After LHA uprating, what next?

Last week CIH was delighted by the Autumn Statement announcement that Local Housing Allowance (LHA) rates will be uprated across Great Britain for the first time in three years; resetting the rate so that it will cover the cheapest 30 per cent of properties. This is something the housing and homelessness sector have long been calling for as an absolute necessity. Recent analysis by CIH and Shelter showed that LHA was failing to cover the cost of the cheapest 30 per cent of two-bedroom family homes in every local authority area in England, with similar research also published in Scotland. In the face of rising rents, ever increasing numbers of families living in temporary accommodation, and the lack of social housing, restoring the link to the 30th will make a big difference and is unequivocally a welcome and positive step.

However, there are limitations even in this good news story and it is clear we must not take our foot off the gas in terms of trying to influence policy change. Firstly, LHA increases will not come into force until April 2024. During which time rents will continue to rise, local authority budgets will continue to be stretched to breaking point by temporary accommodation costs, and households, including many with children, will continue to experience hardship and destitution at shockingly high levels. Then there is the fact that LHA rates will, as things stand, be frozen again from 2025-26 meaning this is merely a brief respite, and the fight to keep LHA in line with rents will need to begin again in earnest almost immediately. Also, the decision not to increase the benefit cap at a commensurate amount will mean for a significant number of households in need the LHA uprating will really be a moot point.

The day after the Autumn Statement I attended Centre for Homelessness Impact (CHI)’s Impact Forum London event, ‘What works to stem a rising tide of homelessness?’. It was full of insightful and powerful presentations. The uprating of LHA was referenced frequently throughout the day in positive and appreciative tones; however, everyone was clear that this measure alone will not be what ‘stems the rising tide of homelessness’. For example, we heard that in Hackney there are currently no properties available at the LHA rate in the entire borough and the closest temporary accommodation it can now offer people is Peterborough, nearly 100 miles away. There is the equivalent of nine primary schools worth of children living in temporary accommodation in Hackney alone. To put that into perspective, there are now teenagers who will have lived their entire childhoods in temporary accommodation, at huge economic and social cost to them and their families. It was abundantly clear that the LHA announcement for the uprating next April will not be what gets people through this winter, or the silver bullet to remedy ever increasing homelessness.

A system in crisis, a sector in crisis. What needs to happen now? Our housing and welfare system is broken, but it is not beyond repair. We must keep pushing this and the next government to commit to a long-term plan to address the housing crisis if we are to make a real difference to people in housing need.

Investment in social housing is the most cost-effective way to tackle homelessness and reduce housing benefit, providing a safety net for those who need it. Analysis by CHI and CIH shows that even a modest increase in output of social rented housing of 10,000 homes annually could largely be financed by direct savings in temporary accommodation costs and in housing benefit/universal credit. To ensure that homelessness is rare, brief and non-recurring the government should develop and resource a cross departmental strategy to end homelessness in all its forms, with a focus on prevention and this should include a mix of short- and long-term action.

We set out more detail on this in our strategy for housing - homes at the heart.