DCLG: Information for local authorities on exemptions from the requirements of the Welfare Reform and Work Act 2016 and related regulations: the Welfare Reform and Work Act 2016 introduces a new rent regime for registered providers of social housing in England. This requires local authorities to reduce social rents by 1% p.a. for four years from April 2016 and to comply with restrictions on levels of rents set out in Sch.2 to the Act and in the Social Housing Rents (Exceptions and Miscellaneous Provisions) Regulations 2016 (SI 2016/390). The Secretary of State has power to exempt a local authority fully or partially from their requirements if he considers that the local authority would be unable to avoid serious financial difficulties if it were to comply. This guidance explains the process for obtaining an exemption. There will be an expectation that a local authority should explore thoroughly what it can do to mitigate any financial risk without recourse to an exemption, including looking at all contractual commitments. (26 May 2016)