Exempt Accommodation and Unitary Authorities

I work for a care leavers support team in a unitary authority. We provide temporary accommodation for young people and charge relevant eligible service charges. We are having difficulty in having this arrangement classified as exempt accommodation to obtain the maximum amount of HB.

The definition of exempt accommodation states that the accommodation must be provided by a ‘non-metropolitan county council.’ We have been told by our HB section that it has to be a county council not a unitary authority to qualify as exempt. Our argument is that unitary authorities have taken on the responsibilities of a county council and therefore should be accepted under this definition. Surely the key part of the definition of the status is the ‘non-metropolitan’ part.

Has anyone else in a unitary authority had difficulties in this regard? Does anyone have thoughts or suggestions?

Thanks

To be honest I am not sure you have a case, The HB circular refers to Non-Metropolitan County Council. THe National Housing Federation breifing refers to Upper tier.

I see your argument, a profitable future in Law probably awaits you…....

Still.

Let me know if you win…. 

Good Luck….

Is this a bedroom tax query? Or just general rent restrictions? I ask this because HB for someone who pays rent to a unitary authority is in the form of a rebate and normal private sector rent restrictions do not apply. A council does have a general power to restrict excessive rents for HB but it should not really have to apply that to its own rents. It should not be necessary to use that ingenious exempt accommodation argument ... unless we’re talking about bedroom tax

Thanks for your responses.

The council house stock was farmed out some time ago. Our provision is ad hoc and outside the housing revenue account, so rent rebates do not apply.

The heart of the problem is that if we do not get exempt status for our temporary accommodation provision HB will be paid under homelessness provisions. The maximum HB subsidy payable under these is calculated using a standard formula (see HB circular S1/2011). Properties classed as exempt do not have such a fixed ceiling, allowing more realistic levels of service charges to be met.

I fail to see any rational or justifiable policy reasoning that allows county councils to have the advantage of exempt status, whilst denying it to unitary authorities who have exactly the same statutory obligations and responsibilities.

If your service users are liable to make payments to the Council, I guarantee you it’s a rent rebate: this applies to any kind of accommodation whatsoever, provided by any LA department for any purpose [actually there is one exception - see legal extract below].  For example I recently dealt with a case where a unitary authority Highways department had acquired some dwellings under compulsory purchase for a road widening scheme.  One of them was tenanted and because the landlord’s interest had passed to the LA it was a rent rebate case.  Councils call these “non-HRA rebates”, and if they use the market-leading Northgate software they use the acronym “LANHRA”.

The subsidy limits for homeless accommodation are another issue: some of those cases are rebates and some are allowances, but either way the DWP will only fund the HB up to the limits set out Articles 17A to 17C of the Subsidy Order.  If it costs more than that to procure the accommodation then the LA is going to have to subsidise the shortfall one way or another.

So there are two issues here:

- do your service users have a tenancy/licence granted by the Council?  If they do, it’s a rebate and exempt accommodation becomes irrelevant
- is the accommodation provided in order to discharge a Housing Act 1996 homelessness function in a way that falls within the special subsidy rules (B&B or accommodation procured from a third party under a licence or short lease)?  If it is, DWP is only paying 90% LHA plus £60 and then it’s an internal squabble as to which bit of the Council covers the rest of the costs of provision.

The law on rebates v allowances is found in the following extracts from the Social Security Administration Act 1992:

134(1A) Housing Benefit in respect of payments which the occupier of a dwelling is liable to make to a housing authority shall take the form of a rent rebate or, in prescribed cases, a rent allowance funded and administered by that authority. The cases that may be so prescribed do not include any where the payment is in respect of property within the authority’s Housing Revenue Account. [The “prescribed cases” are gypsy sites - there is a boring technical reason for that, it isn’t relevant here]

(1B) In any other case housing benefit shall take the form of a rent allowance funded and administered by the local authority for the area in which the dwelling is situated ...

191 In this Act, unless the context otherwise requires–

“housing authority” means a local authority, [or a new town corporation] or the Development Board for Rural Wales;

“local authority” means–
(a) in relation to England, the council of a district or London borough, the Common Council of the City of London or the Council of the Isles of Scilly

I think “district” includes unitaries for the reasons set out in your original post - they have the legal functions of both a district and a county.  If they didn’t, there would be no provision for anyone to get HB at all in a unitary authority!

Paul Codd - 25 July 2013 10:57 AM

The council house stock was farmed out some time ago. Our provision is ad hoc and outside the housing revenue account, so rent rebates do not apply.

Anorak is better at this stuff than me. But if you have a portolio of temp, then it follows that some of it might fall under different rules.

I suspect the “boring & technical” reason for the caravan/traveller sites is actually vaguely relevant.  IIRC, the boring & technical was to do with separation of rent for pitch & vehicle on Borough/City/County Council owned sites & the fact that County Councils weren’t HB administrative bodies & therefore it wasn’t Rebate, whereas the others were & a claimant couldn’t have Rebate (for LA owned pitch) and Allowance (for vehicle) for the same site at the same time, so those in unitary authorities were missing out.

If I’ve remembered this right, it’s sort of relevant.  County Councils aren’t HB administrative bodies, and also aren’t responsible for provision of housing per the above scenario - whether it’s for a caravan pitch or another form of accommodation, that’s something that falls to the district or unitary authority.  Therefore property owned & rented out by the County in a two tier isn’t “council housing” in that sense & can’t be rebate.  If you’re unitary or district, and the rent liability is to the local authority, it must be rebate.

(I’m waffling, it’s late afternoon, feel free to ignore me)

Who said that?

Just a bit more research to report back.  I don’t think county councils exist any longer in the unitary areas - it’s not a case of there being two councils under one roof, the county has been abolished and its functions have been absorbed by the district.

The first two waves of unitary councils in England (including N Lincs) exist as a result of recommendations made by the Local Government Commission under the Local Government Act 1992.  Sections 13 and 14 describe the changes that the Commission has the power to recommend:

13(1) The Secretary of State may request the Electoral Commission to recommend in respect of a specified area in England— .
(a) whether a structural change should be made

14 (1) For the purposes of this Part— .
(a) a structural change is the replacement, in any non-metropolitan area, of the two principal tiers of local government with a single tier

(2) In subsection (1)(a) above—

(b)the reference to the replacement, in any such area, of the two principal tiers of local government with a single tier is a reference to either— .
(i)the transfer to a council for a county consisting of that area of the functions in relation to that area of district councils; or
(ii)the transfer to a district council for that area of the functions in relation to that area of a county council.

So in North Lincs, the functions of Lincolnshire County (or it may have been Humberside) are now performed by the district council known as North Lincolnshire.  Sections 134 and 191 of the Administration Act says that HB for liability to a district council takes the form of a rebate.  Therefore in any case where accommodation is provided under any of the functions of the entire N Lincs Council, including former county functions, and where the occupier’s liability is to N Lincs Council, HB must be in the form of a rent rebate (except for caravan sites where, for the reasons Lorraine mentions, HB has to be paid as a rent allowance).  This means that it is not necessary for the “exempt accommodation” rules to kick in, because the case is not subject to LHA/LRR in the first place ... there is nothing for it to be “exempt” from.  The Council can award HB on the full rent that it charges without any restriction.  But its subsidy will be capped if these are HA 1996 functions.

If I am wrong about that, it means that the rules are different in England from the way they are in Scotland and Wales (s191 of the Administration Act defines “local authority” in a way that leaves no doubt at all in Scotland and Wales that all LA liabilities attract rebate).

Can you tell us Paul who the landlord of your temps are?

Is it a Housing association?

The unitary authority, North Lincolnshire Council (NLC) are the landlords. The care leavers team within the authority administer the properties and the accounts. As I mentioned earlier NLC no longer have a council housing stock.

I am becoming increasingly intrigued by the definition ‘non-metropolitan county council’ itself and the apparent exclusion of unitary authorities. What was (and is) the policy intention of excluding authorities that hold both the responsibilities of a county and district councils under one administration?

As far as I am aware there is no compensatory funding paid to these authorities, so why exclude them from this bona fide funding stream to help meet genuine expenditure incurred supporting vulnerable people? Surely it cannot be just because they think there may be some collusion if the service provider and the HB administrator are part of the same authority. The books come under the same auditing regime after all.

As I indicated earlier even if you disagree with a particular policy affect on benefit regulations, at least you can generally see what they were getting at. In this case I simply do not understand the reasoning that results in this anomaly. Is it simply that the law has not been updated? The relevant legislation in defining what is meant by the different types of local authority refers to a local government act of 1972. (sorry to be imprecise on particular regs but I’m on leave at the moment)

As far as I can remember, this is a combination of bog up and conspiracy.  Back in 1996, when exempt accommodation was exempted, the term was simply introduced as a way of excluding supported housing from the (then) new private sector rent restrictions, which would otherwise have applied.

However the definition was not extended to lettings by housing authorities because, as has been pointed out, there was no legal way of restricting these.

But, at the same time, and separately, many housing authorities were using the fact that no restriction could be made, to provide expensive accommodation for people who they had a statutory obligation to rehouse.  Charges of up to £400 per week were common at the time when this was a lot of money.

So the government introduced subsidy penalties rather than restrictions on benefit (Under UC I think these translate into actual restrictions).  My understanding is that these only apply to people who are housed under homeless person’s legislation, although I’m not a subsidy expert, so they may not need to be applied where people are not housed under this legislation.

Thanks to all who responded to this post especially HB Anorak. Having had the chance to reflect on your posts and other info I agree with you that it should be a rent rebate rather than an allowance and therefore exempt status is irrelevant. I think the problem is as you indicated historical in that some people in the council see a unitary authority as a county council alongside a district council under one roof, rather than simply one authority. I shall respond to our HB section along these lines and hopefully get the matter sorted.

Cheers