Source · Select Committees · Public Accounts Committee
Recommendation 23
23
Acknowledged
Local authorities face rising 'Temporary Accommodation Subsidy loss' from outdated LHA rates
Conclusion
LHA rates also impact the amount that local authorities can reclaim as a subsidy from DWP for temporary accommodation costs. The amount that can be reclaimed depends on a number of factors, including the January 2011 LHA rate appropriate to the size of the property. Given that the subsidy is based on an historic rate rather than being aligned with local authorities’ rising temporary accommodation costs, they experience a gap in funding, commonly known as ‘Temporary Accommodation Subsidy loss’. This is having a significant and increasing impact on their financial pressures. 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).32
Government Response Summary
The government states the recommendation is implemented and DWP wrote to the Committee on 21 February 2025, setting out its justification for the current Local Housing Allowance levels that lead to the temporary accommodation subsidy loss.
Government Response
Acknowledged
HM Government
Acknowledged
4.1 The government agrees with the Committee’s recommendation. Recommendation implemented 4.2 The Department for Work and Pensions wrote to Committee, on 21 February 2025, setting out its justification for the levels of Local Housing Allowance it has set, both for individuals and for local authorities with regard to the temporary accommodation subsidy.