15 Aug 2025
CIH Scotland response to Social Justice and Social Security Committee pre-budget scrutiny
Social security provides a vital source of income to support people in different ways as their circumstances change throughout life. Around two thirds of social housing tenants and just under a third of private renters receive help with their housing costs. This financial support is essential to maintaining tenancies and preventing homelessness.
While the fundamental decisions that underpin housing cost payments - the housing element of universal credit (UC), housing benefit (HB) and local housing allowance (LHA) - remain reserved to the UK Government, the Scottish Government does have the power to top up benefits for groups of recipients, such as those affected by the “bedroom tax”, or to make additional support available through Discretionary Housing Payments (DHPs).
Affordable housing is key to reducing child poverty. Joseph Rowntree Foundation poverty reports consistently point to housing costs as one of the key drivers of poverty and that the focus on affordable housing supply in Scotland has helped to slow the increase of poverty.
While Scottish Government mitigation of the “bedroom tax” for social housing tenants is welcome, we think that more can and should be done to support low income households in the private rented sector (PRS).
Our recent work on Rapid Rehousing Transition Plans (RRTPs) identified the need to make better use of the PRS to meet housing need as demand for social housing continues to significantly outstrip supply. 70 per cent of local authorities stated that they would need to make use of the PRS in order to meet RRTP goals, but also highlighted issues with access and security which were often underpinned by an affordability gap.
This report was published before the declaration of a national housing emergency and of course, the pressure has only increased for many local authorities who are now regularly in breach, or at risk of breaching, statutory homelessness duties. Homelessness and the use of temporary accommodation is at the highest levels since records began and the latest statistical publication shows over 10,000 children living in temporary accommodation.
Complimentary analysis of LHA levels across Scotland at the time estimated that only one in 12 private rented properties would be affordable to tenants receiving LHA in 2022/23.
Despite a clear shortfall between LHA and actual rents and local authorities stating a need to support better access to the PRS, the latest statistics show that LHA top ups account for less than three per cent of DHP spend, totalling £1.2 million in 2024/25.
Recommendations from our RRTP and LHA reports included:
- Abolish the shared accommodation rate by toping up LHA to the one bedroom rate.
- Top up LHA to the 30th percentile across all size categories to increase access to the PRS. At the time of publication (November 2023) it was estimated that this would cost the Scottish Government around £100 million. This amount is likely to change as and when UK Government policy in relation to LHA changes.
- In the longer term, the Scottish Government should develop more robust data collection and analysis to better understand changes in rents and affordability across the PRS and inform evidence based interventions.
As stated above, the UK Government has a significant influence on the Scottish Government’s ability to manage social security payments. In housing, this is most evident through decision making in relation to LHA which has been repeatedly frozen in recent years meaning that vast areas of the PRS are unaffordable to low-income households. This increases pressure on social and affordable housing, which is already undersupplied, and risks increasing homelessness.
The ideal course of action would be for the UK Government to reconsider its approach to social security and reverse some of the welfare reform measures introduced by the previous government. We believe that housing affordability should be a basic expectation for all citizens of the UK and as a UK wide organisation, we will continue to make the case for housing support that is reflective of actual housing costs.
However, the Scottish Government does have the power to take action if it so chooses. The easiest way to support low-income private renters with housing costs would be to make additional DHP funding available to support LHA top ups where needed.
For more information on the pre-budget scrutiny please visit parliament's website.
For more information on our response please contact Ashley Campbell, policy manager for CIH Scotland, ashley.campbell@cih.org.
