"While households receive the full housing benefit they are entitled to, the amount councils can claim back from DWP is currently capped to 90 per cent of Local Housing Allowance (LHA) rates from back in 2011. This means councils are not able to claim back costs that reflect what they are spending, and it is increasingly getting worse as the demand for temporary accommodation (TA) rises and they can claim back less and less."
"it also found that the annual gap was set to grow by almost 50 per cent in the next five years, from nearly £270 million to almost £400 million per year, without decisive action. In 2023/24, the most recent year for which we have data, the total spend on housing benefit for councils in England on temporary accommodation was £1.05 billion, while the DWP only reimbursed £780 million to councils, leaving a £266 million gap."
Councils are paying substantially more in housing benefit for temporary accommodation than they are reimbursed by the DWP. Reimbursement is capped at 90 percent of Local Housing Allowance rates set in 2011 and does not reflect current rent levels or rising TA demand. The cumulative subsidy funding gap is projected to exceed £3 billion between 2017/18 and 2029/30, with the annual shortfall rising from nearly £270 million to almost £400 million within five years without action. In 2023/24 councils spent £1.05 billion on TA housing benefit but were reimbursed only £780 million, leaving a £266 million deficit. The LGA calls for uprating reimbursement to 90 percent of prevailing LHA rates.
Read at London Business News | Londonlovesbusiness.com
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