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DWP must review the LHA freeze
The government does not have to continue with the Local Housing Allowance freeze in the face of evidence of harm, writes Martin Hilditch
When the government published its Rough Sleeping Strategy in August, it made a pledge that the Department for Work and Pensions (DWP) would work on its “support offer” for people who sleep rough.
At the moment, as a new report suggests this week, in too many cases the DWP’s current offer in the private sector does little more than support people into homelessness.
The report, by the Chartered Institute of Housing (CIH), takes a detailed look at the Local Housing Allowance (LHA) system, run by the DWP, and concludes that LHA rates have drifted “so seriously out of line with local rents that private renting has become unaffordable for most low-income tenants, and this substantially increases their risk of homelessness”.
Tenants are being left to make up often substantial differences out of their other benefits (that is, of course, the ‘lucky’ ones who are able to do so).
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For the more detailed analysis go and read the report, but the impact is clear.
As Matt Downie, director of policy and external affairs at Crisis puts it, the current state of play with LHA leaves “many homeless people stuck in a desperate situation” and puts others at risk of homelessness.
This leaves rough sleepers, sofa-surfers and those living in unsuitable hostels unable to find a home “because there isn’t enough social housing and housing benefits are too low to cover private rents”.
Let’s put it even more directly. LHA policy, in its current form, is both causing and sustaining homelessness (with all the social and financial knock-on costs you might expect as a result).
The Rough Sleeping Strategy effectively acknowledged this. It stated that one of the government’s “longer-term” aims is to “look at affordability in the private rented sector, with a view to developing policy options for post-2020 when the current Local Housing Allowance freeze ends”. A government evidence review will look at factors that might impact rough sleeping “from the housing market to the welfare system”.
The Social Housing Green Paper touched on this too, stating that the government had created Targeted Affordability Funding (TAF) to help low-income households in the PRS “in those areas where benefit rates have diverged furthest from local rents”.
This week’s CIH report concludes that this TAF typically covers 10-30% of the gap with rents and as the gulf between rents and LHA rates increase it is becoming “increasingly ineffective”.
Given all of this, it is perhaps disappointing how little focus the DWP’s policies receive in either the Rough Sleeping Strategy or the green paper.
Nonetheless, the strategy did mark a major step forward in admitting where some of the problems lie.
It failed, however, in stating that policy change in this area will not occur until post-2020. The government has acknowledged a problem exists. It doesn’t have to inevitably continue for several more years.
The freeze isn’t set in stone – it’s a decision. The evidence suggests it is time it was reviewed.
Martin Hilditch, managing editor, Inside Housing
