Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 17
17
Deferred
Outline transparent funding allocation process for local authorities, moving away from competitive bidding.
Conclusion
The Ministry must outline how it plans to allocate funding to local authorities in future investment programmes and move away from competitive bidding between councils. Any allocation must use a transparent process, based on clear criteria, and be focused on achieving desired outcomes. (Recommendation, Paragraph 66)
Government Response Summary
The government described current funding allocations for the Household Support Fund, Discretionary Housing Payments, and the Local Authority Housing Fund, along with future considerations for Local Housing Allowance rates, without outlining a general transparent and outcomes-based process for future investment programmes to replace competitive bidding.
Government Response
Deferred
HM Government
Deferred
57. As the Government set out in our response to the Committee’s Report on Children’s Temporary Accommodation, when considering Local Housing Allowance (LHA) rates for 2025–26, the Government considered a range of factors, such as the rental market impact of LHA, including the impact on cross-government issues such as homelessness; and LHA rates increases in 2024. In the challenging fiscal context, at autumn Budget 2024 the Government prioritised investing £1 billion in funding for both the Household Support Fund (HSF) and Discretionary Housing Payments (DHPs) (including Barnett impacts) for 2025–26, maintaining DHP funding at the same levels in England and Wales. This allows councils to provide discretionary support to those most in need. 58. The Government recognises that greater certainty helps local authorities to design and deliver sustainable plans for local welfare. Through the Spending Review, we have announced £842 million per annum (£1 billion including Barnett consequential) to reform crisis support. From 1 April 2026, the Government are introducing a new Crisis and Resilience Fund, incorporating Discretionary Housing Payments and funding to ensure the poorest children do not go hungry outside of term time. This is the first ever multi-year settlement for locally delivered crisis support. This longer-term funding approach aims to enable local authorities to provide preventative support to communities – working with the voluntary and community sector – as well as assisting people when faced with a financial crisis, to support the Government’s ambition to end mass dependence on emergency food parcels. 59. The Department for Work and Pensions (DWP) continues to work closely with MHCLG to make sure that links between housing and benefit policy are considered. Any future decisions on LHA will be taken in the context of the Government’s missions; goals on housing; and which measures can best meet Government ambitions within the challenging fiscal context. 60. The Spending Review announced £950m of capital for the fourth round of the Local Authority Housing Fund - the largest round of the fund to date, which will run until 2030 - to support local authorities in England increase the supply of better-quality temporary accommodation and drive down the use of Bed and Breakfasts for families with children. The fund will also provide safe and suitable housing for those on the Afghan Resettlement Programme and will provide local authorities with a lasting affordable housing asset for the future.