benefit subsidy circulars.

The allocation methodology of the central government contribution towards DHPs to each LA in 2019 to 2020 was shared with the LA Associations for England and Wales. Although DHP funding was notionally allocated for each reform, LAs have discretion about how they actually use the funding.

DHPs are awarded at the discretion of each LA and can provide help with on-going housing costs or one-off expenses (for example, moving costs). In addition to the central government contribution, English and Welsh LAs are able to top up DHP funding up to a maximum of two and a half times this figure using their own funds (for instance, a local authority receiving £100,000 as DHP central government funding could top up this amount with up to £150,000 of their own funds, giving them a maximum possible total expenditure of £250,000).

At the end of each financial year, the department requires that LAs provide details of their DHP expenditure for financial accounting purposes. This data includes details of how much of their central government contribution an LA has spent, and any additional expenditure above that.

Reflecting the need for additional accountability following the large increase in funds for DHPs, from 2013 to 2014, LAs were requested to provide details of their use of DHP funds. This monitoring information is being collected twice yearly; in the middle and at the end of the financial year. These returns are collated as management information to help inform policy development of the administration of DHP and the allocation of funds in subsequent years. They also provide information on how LAs are using DHP funding to support those affected by the different welfare reforms.

Due to the high profile and public nature of DHP usage, and in line with the Official Statistics guidance, the financial and monitoring returns from LAs have been published as an on-going Official Statistic since December 2013.

This Official Statistic is released biannually with both yearly releases covering information collected through the monitoring return, and the end of year release also includes information from the financial returns. The next release in this series will be the analysis of the mid-year monitoring returns for April 2020 to September 2020.

The current statistical release presents a summary of the end of year financial and monitoring returns, including a further breakdown by reform and intended purpose of DHP from these returns, covering the financial year from April 2019 to March 2020.

These statistics have not been assessed by the UK Statistics Authority, and have not been designated as National Statistics.

Read previous releases of this series.

Further information on the statistics in this release.

4. DHP financial returns

The figures presented below are based on the financial returns received from LAs (315 out of 339 received by 8 July 2020). These returns contain information on actual expenditure during the financial year. Read the underlying LA data.

Caution should be taken in comparing these figures to those published in previous years. This is because, compared to previous years, a larger number of local authorities did not provide a return, presumably because of disruption caused by the coronavirus (COVID-19) pandemic. This means that the total figures shown in Table 2 appear lower than in previous years.

Table 2: Reported DHP expenditure for the financial year 2019 to 2020, compared with the overall central government allocation for 2019 to 2020 by country.

	Number of DHP awards	DHP allocation of LAs who submitted a Financial Return (£)	DHP spent excluding additional funding provided by LAs (£)	Spent as percentage of allocation	DHP spent including additional funding provided by LAs (£)	Spent as percentage of allocation
England	226,956	119,925,398	117,131,888	98%	123,580,689	103%
Wales	23,404	8,144,842	8,144,775	100%	8,456,101	104%
England and Wales	250,360	128,070,240	125,276,663	98%	132,036,790	103%

Source: DHP financial returns for the period April 2019 to March 2020.

Notes:
(i) 24 out of 339 LAs have not provided a financial return and therefore the DHP spend and allocation for these LAs has not been included.
(ii) The number of DHP awards does not represent the number of claimants receiving DHPs. Claimants can receive more than one DHP award in a year.

4.1. DHP expenditure distribution

Chart 1 and table 3 show how many Local Authorities, of those providing the information, spent different proportions of their DHP allocation. As the table shows, 41% of Local Authorities spent more than their allocation of DHP funding, which means they topped up their allocation with their own funding. 6% spent 100% of their allocation. 52% spent less than their allocation, although many of these spent most their allocation (only 12% of LAs spent less than 90% of their allocation).

Chart 1: DHP expenditure distribution

Source: DHP financial returns for the period April 2019 to March 2020.

Note: (i) 24 out of 339 LAs have not provided a financial return and therefore the DHP spend and allocation for these LAs has not been included.

Table 3: DHP expenditure distribution

Percentage of allocation spent (%)	Number of LAs	Cumulative Number LAs	Percentage of LAs	Cumulative percentage of LAs
0<10	0	0	0	0
10<20	0	0	0	0
20<30	0	0	0	0
30<40	0	0	0	0
40<50	0	0	0	0
50<60	3	3	1	1
60<70	6	9	2	3
70<80	5	14	2	4
80<90	23	37	7	12
90<100	128	165	41	52
100	20	185	6	59
100<110	94	279	30	89
110<120	20	299	6	95
120<130	8	307	3	97
130<140	2	309	1	98
140<150	1	310	<0.5	98
150<160	5	315	2	100
>160	0	315	0	100

Source: DHP financial returns for the period April 2019 to March 2020.

Notes:
(i) 24 out of 339 LAs have not provided a financial return and therefore the DHP spend and allocation for these LAs has not been included.
(ii) Percentages may not sum to 100% due to rounding.

4.2. Amount over or under-spent

Table 4 shows the extent to which LAs spent more or less than their central government contribution towards DHPs. In England and Wales, of those providing the information, 131 LAs spent more than their allocation, by around £7.2 million. Conversely 165 LAs in England and Wales spent less than their allocation, leaving approximately £2.8 million of DHP central government funding unspent. 19 English and Welsh LAs spent exactly 100% of their allocation.

Table 4: Amount over or under-spent

	Overspend		Underspend		Exact Spend
	Count	Amount	Count	Amount	Count
England	113	6,448,801	162	2,793,510	19
Wales	17	311,326	3	67	1
England and Wales	130	6,760,127	165	2,793,577	20

Source: DHP financial returns for the period April 2019 to March 2020

Note: (i) 24 out of 339 LAs have not provided a financial return and therefore the DHP spend and allocation for these LAs has not been included.

5. DHP monitoring returns

The figures presented in this section are taken from the monitoring returns described in the methodology section, illustrating how much funding LAs have spent on each reform and the intended purpose of the DHP. These results are based on the returns from 265 English and Welsh LAs (out of 339 at the time of publication) who responded by 12 June 2019. The underlying LA data is available.

In their returns, 237 local authorities reported the number of DHP awards they had given to Universal Credit recipients. In these local authorities, 47% of DHP awards (85,623 out of 182,941 DHP awards in those local authorities) had been awarded to Universal Credit recipients.

Table 5 shows how much DHP funding LAs reported spending on each welfare reform measure. It shows that the welfare reform related to the highest DHP expenditure was RSRS (25% of expenditure), followed by the Benefit Cap (19%) and the LHA (14%). 36% of expenditure was unrelated to welfare reforms.

Table 5: Expenditure and percentage of total spend attributed to each welfare reform measure

Welfare Reforms for which DHP was awarded	Amount spent (£)	Percentage of total spent
Benefit Cap	22,175,746	19%
RSRS	29,715,698	25%
LHA	16,716,610	14%
Combination of welfare reforms	7,051,536	6%
Award not for welfare reforms	42,776,666	36%
Total	118,436,255	100%

Source: DHP Monitoring returns for the period April 2019 to March 2020.

Notes:
(i) The DHP expenditure shown here is for the 265 out of 339 LAs who have submitted a monitoring return.
(ii) Figures may not sum due to rounding.

5.1. DHP expenditure compared with DHP allocation by reform measure

Table 6 compares the levels of DHP expenditure attributed to each welfare reform measure with the overall amounts nominally allocated for each reform measure from the overall DHP funding allocation for 2019 to 2020.

Table 6: DHP expenditure compared with DHP allocation by reform measure.

Welfare Reforms for which DHP was awarded	Amount spent (£)	Amount allocated (£)	Percentage of total spent
Benefit Cap	22,175,746	43,719,650	51%
RSRS	29,715,698	32,655,187	91%
LHA	16,716,610	22,304,953	75%

Source: DHP monitoring returns for the period April 2019 to March 2020

Notes:
(i) The DHP expenditure shown here is for the 265 out of 339 LAs who have submitted a monitoring return.
(ii) Table excludes the non-reform and combined awards and does not include the core budget in the allocations.

5.2. DHP expenditure by purpose of DHP

Table 7 shows the percentage of total spend by country attributed to each purpose of DHP category.

Table 7: DHP expenditure by purpose of DHP

	To help secure and move to alternative accommodation (e.g. rent deposit) (%)	To help with short term rental costs while the claimant secures and moves to alternative accommodation (%)	To help with short term rental costs while the claimant seeks employment (%)	To help with on-going rental costs for disabled person in adapted accommodation (%)	To help with on-going rental costs for a foster carer (%)	To help with on-going rental costs for any other reason (%)	Number and percentage of local authorities providing a monitoring return with a breakdown of purpose
England	16	12	15	3	<0.5	54	223 (70%)
Wales	13	12	13	2	<0.5	59	14 (64%)
England and Wales	16	12	15	3	<0.5	54	237 (70%)

Source: DHP monitoring returns for the period April 2019 to March 2020.

Note: (i) The DHP expenditure shown here is for 237 out of 339 LAs who have submitted a monitoring return and completed the breakdown of expenditure on each reform by purpose of DHP. 28 LAs provided a monitoring return without providing a breakdown for purpose of DHP and are not included in this table.

5.3. Percentage of DHP expenditure on each DHP purpose category, by reform measure

Table 8: Percentage of expenditure attributed on each DHP category, by reform measure.

Welfare Reforms for which DHP was awarded	To help secure and move to alternative accommodation (e.g. rent deposit) (%)	To help with short term rental costs while the claimant secures and moves to alternative accommodation (%)	To help with short term rental costs while the claimant seeks employment (%)	To help with on-going rental costs for disabled person in adapted accommodation (%)	To help with on-going rental costs for a foster carer (%)	To help with on-going rental costs for any other reason (%)
Benefit cap	5	7	44	<0.5	<0.5	44
RSRS	9	18	8	7	<0.5	57
LHA	10	20	15	2	<0.5	54

Source: DHP monitoring returns for the period April 2019 to March 2020.

Notes:
(i) The DHP expenditure shown here is for the 237 out of 339 LAs who have submitted a monitoring return, and completed the breakdown of expenditure on each reform by purpose of DHP. 28 LAs provided a monitoring return without providing a breakdown for purpose of DHP and are not included in this table.
(ii) Percentages may not sum to 100% due to rounding

6. Where to find out more

Information on Official Statistics is available on the UK Statistics Authority website.

More information about DWP statistics.

7. Contact information

Responsible Analyst: Graham Walmsley
Email: [email protected]

Author: Lucy Page
Email: [email protected]

DWP Press Office: 0203 267 5144

Comments? Feedback is welcome

Published 13 August 2020
Next edition December 2020