‘Days, weeks or months’ for definitive decision on future LHA rates

DWP minister non-committal on the extent to which post freeze rates will rise following Supreme Court housing benefit ruling.


A DWP minister batted off the future for Local Housing Allowance (LHA) rates beyond April next year, saying “days, weeks or months” would decide on whether rates rose to at least the 30th percentile of local rents or would just be allowed to rise from the level that they are now.

But the Commons did hear Will Quince – accused of presiding over a system that forces households to put themselves at risk of debt and eviction – speak of the government’s pride at “progress” made on welfare reform.

During the debate, Quince was confronted with damning evidence from a single constituency as to why that ‘pride’ might be misplaced.

Labour’s Lilian Greenwood, MP for Nottingham South, referenced the Samuels v Birmingham City Council Supreme Court ruling to highlight the impact of the growing gap between actual rents and the amount of rent covered by local housing allowance, following the government’s decision to freeze LHA rates from April 2016.

Last week, Quince was pressed in the Commons over the government’s response to the ruling anti-poverty campaigners see as showing it’s unlawful to expect families to rely on funds for basic living expenses when housing benefit can’t.

Then, Quince told Shadow Work and Pensions Minister Marsha De Cordova that the DWP would “consider the implications”.

Yesterday (17th July), Quince was equally non-committal when pressed by Greenwood as to whether LHA rates would be restored to at least the 30th percentile of local rents, or whether just be allowed to rise from the level their LHA freeze ends in April next year.

“That is a decision for the Secretary of State, and I will be working closely with her on that in the coming days, weeks and months”, he said.

Greenwood told the House she secured the debate prompted by research undertaken by Advice Nottingham, into the availability and affordability of private rented accommodation in the city – specifically property within the local housing allowance rate.

Advice Nottingham, the House heard, is a consortium of six advice agencies based in Nottingham and providing free, confidential and impartial advice on a range of issues, including benefit, debt, employment and housing.

Greenwood said the government’s outdated LHA rates from 2016 show rents in Nottingham to be as low as £42.54 per week, when Advice Nottingham found the cheapest property was now at least £63 per week.

Resultant research over a single week in November last year found only 12 properties at or below the rate for shared accommodation, and many of those were specifically marketed as student properties.

Overall, Advice Nottingham found just five one-bedroom flats in the city at or below the LHA rate.

Family homes proved even harder to find: there were only two two-bedroom properties at or below LHA rate; three three-bedroom properties; and one four-bedroom house, in the whole of the city, at a rent covered by LHA.

The House heard that more recent work by Nottingham City Council confirmed Advice Nottingham’s findings.

The LHA rate is intended to reflect the bottom 30th percentile of local rents, but it found that it actually covered less than 7% of one-bedroom flats, less than 3% of two-bedroom properties and less than 5% of three-bedroom homes.

With a shortage of council or housing association properties available, many families were forced to rent properties that they could not afford – and only by forgoing other essential household expenditure, including food, heating and clothing.

“The problem is that the gap they are seeking to fill between the LHA they receive and the rent they need to pay is not trivial but significant,” said Greenwood.

She cited Shelter stats showing the gap between 30th percentile rents and the LHA rate in Nottingham is £15.17 a month for a room in a shared house; £55.01 for a one-bedroom flat; £54.57 for a two-bedroom property; £56.61 for a three-bedroom property; and £121.93 per month for a four-bedroom house.

“These are not trivial amounts. Trying to cover the shortfall is leaving people in a very vulnerable and insecure position – and in poverty,” Greenwood said.

The House heard that in Nottingham, the targeted affordability funding meant that the LHA rate for three and four-bedroom houses has increased by 3% in the last year, with the monthly shortfall for an LHA claimant renting a three-bedroom house at the 30th percentile now £56.61 rather than £60.22; and for a four-bedroom house it is £121.59 rather than £126.14.

Greenwood acknowledged improvement but questioned whether Quince really thought that was sufficient.

Since 1980 Nottingham has lost 22,010 social homes through Right to Buy, and although Nottingham City Council, Nottingham City Homes and other local housing associations have built new homes, there were, said Greenwood, nowhere near enough to make up for those lost.

The problem, she said, had accelerated since discounts were increased in 2012.

In the last year there were 664 applications to Nottingham City Council for Right to Buy, whereas 134 homes were bought in 2012-13.

That, the House heard, exposed a huge gap between demand and supply of social housing in the city – Nottingham City Homes made 1,431 new lets in the last year, but the housing register stood at 8,393.

Responding, Quince ran through interpretations of the difference made by government action – pledging to look at the issues raised by Greenwood in more detail.

“As a government, we are proud of the progress we have made on our welfare reforms,” he said.