26 Deferred

We recommend that the Department for Work and Pensions unfreeze the subsidy rates by increasing...

Recommendation
We recommend that the Department for Work and Pensions unfreeze the subsidy rates by increasing the rate councils are reimbursed to match the current Local Housing Allowance rate. We also recommend that the Government conduct a detailed review of the subsidy rules to ensure they incentivise councils to source good-quality accommodation. (Recommendation, Paragraph 82)
Government Response Summary
The government stated that the Department for Work and Pensions is keeping Housing Benefit subsidy levels under review, with future decisions dependent on government missions and fiscal context, rather than committing to unfreezing rates to match LHA. They are also committed to considering sustainable funding and will engage with stakeholders through the Thematic Value for Money Review to identify appropriate ways forward for subsidy rules.
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