25 Deferred

The rules that determine the amount of money councils can claim through the Housing Benefit...

Conclusion
The rules that determine the amount of money councils can claim through the Housing Benefit subsidy system is restricting their ability to source good-quality temporary accommodation for households. The Department for Work and Pension’s ongoing freeze of the subsidy rates is putting an enormous financial strain on councils. The freeze in subsidy rates limits the range of affordable options available to councils and acts as a disincentive 65 for them to enter longer-term leases that could strengthen their ability to raise standards, due to the risk of being exposed to large costs on their general funds. Within a financially constrained environment, we are also concerned that the rates reimbursed for different types of accommodation create an incentive for councils to place households in accommodation with support they may not need. (Conclusion, Paragraph 81)
Government Response Summary
The government states the DWP is keeping Housing Benefit subsidy levels under review and commits to considering the best way to sustainably fund good-quality temporary accommodation, linking it to a thematic review on homelessness.
Government Response
Deferred
HM Government Deferred
The Department for Work and Pensions is keeping the levels of Housing Benefit subsidy for temporary accommodation under review, with any future decisions on the levels of Housing Benefit subsidy for temporary accommodation to be taken in the context of the Government’s missions (including the child poverty strategy), goals on housing and the fiscal context. We recognise that councils need a stable revenue stream to support innovative finance models, which allows them to lease good-quality properties or to unlock investment in new supply. However, as mentioned in the Child Poverty Strategy, the government is currently spending more on temporary accommodation support than ever before and the quality and standard of housing does not reflect this spending. This includes significant spend through Legacy Housing Benefit, with systems and funding approaches that have not been updated in years. There is an opportunity to improve the value for money that is being spent and improve the outcomes for vulnerable citizens. We are therefore committed to considering the best way to sustainably fund good-quality temporary accommodation and drive down the use of poor-quality temporary accommodation, including new investment products available through the National Housing Bank that may be able to support delivery. In addition, through the Thematic Value for Money Review on Homelessness, we will continue to engage with councils and sector partners to identify the most appropriate ways to balance certainty for councils, value for money, and support for vulnerable people.
Addressee Bodies
Ministry of Housing, Communities and Local Government
Timeline
Recommendation age 0.3 yrs
Report published 22 Apr 2026