Select committee: Public Accounts Committee
Conclusion 4
4th Report - Tackling homelessness
Published 24 Jan 2025
Addressed to HM Treasury
Public Accounts Committee Tackling homelessness All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
We are not convinced that, in setting Local Housing Allowance (LHA) rates, the Department for Work & Pensions (DWP) has given due consideration to the impact on homelessness. Reforms to welfare benefits since 2011, including periodically capping and freezing LHA rates, have reduced the income households can derive from benefits in real terms. Some 45% of households now face a shortfall between the LHA they receive and the rent they pay. DWP states that it makes decisions about LHA rates in the context of other benefits and has decided to freeze LHA rates for 2025–26 at the 2024–25 level. We are concerned at the subjectivity of DWP’s judgements and that it cannot say what impact raising LHA rates would have on homelessness. Separately, local authorities pay for temporary accommodation and reclaim the costs from DWP. Given that funding is essentially based on the 2011 LHA rate, it has not kept up with local authorities’ rising temporary accommodation costs. In 2022–23, local authorities in England experienced a subsidy loss of £204.5 million, compared with £41.4 million in 2012–13 (both expressed in 2022–23 prices). DWP explains that the subsidy has never covered local authorities’ full costs, and MHCLG argues that it makes up some of the subsidy loss through its local government funding settlement, but it is unclear how an appropriate amount is decided upon. recommendation Alongside the Treasury Minute response, DWP should write to the Committee setting out, in detail, its justification for the levels of LHA it has set, both for individuals and for local authorities with regard to the temporary accommodation subsidy.
From: Public Accounts Committee, 4th Report - Tackling homelessness (HC 352), 24 January 2025
Government response
Latest Treasury Minutes progress report to the Committee of Public Accounts on the Fourth Report of Session 2024-26
The government responded to the whole report on 4 June 2026.
Treasury minutes: Government response to the Committee of Public Accounts on the Fourth report from Session 2024-25
Published 6 May 2025.
Summary written by Accountability Index from the government's response. It is not the government's own words.The government states that it agrees with the Committee's recommendations on tackling homelessness, giving target implementation dates ranging from April 2025 to Summer 2026 and noting that some are already implemented.
- On temporary accommodation, the government agrees with the recommendation and reports it as implemented: the Emergency Accommodation Reduction Pilots, backed by £5 million (later £8 million in total), work with 20 local authorities with the highest use of B&B accommodation.
- On consolidating funding, MHCLG will merge its main rough sleeping and single homelessness grants into a single grant for 2025-26, and will "explore options" for aligning Homelessness Prevention Grant funding with rough sleeping funding. It will "consider whether and how" to consolidate homelessness grants into the Local Government Finance Settlement.
- On local connection tests, regulations in force since 18 December 2024 exempt all former regular armed forces members. MHCLG will bring forward changes for domestic abuse victims and care leavers under 25 "in due course".
- On supported housing, the government agrees, with a target date of Summer 2026. A 12-week consultation published on 20 February 2025 covers a licensing regime and National Supported Housing Standards, with a response to follow "as soon as possible".