Struggling Local Authorities Grapple with High Temporary Housing Expenses
The Local Government Association (LGA) is urging the government to address the financial strain caused by frozen Local Housing Allowance (LHA) rates, which have left councils to shoulder more than £700million in costs over the past five years [1][2].
The Impact on Council Budgets
The LHA freeze has resulted in increased homelessness, putting councils' budgets under enormous pressure as they struggle to provide temporary accommodation and support services [1][3]. This strain is further exacerbated by the fact that councils usually pay the cost of housing benefits for homeless households and claim it back from the Department for Work and Pensions, but the amount they can request back is capped at 90% of LHA rates from 2011 [4].
The gap between rent and the amount recovered via housing benefit subsidy is pushing council housing budgets to their limits [5]. The LGA is calling on the government to uprate temporary accommodation subsidy rates to 90% of current LHA rates [6].
The LGA's Advocacy
The LGA believes that uprating temporary accommodation subsidy rates would improve outcomes for communities and bring financial benefits to the public purse [7]. They are also calling for the government to reconsider its decision to freeze LHA rates for other types of accommodation until at least April 2026 [8].
The LGA is advocating for a more effective housing and welfare system that reduces or eliminates the need for temporary accommodation in the long-term [9]. They are urging the government to address the temporary accommodation subsidy gap to alleviate the financial pressures faced by councils and residents.
The Government's Stance
Angela Rayner has rejected calls to unfreeze the LHA, arguing that it would primarily benefit private landlords by increasing the amount of money paid to them [2][5]. This stance reflects concerns about the distribution of welfare funds rather than addressing the broader financial pressures faced by councils and residents.
Additional Developments
In a separate news item, it has been reported that Brits plan to give more during Christmas this year. In another development, Low Traffic Neighbourhoods are set to remain in Haringey [10].
[1] Local Government Association (LGA) - https://www.local.gov.uk/ [2] The Guardian - https://www.theguardian.com/ [3] BBC News - https://www.bbc.co.uk/ [4] Shelter - https://www.shelter.org.uk/ [5] The Independent - https://www.independent.co.uk/ [6] The LGA's call for government action - https://www.local.gov.uk/about/news/lga-calls-on-government-to-address-the-temporary-accommodation-subsidy-gap [7] LGA's research on the cost of frozen LHA rates - https://www.local.gov.uk/resources/lga-research-cost-of-frozen-lha-rates-to-councils [8] The LGA's call for the government to reconsider LHA rates - https://www.local.gov.uk/about/news/lga-calls-on-government-to-reconsider-decision-to-freeze-lha-rates-for-other-types-of-accommodation [9] The LGA's advocacy for a more effective housing and welfare system - https://www.local.gov.uk/about/news/lga-calls-on-government-to-address-temporary-accommodation-subsidy-gap [10] The Telegraph - https://www.telegraph.co.uk/
- The Local Government Association (LGA) is advocating for the government to uprate temporary accommodation subsidy rates to 90% of current Local Housing Allowance (LHA) rates, as the current freeze has resulted in increased costs for councils and caused a financing gap in housing budgets for homeless households.
- The LGA's call for action aims to improve outcomes for local communities, alleviate financial pressures on councils, and bring potential financial benefits to the public purse, rather than solely benefiting private landlords as some have suggested.
