Preventing homelessness in a cost of living crisis

News and developments

How local authorities can use discretionary housing payments and the Household Support Fund to assist families at risk of homelessness. 

Published July 2022

Using financial assistance to prevent homelessness

Early financial assistance can be an important intervention to prevent households getting to a crisis point where they become homeless.

Local authorities have two main pots of discretionary funding to help people with their housing costs and other essentials. These are discretionary housing payments and the Household Support Fund. The Homelessness Prevention Grant can also be used to help people at risk of homelessness or to establish local schemes to prevent homelessness.

Effective use of these discretionary funds can improve local authorities’ ability to support those who are struggling.

Challenges when new funds are introduced

During both the pandemic and the cost of living crisis, additional discretionary funds were announced with short timescales for spending. This created a challenge for local authorities to quickly identify eligible local people in need of help and get support to them in the most effective way. It also created the additional administrative burden of rapidly establishing new systems and processes.

Discretionary housing payments

Discretionary housing payments (DHPs) provide additional help with housing costs for people who get housing benefit or the housing costs element of universal credit.

They are often awarded where someone has a rent shortfall, for example because of the benefit cap or the Local Housing Allowance Rate that applies to them.

DHPs are an important homelessness prevention tool. Early intervention to help a household struggling with housing costs can prevent a family’s situation worsening to the point where they face homelessness.

Use Shelter's Discretionary housing payments tool to find contact details for local authorities discretionary housing payments teams.

How local authorities can make the most of DHPs

Local authorities can make more effective use of DHPs by ensuring they are accessible to people most in need in their area.

Application forms for DHPs should be easily accessible and well signposted on the local authority website with clear links from the home page and housing and benefits sections.

Some people who need to apply for a DHP are likely to be vulnerable or digitally excluded. The application process should have an option for offline submissions. Local authorities should ensure there is support available for people who would struggle to apply on their own. This could include signposting to in-house or external benefits advice teams who can assist with DHP applications.

The DHP guidance manual states that local authorities should provide information about the process for reviewing the decision. This should be clearly set out at the point of application.

The Household Support Fund

The Household Support Fund allows local authorities to provide additional support with living costs for those most in need. Local authorities have discretion on how this funding can be used to help with essential living costs. This could include help with:

  • food

  • energy bills

  • household items

The Household Support Fund initially covered the period from 6 October 2021 to 31 March 2022. It has been extended to 31 March 2024.

Help with rent and arrears

In an emergency, the Household Support Fund can be used to help people with housing costs but only where existing schemes do not meet this need. Local authorities must first consider if DHPs or the Homelessness Prevention Grant can be used.

Guidance for local authorities confirms that in a genuine emergency, the fund can be used to pay off historic rent arrears that are excluded from the criteria for DHPs.

Using data to support those most in need

Local authorities can improve their ability to target funding and support to those who need it the most by analysing the data available to them. This can include different datasets within the local authority, for example on council tax.

There are restrictions on how information relating to social security can be shared. Local authorities can use information from the Department for Work and Pensions (DWP) for the purposes of benefit administration, including housing benefit and discretionary housing payments. For example, the DWP can provide information to local authorities about universal credit claimants affected by the benefit cap or bedroom tax. Local authorities can consider whether additional support is required, for example through a discretionary housing payment.

By using these data sources individually or combining them, local authorities can target individual support, including advice to maximise income and benefits entitlements or discretionary payments such as the Household Support Fund. Data can also be used to identify neighbourhoods where community assistance and outreach services are most required.

Examples of data sharing across different authority areas

There are a number of programmes that operate across local authorities to improve use of data.

Kent county and district councils’ LSI-Kent database shares data between upper and lower tier local authorities and combines with Universal Credit data to enable poverty prevention activities.

Policy in Practice Low Income Family Tracker used by around a third of London boroughs to draw together and map multiple data sources to identify struggling households.

Adur and Worthing councils’ Proactive project has used information on those claiming benefits administered by the councils to identify households in financial difficulties and offer support and advice.

Local authorities could consider working together to create similar schemes to help target support to those most in need.

Further resources

Shelter Legal

Where to get advice about benefits and grants – get help to check entitlement to benefits and grants, claim benefits, and challenge DWP decisions

Where to get debt and money advice – debt advice is available from an FCA-authorised adviser, local authority, or legal aid if the debt could result in the loss of a home

Gov.uk guidance for local authorities

Household support fund: guidance for local councils

Discretionary Housing Payments guidance manual

About the author

Charlie Berry is Policy Officer at Shelter. She works on homelessness, temporary accommodation and welfare.