Cash strapped councils struggle to foot temporary accommodation costs
When homeless households go into temporary accommodation they receive housing benefits. Councils are often the ones funding this and the government have recently dropped the ball on reimbursing them.
The Local Government Association have today published new research that shows over the past five years frozen Local Housing Allowance rates – the benefits homeless households receive when they go into temporary accommodation – have left councils to pick up more than £700million.
Local authorities usually pay the cost of the housing benefit and claim it back from the Department for Work and Pensions, however the amount they can request back is capped at 90% of Local Housing Allowance rates back in 2011.
Since the cost-of-living began to bite these rates have struggled to keep pace with rising rental prices and the increased demand for temporary accommodation. As a result, the LGA is calling on the government to uprate temporary accommodation subsidy rates to 90% of current Local Housing Allowance rates.
What’s more, the group is also calling for the government to reconsider its decision to keep Local Housing Allowance rates frozen for other types of accommodation until at least April 2026.
Cllr Adam Hug, housing spokesperson for the LGA said: ‘We are in the midst of a housing crisis, with more people than ever seeking homelessness support from councils as there aren’t enough affordable homes available.
‘The pressure this puts on councils’ budgets is putting councils under enormous strain. Without serious intervention, more councils will be at risk of having to seek emergency government support.
‘Council housing budgets are being stretched to the limit and they must not keep being left to bridge the gap between rent and the amount we are able to recover via housing benefit subsidy.
‘We need urgent government action to address the temporary accommodation subsidy gap alongside the creation of a more effective housing and welfare system which reduces and ideally eliminates reliance on temporary accommodation in the long-term. This will not only improve outcomes for communities but also bring significant financial benefits to the public purse.’
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