Official Statistics

Use of Discretionary Housing Payments: analysis of end-of-year returns from local authorities, data for April 2022 to March 2023

Published 13 July 2023

Applies to England and Wales

The latest release of these statistics can be found in the collection of Discretionary Housing Payments statistics.

1. Main stories

Here are the main headlines about the use of Discretionary Housing Payments (DHPs) for the financial year ending March 2023 based on information received from 320 out of 331 Local Authorities in England and Wales:

• in the financial year ending March 2023, Local Authorities had spent 115% of their combined allocations for the year, compared to 105% in the financial year ending March 2022. It should be noted that DHP funding was higher in the financial year ending March 2022, at £140 million, compared to the financial year ending March 2023 where it was £100 million
• DHP spending varied between Local Authorities, with 42% of Local Authorities spending over 105% of their allocation, 48% of Local Authorities spending between 95% to 105% of their allocation and 11% of Local Authorities spending less than 95% of their allocation
• for the 307 Local Authorities that submitted awards data, the total number of DHP awards given out in the financial year ending March 2023 was 179,005
• 64% of DHP expenditure was related to a welfare reform, with RSRS accounting for the greatest share of expenditure (27%)
• over a quarter (27%) of DHP expenditure was related to moving accommodation, while 13% was used for short-term rental costs while seeking employment

2. What you need to know

Discretionary Housing Payments (DHPs) can be paid to those entitled to Housing Benefit or the housing element of Universal Credit who face a shortfall in meeting their housing costs. Local Authorities have broad discretion to spend in line with their local priorities. This includes deciding how much will be paid and for how long the claimant will receive the payment. A DHP can be awarded to cover a rent shortfall, a rent deposit, rent in advance, or other costs associated with moving.

The government provides funding to LAs for DHPs. For the financial year ending March 2023, the government provided £100 million of funding. This funding was allocated between English and Welsh LAs in two stages: £98 million was allocated at the start of the financial year and remaining £2 million was allocated at the midpoint of the financial year.

LAs are encouraged to manage their DHP budget, the level of DHP spending does not necessarily reflect the level of demand for DHPs. In addition to the government contribution, LAs can top up DHP funding up to a maximum of two and half times this figure using their own funds.

These statistics cover the financial year ending March 2023. The findings are based on returns from 320 out of 331 Local Authorities.

Further guidance on these statistics is provided in the More information section of this publication and in the background information and methodology document.

3. How much of their DHP funding did Local Authorities spend?

In the financial year ending March 2023, the Local Authorities who provided information had spent £111 million on DHPs which represents 115% of their combined allocations. This compares to the previous financial year ending March 2022, where Local Authorities spent £142 million on DHPs which represented 105% of combined allocations. Caution should be taken when comparing expenditure to previous years as different Local Authorities responded in each year. Moreover, it should be noted that the government funding for DHPs was £140 million in the financial year ending March 2022, while funding for the financial year ending March 2023 was £100 million.

The Local Authorities that provided information for number of awards made 179,005 awards to claimants in the financial year ending March 2023. For the 307 Local Authorities that provided this information, the total expenditure on DHPs was £109.5 million. While this suggests that the average DHP award was £612, this figure should be treated with caution, since there are a variety of different types of DHP awards (for example, a single DHP award to cover a deposit is likely to have a different value to a DHP award paid on a weekly or monthly basis).

42% of Local Authorities spent over 105% of their DHP allocation

Local Authorities varied in the proportion of their DHP allocation that they had spent, with 42% of Local Authorities spending over 105% of their allocation and 11% spending under 95%. Just under half (48%) of Local Authorities spent between 95% and 105% of their allocated funding: that is, they spent slightly more or slightly less than their allocated funding.

In the previous financial year, the pattern of spending showed Local Authorities spending a lower proportion of their allocated funding: 28% of Local Authorities who responded had spent less than 95% of their allocation, while 25% had spent over 105%. However, as mentioned above, government funding for DHPs was higher the previous year than in the year ending March 2023.

Almost 3 in 10 reporting Local Authorities spent between 99% and 101% of their allocation

When looking more closely at Local Authorities that spent between 95% and 105% of their allocations, 93 of them spent more than 99% and less than or equal to 101% (i.e very close to 100% of their allocation). This is 29% of all Local Authorities that provided a return. Of these, 14 Local Authorities reported spending exactly the same as their allocation.

Local Authorities in Wales spent the highest proportion of their combined allocations, Local Authorities in Outer London spent the least

There was some variation in the proportion of combined allocation spent by region, with Local Authorities in Wales spending the greatest proportion of their combined allocations (155%) and Local Authorities in Outer London spending the least (105%). In the previous financial year ending March 2022, Local Authorities in Wales had also spent the greatest proportion of their combined allocations (131%) with Local Authorities in the East Midlands spending the lowest proportion (97%).

4. How much was spent on each welfare reform

64% of DHP expenditure was related to welfare reforms

64% of DHP expenditure was recorded as related to welfare reforms. Of the individual welfare reforms, the Removal of the Spare Room Subsidy (RSRS) was recorded as being responsible for the largest proportion of DHP expenditure (27%), followed by Local Housing Allowance (LHA) reforms (18%) and the Benefit Cap (12%), with 7% of expenditure related to a combination of welfare reforms. Just over a third (36%) of DHP expenditure was reported as unrelated to welfare reforms.

In the previous financial year, a similar proportion (63%) of DHP expenditure was recorded as being related to welfare reforms.

5. What DHPs were awarded for

Over a quarter of expenditure was related to moving to alternative accommodation

Over a quarter (27%) of DHP expenditure was related to moving to alternative accommodation. 13% was to help with short-term rental costs while the claimant sought employment, while 3% went towards costs for disabled people in adapted accommodation and 0.3% went towards ongoing rental costs for a foster carer.

Over half (58%) of DHP expenditure was given to help with ongoing rental costs, for a reason unrelated to the above. This is similar to the percentage reported in the previous financial year ending March 2022 (56%).

6. More information

DHP Government Funding

Total DHP funding for the financial year ending March 2023 is £100 million. Funding for DHPs has historically been split into four streams (Core, Local Housing Allowance, Removal of the Spare Room Subsidy and Benefit Cap) for DWP’s calculation purposes, although Local Authorities are not required to take account of these streams in allocating their funding. More information about funding levels over time can be found in Table 1 in the data tables document of this statistics release.

Welfare Reforms

Since the welfare reforms in 2011, the government has significantly increased its contribution to DHPs. This is so that Local Authorities can support those affected by the Benefit Cap, Removal of the Spare Room Subsidy (RSRS) and reforms to the Local Housing Allowance (LHA). The background information and methodology document provides more detail.

Data Source

At the midpoint and end of each financial year, Local Authorities provide details of their DHP expenditure for financial accounting purposes, which they are legally required to do. 320 out of 331 Local Authorities provided this information in time for inclusion within these statistics. Of these 320 Local Authorities, 307 gave information about the number of DHP awards they gave out in the financial year.

In addition to financial information, Local Authorities are also asked, at the mid-point and end of each financial year, to provide additional monitoring information. Not all Local Authorities supply some or all of the monitoring information requested. Of the 320 Local Authorities that submitted a return, 302 provided a breakdown of expenditure by welfare reform and 289 provided a breakdown of expenditure by purpose of DHP. More information about both the financial information and monitoring information provided in returns can be found in the background information and methodology document.

Release Schedule

These Official Statistics are released biannually. This current statistical release presents a summary of the end-of-year claim forms that include both financial and monitoring information. They cover the financial year ending March 2023.

The next release in this series will be based on mid-year monitoring and financial returns covering April 2023 to September 2023. It will be published in December 2023.

Status

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

7. Where to find out more

These statistics are released as part of a series of Discretionary Housing Payment statistics.

Read information about Discretionary Housing Payments, including how to claim them.

8. Contact information

Responsible Analyst: Stephanie De Miranda
Email: [email protected]

Author: Liam Hearn
Email: [email protected]

For media enquiries, please contact the DWP press office.

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Published: 13 July 2023

Next edition: December 2023