Homelessness Prevention Grant 2023 to 2025: Technical Note | Daily News Byte

Homelessness Prevention Grant 2023 to 2025: Technical Note

 | Daily News Byte

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Background

In July 2022 we launched a consultation on technical changes to the funding arrangements for the Homelessness Prevention Grant, which will apply for 2023-24 and 2024-25. Following consultation, we have decided to introduce an updated funding formula. See our full response to the consultation.

This document provides a technical description of how we calculated the allocation for the Homelessness Prevention Grant using this new formula.

Homelessness Prevention Grant Funding Formula: 2023-24 and 2024-25

We consider allocation in 4 stages:

  • The first phase considers an allocation of £200 million that reflects relevant homelessness pressures, while at the same time aiming to reflect the temporary housing pressures faced by local authorities.
  • The second phase considers an allocation of £110 million, reflecting relevant homelessness prevention and relief pressures.
  • The third phase considers transitional arrangements for changes in funding allocations
  • The fourth phase considers the allocation of additional funds to fund new burdens following the implementation of changes to the Domestic Abuse Act 2021.

For recently merged local authorities, the allocation is calculated as the sum of what would have been allocated to their constituent parts. See below for a list of local authority mergers.

1. £200 million

The first £200 million is allocated according to a formula which reflects relative homelessness pressures, whilst at the same time aiming to reflect the ongoing temporary housing pressures faced by local authorities.

We calculated relative homelessness pressure by adding the total number of prevention and relief cases to the number of prevention and relief cases achieved by securing private rented sector tenancies, with the following adjustments:

  • Accounting for different private sector rental costs in different sectors
  • To ensure a minimum allocation level of £40,000
  • To ensure that no authority receives allocation of less than 90% of its 3-year average historical expenditure share on temporary accommodation expenditure

The DLUHC Homelessness Statistics (H-CLIC) year to March 2022 was used to assess the level of homelessness prevention and relief cases.

ONS private rental market summary statistics for the year to March 2022 in England were used to assess private sector rental spending in different sectors.

DLUHC Local Authority Revenue Expenditure and Credit Data – Revenue Outturn Housing Services RO4 from the financial year 2019-20 to 2021-22 was used to assess the 3-year average historical cost on temporary housing costs.

Data is missing

Where homelessness data are not available, local authority-level estimates are calculated by dividing published regional statistics by a percentage of the 3-year average of historical temporary housing costs, or by a population-weighted area cost adjustment if historical temporary housing costs are not available. Available.

Data are then distributed using these shares and adjusted using a missing data multiplier of 0.75 to ensure that local authorities do not benefit from not providing data. Where income outturn data is missing for 1 or more of the 3 years, we take the average of the remaining years.

2. £110 million

first 80%

The first 80% of the £110 million funding increase is allocated to reflect related homelessness prevention and relief pressures. We obtain a relative estimate of pressure using the following components:

Again, we apply a London-wide average area cost adjustment for London boroughs because particularly strong transport links between them mean that it is common to employ workers from the London-wide labor market,

The relative pressure is calculated using the following formula:

The share of allocation for each local authority (i) is obtained as a proportion of the total pressure in each local authority:

Data is missing

Variable a

We do not have the total number of housing benefit claimants for the newly formed council. We estimate the total using the values ​​of the local authorities merged to form the council.

variable b

We do not have rent data for newly formed councils.

We estimate rents in these local authorities using the average of rents that have been merged to form the local authorities. Weighting for these areas is based on the total number of homelessness prevention and relief duties in 2021-22.

variable c

We do not have data on area cost adjustments for the Isles of Scilly. We use area expenditure adjustments for Cornwall as a proxy.

final 20%

The remaining 20% ​​of the £110 million fund is allocated on a single homelessness basis. This is calculated using the total number of single-adult households paying prevention or relief duty in 2021-22 and adjusted using an area expenditure adjustment. View the Homelessness Live Table data.

The share is calculated as the proportion of all single-adult households serving in each authority.

Data is missing

Where data are missing in the published tables, we first estimate the share of local authorities using the 80% share, but reduce this share by 25% to ensure that local authorities do not benefit (compared to 75% of local authorities). Result of missing data. We then rescale all shares to ensure that the total for all local authorities adds up to 100%.

3. Transition system

No authority will experience loss of cash in its allocation as compared to the previous year. The increase in funding over the previous year will be limited to 2% in 2023-24 and 5% in 2024-25.

To ensure that local authority allocations are within the transitional regime (+/- 2% in year 1, +/- 5% in year 2), we apply transitional adjustments. All indicator allocations are pre-transitional adjustments multiplied by the transitional scaling factor. This adjusts all allocations by the same amount, and firstly ensures that the allocation is within the transitional arrangements limits, and then that the total allocation equals £310 million.

If the transitional arrangement is within the boundary after applying the transitional scaling factor allocation (+/-2% in year 1, +/-5% in year 2), it is excluded from further calculations. If, however, they remain outside the transitional adjustment limits, all authorities outside the limits are again modified by the transitional scaling factor. This adjusts the remaining allocation to ensure it is within the limit and the overall funding amount is £310 million.

This process is repeated until all allocations are within the transitional arrangements and the total allocation is £310 million.

Once this process is completed and all allocations are within +/- 2% of their respective 2022-23 allocations for 2023-24 and +/-5% of their respective 2022-23 allocations for 2024/-25, we make further adjustments. are To ensure that no authority incurs cash loss as compared to the previous year. We calculate the amount of funds required so that all authorities showing declining indicative allocations maintain their allocations from the previous year. The calculated amount of funding for each year (£3 million in 2023/24 and £7.1 million in 2024/25) is added to the original £310 million.

4. Domestic abuse new burdens

The additional funding is included to meet the new burden following the expansion of the priority need for those who become homeless as a result of domestic abuse, which came into force in July 2021 following the landmark Domestic Abuse Act 2021.

We estimate the total cost of meeting the new burdens associated with this change to be £9.8 million in 2023-24 and £14.2 million in 2024-25. Additional funding is allocated using the same formula of £110 million to reflect the relative homelessness pressures outlined above. We use the same data points mentioned above.

Total Homelessness Prevention Grant Funding: 2023-24 and 2024-25

Overall, the £322.8 million Homelessness Prevention Grant for the 2023-24 financial year comprises the £313 million allocated through the first 3 phases of Homelessness Prevention Grant allocations outlined above and the £9.8 million allocated through the Domestic Abuse New Burden Fund. This represents an increase of £7 million in the 2022-23 allocation.

The £331.3 million Homelessness Prevention Grant for the 2024-25 financial year comprises £317.1 million allocated through the first 3 rounds of Homelessness Prevention Grant allocations outlined above and £14.2 million allocated through the new Domestic Abuse Burden Fund. This represents an increase of £15.5 million in the 2022-23 allocation.

Amalgamation of local authorities

New Somerset

  • Mendip
  • Sagemoor
  • Somerset West and Taunton
  • South Somerset

Cumberland

  • Allerdale
  • Carelli
  • Copeland

Westmoreland and Furness

  • Barrow-in-Furness
  • Eden
  • South Lakeland

North Yorkshire

  • Craven
  • Hambleton
  • Harrogate
  • Richmondshire
  • Rydell
  • Scarborough
  • Selby

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