Dacorum Borough Council works closely with a local homeless charity to deliver a housing benefit service that encourages people to take ownership of their affairs. The charity, Dacorum Rent Aid, has opened a professional bank account that can be used by multiple clients. Housing benefit can be paid into this account and managed by clients to pay their rent.
Government policy advises that people receiving benefits should be responsible for managing their own financial affairs in the same way as others in society. One aim is to enable people to budget for, and to pay, their rent themselves. This includes paying housing benefit into a bank account from which the individual pays their rent.
Most people have their benefits paid directly into their bank account; however, there are many people who are unable to open a bank account. These people can receive their benefits by cheque and may have to rely on cheque-cashing agents. As agents usually charge for this service, this increases the financial pressure on the poorest members of the community.
To support those individuals who have difficulty in managing their finances, councils should have a safeguard policy. The Council can help the customer to open a bank account or, in certain circumstances, arrange for benefit to be paid directly to a landlord.
The safeguard policy involves other agencies and there is a bureaucratic inclusion process. Resulting delays can impact on a landlord's willingness to accept a tenant. This increases the risk of a homeless person not being able to get a tenancy.
To overcome these problems the benefit service at Dacorum Borough Council has worked with Dacorum Rent Aid. This is a registered charity that supports homeless adults to gain accommodation.
Dacorum Rent Aid has set up a community bank account with a major financial institution that can be used by its customers. Individuals can ask the Council to pay their housing benefit directly into this bank account. Customers are then able to manage their account and pay their rent themselves. The arrangement is free and is not a condition of getting a tenancy.
Customers manage their money within the community account using their name and a unique reference number. They can give approval for rent payments to be made to third parties such as their landlord. The customer can withdraw any balance held in the account on request and interest is paid on any balance they hold.
In providing vulnerable people with access to prompt payments of housing benefit, the scheme has:
- helped to remove the barriers to securing accommodation;
- allowed vulnerable users to achieve a more stable lifestyle by reducing the likelihood of eviction due to non-payment of rent;
- supported the government policy of enabling people to manage their own financial affairs.
The arrangement has reduced the burden on the Council's homelessness team by securing accommodation for people and reducing the likelihood of some becoming homeless in the future. It has also simplified the claims process for this group of clients meaning the team has more time to deal with claims from other groups.
By performing this service the Council has been able to develop a good relationship with a partner to support vulnerable homeless people. The service has also contributed to the wider agenda of homelessness and, as a result, has improved the Council's reputation.