Saturday, October 13, 2007

Pathfinder scheme criticized in Blackpool

There is an interesting article here on the new government ‘pathfinder scheme’ for the payment of housing benefit. This was initially set up in 2003 in a few pilot areas and is gradually being rolled out across the country. A fixed rate of benefit, known as a local housing allowance, is paid for all properties of the same type, and which is not linked to individual rents. The tenant can therefore shop around, and if he finds a property with a cheaper rent, can keep the difference.

However the aspect of the pathfinder scheme which annoys landlords is that the option which the parties had under the old scheme for tenants to elect to have their rent paid direct to the landlord, is no longer available. Some of the Blackpool landlords are claiming that the rent payments are too much of a temptation for some tenants who are using the money for drink, drugs and lottery tickets.

The problem, they claim, is particularly acute in Blackpool as it has such a large private rented sector. It is also apparently the ‘drug death capital of the UK’, and a local coroner has recently claimed that benefit money is helping to fund the cities drug problem.

Landlords have been complaining about the pathfinder scheme ever since it was first set up in 2003, claiming that many tenants will not be able to resist the lure of these lump sums of money being paid to them, to fund their drug and similar problems. However areas where the scheme has been piloted have not apparently had that many problems. Skeptics claim that this is because the rate of benefit set in pathfinder pilot areas has been more generous than in other areas. When the scheme is rolled out nationwide, they claim, this generous rate will not continue and huge problems will result.

If a tenant in receipt of local housing allowance falls into arrears, there are two options for the landlord:

1. To try to persuade the Local Authority to pay the rent to him direct. There is a general rule that this will be done if the tenant is in arrears of more than 8 weeks. The DWP Resource Centre on benefit states on this point

"If rent arrears are owed, the local authority will arrange to make payments direct to the landlord unless it is not in the customer’s overriding interests to do so. However, landlords are encouraged not to wait for the 8-week period to be reached before contacting the local authority."

The landlord may also be able to persuade the Benefit Office to pay the rent direct on the basis that the tenant is ‘vulnerable’. Information on how Officers are to identify potentially vulnerable claimants can be found in paragraph 5.30 onwards in the Local Housing Benefit Allowance Guidance Manual, to be found online at the DWP web-site.

The main criticism of both of these options from landlords, is that it takes time for the benefit office to be persuaded and the new arrangement set up, during which time they are not receiving any rent.

2. To bring proceedings for possession. This is unpopular with landlords as it can take up to six months (more if the landlord is unlucky) to recover possession of the property, during which time he will not be receiving rent and will have to pay court and legal fees.

Also, although this will resolve (at a cost) the individual landlords problem, the tenant will still need housing, and his addiction problems will not be helped by being evicted from his home. The problem to society therefore will remain.

The Blackpool landlords suggest that landlords who are accredited should be permitted to have rent paid direct to them, if the tenants agree (and many probably would). The Local Authority say that they cannot do this as it is not permitted by the scheme rules. However the government might want to consider this option, if it wishes to encourage accreditation and thereby improve standards.

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Anonymous said...

Surely most sensible landlords with tenants on housing benefit will serve s21 notices at the start of the tenancy, or when the tenant goes on to housing benefit along with a "without prejudice note" stating the intention is only to start court proceedings if the tenant pockets his housing benefit. The landlord can then get possession in as little as 3 weeks

Tessa said...

Er no, not really. You cannot use section 21 until after the fixed term has ended (ie you can't use it half what through the term if the tenant stops paying).

Also in my experience it takes between six and ten weeks to obtain the order from the court (assuming nothing goes wrong). Then if the tenant fails to move out, it will take a further three to eight weeks to obtain a bailiffs appointment. Believe me, I have done it. Many times.

Getting possession in three weeks is a bit of a fantasy. Unless of course the tenant moves out voluntarily. But you cannot count on that.

Anonymous said...

You can issue a S. 21 in the fixed or periodic term actually..

Tessa said...

You can serve the s21 notice during the fixed term, but you cannot issue proceedings during the fixed term, which is what I meant. Sorry if that was unclear.