‘Trailblazing’ rent scheme approved by council chiefs
A ground-breaking pilot scheme to help people suffering a short-term housing crisis has been backed by County Council chiefs.
The rent-in-advance loan scheme has been set up to help those who need immediate support to secure a private tenancy.
The aim is to prevent homelessness for people who do not meet the statutory housing need criteria.
The council’s cabinet has approved a recommendation to allocate a total of £30,000 in loans for the initiative. The loans, accessed via a credit union, will help people pay a month’s rent in advance – which is often a major stumbling block to them finding a tenancy.
The loan is then repaid over time and the money recycled to help other people.
The decision, in November, followed a three-month inquiry by an inquiry group on behalf of the Finance, Performance and Resources Select Committee.
The group found that many are blocked from securing their own tenancy because, despite being able to pay the deposit, they can then not find the cash for the first month which is usually required in advance.
Inquiry chairman and councillor Steven Lambert, in a speech to cabinet, recommended that a pilot scheme be introduced with two local credit unions.
He explained: “This is designed to initially help around 60 people across the county with more people being able to access the funds as the loan is repaid and the money recycled.”
The scheme would help approved people who would not normally meet the eligibility criteria because they do not have the 13-week history the credit unions expect.
“By working with partners such as the credit unions we believe that the scheme really will close that gap and close the circle of despair that people can find themselves in,” Mr Lambert told the cabinet.
“We as an authority will be seen as a trailblazer and, as our recommendations set out, we can seek to address those with the highest level of complex needs and end that circle of despair, but with such a modest sum of money we could make a big difference,” he added.
Cabinet members agreed it was a worthy scheme but questioned whether it was appropriate to spend £30,000 during the current spending freeze.
However, Martin Phillips – the cabinet member for Community Engagement and Public Health – explained it was a loan which would be paid back.
“It’s not lost money,” he said. “In terms of social value, for basically very little investment we are getting a lot return and it seems quite a clever way of using our money in a time when interest rates are so low,” he said.
He added: “We fully support crisis support and in fact will allocate £50k to this and other crises that may occur in people’s lives. This will be an interest-free loan over 10 years.”
The cabinet agreed to go ahead with the pilot scheme in principle from the next financial year in 2016 but will revisit it at the time in case the situation changes.
Crisis loans, which were previously administered by the Department for Work and Pensions, and for which people could apply to cover the cost of rent-in-advance, ceased to exist when the council took on the administration of the local emergency support.
This was primarily due to the fact the council does not have the systems available to administer a loan scheme.
Mr Lambert added: “Through our evidence gathering sessions, we have sought to find a solution to fill the gap created by the removal of these loans so that people who need access to money to pay for their rent-in-advance can do so in a timely way.”