Cash-limited local authorities face challenges covering temporary housing expenses
The Local Government Association (LGA) has called on the government to address a growing gap between housing benefit support and actual rent costs for temporary accommodation, which has strained council budgets across the UK. The association has highlighted that the freeze on Local Housing Allowance (LHA) rates has left councils to pay over £700million for housing benefits for homeless households in temporary accommodation over the past five years [1].
The LHA rates, which have not been updated since 2011, remain below the 30th percentile of local rents, causing many tenants relying on benefits to pay out-of-pocket top-ups or risk homelessness. This situation pushes more households further into poverty and increases demand for temporary accommodation, which councils must fund at higher actual rent levels [2][4].
The LGA believes that updating the LHA rates is necessary to address the housing crisis and ensure that councils are not burdened with excessive costs. The association is also advocating for the creation of a more effective housing and welfare system that reduces or eliminates the need for temporary accommodation in the long-term [3].
The LGA's call for action comes amidst a growing housing crisis and increased demand for temporary accommodation due to a lack of affordable homes. The association is urging the government to uprate temporary accommodation subsidy rates to 90% of current LHA rates and reconsider its decision to keep LHA rates frozen for other types of accommodation until at least April 2026 [2].
Without immediate government intervention, more councils may require emergency government support. Local authorities usually pay the cost of housing benefits for homeless households in temporary accommodation 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].
Political leaders, including Housing Secretary Angela Rayner, maintain the LHA freeze, arguing that increasing LHA would funnel more money to private landlords. However, critics, including the Joseph Rowntree Foundation and the Work and Pensions Committee, have called for unfreezing LHA to link it again to local market rents to reduce poverty and help councils manage temporary accommodation costs more sustainably [2][4].
In a separate news item, it was reported that Brits plan to give more this Christmas. The proposed action by the LGA aims to improve outcomes for communities and bring financial benefits to the public purse.
In Haringey, Low Traffic Neighbourhoods are set to remain in place, while the LGA continues its push for a more sustainable and equitable housing system.
- The Local Government Association (LGA) is advocating for the government to update the Local Housing Allowance (LHA) rates to alleviate the financial burden on local councils, as the current freeze leaves them paying over £700million for housing benefits in temporary accommodation over five years.
- In response to the growing housing crisis and increased demand for temporary accommodation, the LGA proposes uprating the temporary accommodation subsidy rates to 90% of current LHA rates, aiming to bring financial benefits to the public purse and create a more sustainable housing system.
