Citation, commencement and interpretation

1.-(1) This Order may be cited as the Income-related Benefits (Subsidy to Authorities) Amendment Order 2016 and comes into force on 18th November 2016.

(2) Article 2(2) and Schedule 1 have effect for the purpose of determining subsidy payable for the relevant year beginning with 1st April 2015.

(3) Articles 2(3) and 3, and Schedules 2, 3 and 4 have effect for the purpose of determining subsidy payable for the relevant year beginning with 1st April 2016.

(4) Article 4 has effect from 1st April 2016.

(5) In this Order-

"the 1998 Order" means the Income-related Benefits (Subsidy to Authorities) Order 1998(4);

"relevant year" means the period of a year beginning on 1st April in any calendar year in respect of which a claim for subsidy is made.

The amount of an authority's subsidy

2.-(1) The 1998 Order is amended as follows.

(2) For Schedule 1 (sums to be used in the calculation of subsidy)(5) substitute the Schedule 1 set out in Schedule 1 to this Order.

(3) For Schedule 1A (additional amount of subsidy: activities to reduce fraud and error)(6) substitute the Schedule 1A set out in Schedule 2 to this Order.

Rent rebate deductions from an authority's subsidy

3.-(1) Schedule 4A to the 1998 Order (rent rebate limitation deductions (Housing Revenue Account Dwellings))(7) is amended as follows.

(2) In Part 2 (England), in paragraph 3 (amount of deduction), for sub-paragraph (3)(8) substitute-

"(3) The rebate proportion for 2016-17 is 0.752.".

(3) For Part 3 (weekly rent limits for purposes of Part 2: authorities in England)(9), substitute the Part 3 set out in Schedule 3 to this Order.

(4) For Part 5 (amounts for purposes of Part 4, paragraph 4: authorities in Wales)(10), substitute the Part 5 set out in Schedule 4 to this Order.

Amendments relating to the Housing (Wales) Act 2014

4.-(1) The 1998 Order is amended as follows.

(2) In article 17(1)(c) (subsidy in respect of non self-contained licensed accommodation etc. provided by an authority as temporary or short-term accommodation)(11)-

(a)in paragraph (i), after "Housing Act 1996" insert ", Part 2 of the Housing (Wales) Act 2014";

(b)in paragraph (ii)-

(i)for "or (in Scotland)" substitute, ", Part 2 of the Housing (Wales) Act 2014 or";

(ii)after "1987" insert ", as the case may be".

(3) In article 17A(1)(c) (subsidy in respect of self-contained licensed accommodation etc. provided by an authority as temporary or short-term accommodation)(12)-

(a)in paragraph (i), after "Housing Act 1996" insert ", Part 2 of the Housing (Wales) Act 2014";

(b)in paragraph (ii)-

(i)for "or (in Scotland)" substitute, ", Part 2 of the Housing (Wales) Act 2014 or";

(ii)after "1987" insert ", as the case may be".

(4) In article 17B(1)(c) (subsidy in respect of non self-contained licensed accommodation etc. made available by a registered housing association as temporary or short-term accommodation)(13)-

(a)in paragraph (i), after "Housing Act 1996" insert ", Part 2 of the Housing (Wales) Act 2014";

(b)in paragraph (ii)-

(i)for "or (in Scotland)" substitute, ", Part 2 of the Housing (Wales) Act 2014 or";

(ii)after "1987" insert ", as the case may be".

(5) In article 17C(1)(c) (subsidy in respect of self-contained licensed accommodation etc. made available by a registered housing association authority as temporary or short-term accommodation)(14)-

(a)in paragraph (i), after "Housing Act 1996" insert ", Part 2 of the Housing (Wales) Act 2014";

(b)in paragraph (ii)-

(i)for "or (in Scotland)" substitute, ", Part 2 of the Housing (Wales) Act 2014 or";

(ii)after "1987" insert ", as the case may be".

Article 2(2)

SCHEDULE 1Schedule to be substituted for Schedule 1 to the 1998 Order

Article 12(1)(b)

"SCHEDULE 1Sums to be used in the calculation of subsidy

Article 2(3)

SCHEDULE 2Schedule to be substituted for Schedule 1A to the 1998 Order

Article 12(1)(c)

"SCHEDULE 1AAdditional amount of subsidy: Activities to reduce fraud and error

Interpretation

1.  In this Schedule-

"participating authority" means an authority which notified the Secretary of State on or before 29th February 2016 that it is participating in the Fraud and Error Reduction Incentive Scheme in the administration of housing benefit described in the Housing Benefit Circular HB A17/2014(15) and extended as described in the Housing Benefit Circular HB A2/2016(16);

"performance", in relation to any participating authority and any period, means the amount by which payments of housing benefit by the authority are reduced in that period as a result of relevant activities;

"performance period" means the period of 3 months beginning with any of 1st April 2016, 1st July 2016, 1st October 2016 or 1st January 2017;

"relevant activities" means activities carried out by a participating authority in order to reduce fraud and error in payments of housing benefit.

Additional amount: relevant year beginning with 1st April 2016

2.-(1) This paragraph and paragraphs 3 and 4 have effect for the purpose of determining the additional amount of subsidy, if any, payable to a participating authority under article 12(1)(c) for the relevant year beginning with 1st April 2016.

(2) The additional amount is determined as follows-

Step 1

Calculate the percentage ("the out-performance percentage"), if any, by which the performance of the authority exceeds its baseline performance in the performance period beginning with 1st April 2016 (see paragraph 3 for the meaning of "baseline performance").

Step 2

Work out which band in column (1) of the following Table the authority falls into in accordance with paragraph 4.

Step 3

Look up the percentage ("the additional amount percentage") specified in column (2) of the following Table in the row applicable to the authority's band.

Step 4

Multiply the additional amount percentage by the administration subsidy for the authority.

Step 5

Repeat Steps 1 to 4 for each of the other three performance periods.

Step 6

Add the amounts determined for each performance period under Step 4.

(3) In this paragraph, "administration subsidy" in relation to an authority, means the amount specified in relation to that authority in-

(a)the Annex to HB Subsidy Circular S9/2015 for authorities in England(17)

(b)the Annex to HB Subsidy Circular S10/2015 for authorities in Scotland(18);

(c)the Annex to HB Subsidy Circular S11/2015 for authorities in Wales(19).

Baseline performance

3.-(1) For the purposes of paragraph 2, a reference to the "baseline performance" of a participating authority in a performance period is to the amount determined in accordance with sub-paragraphs (2) to (5).

(2) For the performance period beginning with 1st April 2016 the baseline performance is the higher of the following amounts-

(a)the amount by which, in the Secretary of State's opinion, the total payments of housing benefit made by the authority in the period of 3 months beginning with 1st April 2014 were reduced as a result of relevant activities; and

(b)the average of-

(i)the amount specified in paragraph (a); and

(ii)the amount by which, in the Secretary of State's opinion, the total payments of housing benefit made by the authority in the period of 3 months beginning with 1st April 2013 were reduced as a result of relevant activities.

(3) For the performance period beginning with 1st July 2016 the baseline performance is the higher of the following amounts-

(a)the amount by which, in the Secretary of State's opinion, the total payments of housing benefit made by the authority in the period of 3 months beginning with 1st July 2014 were reduced as a result of relevant activities; and

(b)the average of-

(i)the amount specified in paragraph (a); and

(ii)the amount by which, in the Secretary of State's opinion, the total payments of housing benefit made by the authority in the period of 3 months beginning with 1st July 2013 were reduced as a result of relevant activities.

(4) For the performance period beginning with 1st October 2016 the baseline performance is the higher of the following amounts-

(a)the amount by which, in the Secretary of State's opinion, the total payments of housing benefit made by the authority in the period of 3 months beginning with 1st October 2013 were reduced as a result of relevant activities; and

(b)the average of-

(i)the amount specified in paragraph (a); and

(ii)the amount by which, in the Secretary of State's opinion, the total payments of housing benefit made by the authority in the period of 3 months beginning with 1st October 2012 were reduced as a result of relevant activities.

(5) For the performance period beginning with 1st January 2017 the baseline performance is the higher of the following amounts-

(a)the amount by which, in the Secretary of State's opinion, the total payments of housing benefit made by the authority in the period of 3 months beginning with 1st January 2014 were reduced as a result of relevant activities; and

(b)the average of-

(i)the amount specified in paragraph (a); and

(ii)the amount by which, in the Secretary of State's opinion, the total payments of housing benefit made by the authority in the period of 3 months beginning with 1st January 2013 were reduced as a result of relevant activities.

Determination of out-performance percentages

4.-(1) A participating authority falls into the band set out in column (2) of the relevant Table in the row applicable to the authority's out-performance percentage.

(2) The "relevant Table" in relation to a participating authority means whichever of Tables 1 to 6 in sub-paragraphs (6) to (11) the Secretary of State determines applies to the authority in the relevant year.

(3) The determination in sub-paragraph (2) is based on the caseload management information percentage relating to the authority for the relevant year beginning with 1st April 2014 (20).

(4) For the purpose of sub-paragraph (3), "caseload management information percentage" is calculated in accordance with the following formula-

(5) The Secretary of State's opinion in sub-paragraph (4) is based on-

(a)the size of the authority's individual housing benefit caseload;

(b)the types of housing benefit claimants in that caseload; and

(c)the value of the housing benefit reductions that tend to occur in that caseload in the normal course of events, given the rent levels found in the authority's area and other relevant factors.

(6) Table 1 is as follows-

(7) Table 2 is as follows-

(8) Table 3 is as follows-

(9) Table 4 is as follows-

(10) Table 5 is as follows-

(11) Table 6 is as follows-

Article 3(3)

SCHEDULE 3Part to be substituted for Part 2 of Schedule 4A to the 1998 Order

"PART 3WEEKLY RENT LIMITS FOR THE PURPOSES OF PART 2: AUTHORITIES IN ENGLAND

Article 3(4)

SCHEDULE 4Part to be substituted for Part 5 of Schedule 4A to the 1998 Order

"PART 5AMOUNTS FOR THE PURPOSES OF PART 4, PARAGRAPH 4: AUTHORITIES IN WALES

EXPLANATORY NOTE

(This note is not part of the Order)

This Order amends the Income-related Benefits (Subsidy to Authorities) Order 1998 (S.I. 1998/562) ("the 1998 Order") which provides for the calculation and payment of housing benefit subsidy to local authorities in England, Wales and Scotland which administer housing benefit. Section 140F(2) of the Social Security Administration Act 1992 (c.5) authorises the making, revocation or varying of an Order before, during or after the year to which it relates.

Article 2(2) substitutes Schedule 1 to the 1998 Order with a new Schedule 1 prescribing the sums to be used in the calculation of subsidy for the year beginning 1st April 2015.

Article 2(3) and Schedule 2 have effect for the purposes of determining additional amounts of subsidy payable for the year beginning with 1st April 2016. In particular, it prescribes a system for the making of additional payments of subsidy to be made in certain circumstances to local authorities who participate in the Fraud and Error Reduction Incentive Scheme ("the FERIS Scheme"), as notified by the Secretary of State to local authorities originally in November 2014 and again in February 2016.

In that scheme, participating authorities are given funding to carry out activities with a view to reducing fraud and error in relation to the payment of housing benefit. The Secretary of State then sets a threshold for expected performance in reducing fraud and error in a specified period for each such authority based on the authority's performance in making such reductions in a previous equivalent period. Additional payments are then made to the authority, the amounts depending on the extent to which the authority exceeds the threshold for reducing housing benefit payments in each such period by virtue of those activities. The substituted Schedule 1A to the 1998 Order, which is inserted by article 2(3), sets out how the additional payments of subsidy in respect of the FERIS Scheme are to be calculated for that year. Authorities are placed in groups based on their caseload management information percentage for the relevant year beginning with 1st April 2014 and different amounts of the additional subsidy payments relate to each of those groups.

Hard copies of the circulars setting out the scheme and the amounts of the administration subsidy on which payments are based are available from the Department for Work and Pensions, Caxton House, Tothill Street, London SW1H 9NA.

Article 3 has effect for the purposes of determining subsidy payable for the year beginning with 1st April 2016. Article 3(2) amends paragraph 3 of Schedule 4A to provide that the rebate proportion figure for 2016/2017 is 0.752. Article 3(3) substitutes Part 3 of Schedule 4A to the 1998 Order in respect of weekly rent limits for authorities in England. With respect to authorities in Wales, article 3(4) substitutes Part 5 of Schedule 4A to the 1998 Order which sets out the specified amount "O" and the guideline rent increase "P" used when calculating deductions from subsidy under paragraph 4 in Part 4 of that Schedule.

Article 4 amends the provisions in the 1998 Order relating to subsidy in respect of certain temporary accommodation so as to deal with the fact that Part 2 of the Housing (Wales) Act 2014 (anaw 7) now covers homelessness responsibilities in Wales.

An impact assessment has not been produced for this instrument as it has no impact on business or civil society organisations.