Two of capital's biggest providers could pull out if housing benefit is paid to tenants
Two of London's biggest providers of temporary accommodation have threatened to pull out of the business if the government goes ahead with plans to pay housing benefit to temporary tenants rather than their landlords.

Genesis Housing Group and Notting Hill Housing Group provide 5500 and 3200 units of temporary accommodation in the capital respectively.

They said they would be forced to "seriously consider" their positions if the government extended its pilot project of paying housing benefit to tenants.

Genesis chief executive Anu Vedi said: "We have a commitment to temporary accommodation but if temporary tenants were to receive significant sums directly, it could have an impact on our business. We would have to reconsider our future in the sector.

"Unless a council was prepared to underwrite our costs, we'd have to seriously consider whether or not we could continue to provide temporary accommodation."

A spokesman for the Department for Work and Pensions, which is testing direct payment at the moment, said it had commissioned a research firm to "review benefit arrangements for people in temporary accommodation".

He declined to comment on whether, when the research is published next month, the DWP would extend its pilot to temporary accommodation.

A spokesman for Notting Hill Housing Group said: "We would have to consider our position once the government decides what to do in the wake of the research."

The group's director of temporary housing, Madeleine Jeffery, said: "Temporary housing is a risky business. Increasing these risks means costs will increase as we work to mitigate against potential losses arising from customers delaying or not paying housing benefit directly into their rent accounts. With rents far higher than for permanent homes the financial exposure is substantially increased."

There are 93,000 households in temporary accommodation in the UK and 60,000 of these are in London.Westminster council has 3000 households in temporary accommodation and has budgeted to spend £14.7m in housing benefit – which it will claim back from the DWP – in 2003/4.

Steve Moore, the council's assistant chief housing officer, said that for his council to underwrite the costs of RSLs would be "disastrous" and a "massive financial undertaking". He said: "The amount we'll need will go 'kapow' if the DWP gets its way.

"The proposals are a recipe to push families we have just removed from B&B accommodation straight back into it."

Source

Housing Today