To ask His Majesty’s Government what assessment they have made of the adequacy of the Housing Benefit subsidy for temporary accommodation; and whether they have plans to provide further support to local authorities in providing emergency and temporary accommodation.
I beg leave to ask the Question standing in my name on the Order Paper and declare my interest as a vice-president of the Local Government Association.
My Lords, the Government recognise the challenges that local authorities face in responding to the increased demand for temporary housing. Our priority is to support claimants and keep people in their homes. From April, we are investing £1.2 billion to increase the local housing allowance, benefiting 1.6 million claimants and helping to prevent homelessness. In England, our £1.2 billion investment in the local authority housing fund provides capital funding directly to councils to build new homes. Additionally, our £2 billion investment over three years tackles homelessness and rough sleeping.
I thank the noble Viscount for his Answer. What my Question was really getting at was whether there has been an assessment of the adequacy of what is being allocated. Is it enough and is it going to the right places? Stark evidence from the Local Government Association, London Councils and the District Councils’ Network would say that clearly it is not. A survey by the DCN, which was published just today, shows that housing benefit subsidy covers just 38% of district councils’ temporary accommodation costs. Can the Minister explain why the housing benefit subsidy for families and councils using temporary accommodation has been frozen since 2011, despite rising costs and dwindling supply? Does he agree that much has changed in that time, and it is time that the rate changed too?
The subject that the noble Baroness has raised is to do with temporary housing, and we appreciate that these remain difficult times and that local authorities are subject to many pressures. We will continue to review the situation with housing benefit subsidy rates, but perhaps I can help the noble Baroness by saying that, following the Autumn Statement back in 2023, the Government announced additional funding of £120 million to help councils address in particular the Ukraine situation and homelessness pressures looking ahead to 2024-25. Today, I am pleased to say that it has been announced that England’s share of the £120 million is £109 million, which is to be paid via the homelessness prevention grant top-up for the year 2024-25.
My Lords, the undersupply of social housing has meant that spending on temporary accommodation has increased by a staggering 62% over the last five years. Yesterday, Shelter and the National Housing Federation published new research by the CEBR on the economic impact of building social housing. It showed the massive economic and social benefits of building 90,000 new social rented homes and found that delivering social housing at this scale would save nearly £250 million a year on the benefits budget, result in £4.5 billion in housing benefit savings and save local authorities £245 million a year on homelessness services. What action can the Government take to urgently improve delivery of social housing and reverse this vicious cycle?
The noble Baroness is right that building more houses and finding more houses, including social housing but also in the private rented sector and for homeowners, is incredibly important. We remain committed to our target of delivering 300,000 homes a year in England. We also recognise that the planning system can be complex. The levelling up White Paper marked an important moment, making clear the scale of our ambition to address the inequalities for communities right across the country, which I think was the gist of the noble Baroness’s question.
My Lords, I also declare my interest as a vice-president of the Local Government Association. Research by the Local Government Association confirms that government could save £780 in housing benefit for every social home that is built. Will my noble friend the Minister explore the option of making the 100% retention of right-to-buy receipts permanent, so that local authorities have the fiscal powers necessary to build the next generation of social housing?
Indeed, and my noble friend has much experience in this field from her long experience in local government. I will certainly take that back: I cannot give any guarantees right now at the Dispatch Box.
My Lords, I thank the Minister for his commitment to trying to make headway on this issue. We are all aware of the terrible strains that local authorities are under because of temporary accommodation being necessary and, of course, we also know that the reason is that incomes are just not meeting housing needs. Have the Government assessed the recent proposal from the Joseph Rowntree Foundation and the Trussell Trust for what they call an essentials guarantee? This would guarantee that universal credit was enough to cover the essentials—rent—which would therefore reduce the number of households in temporary accommodation, creating a virtuous cycle that would reduce the budget strain on local councils.
Yes, I am very aware of the “essentials” argument that often comes up in this Chamber. I do not have any answer for the most reverend Primate except to say that we note the questions that are put on that point. I shall go a little further, because he started by mentioning housing pressures. The £1.2 billion local housing fund enables councils in England to obtain better-quality temporary accommodation for those owed a homelessness duty. That is our way of making sure that there is some progress on homes.
My Lords, unaccountably, I am not a vice-president of the Local Government Association—no one has asked me to become one, but who knows?
A number of issues come into play here, but, basically, councils are probably going to spend heading for £2 billion on temporary accommodation this year. They have to pay up front to procure the accommodation, and then they can get back some but not all of it—and increasingly not all of it—from central government. The reality is that they are paying the price for the fact that we do not have a functioning housing system, and the Government, despite being in power for quite a long time, have an ambition but, so far, seem not to have the will to solve that problem. I am guessing that the Minister and the DWP are going to DLUHC Ministers and saying, “What are you going to do to solve this problem?” What answer are they getting?
We have already taken some actions, and the noble Baroness will know that on 24 January this year the Government announced additional measures for local authorities in England worth £600 million. This includes £500 million of new funding for councils with responsibility for adult and children’s social care, distributed through the social care grant. Taking into account this new funding, local government in England will see an increase in core spending power of up to £4.5 billion next year.
My Lords, is the Minister aware that if you look at any high street in the country, you will see many empty flats above shops, particularly above national multiples? Is he aware that, in Norfolk, Freebridge housing association has done an absolutely sterling job in leasing such flats and then renting them out as temporary accommodation, and to permanent tenants as well? Can he tell the House what more can be done to make the most of this underused resource?
Absolutely. Although I do not have a particular answer to the noble Lord’s question, I have certainly been reading about some innovative programmes to reinvigorate properties and give them different uses, not only in high streets but in more central areas. This is just the sort of creative thinking that is required to produce more housing, which of course then leads to people moving out of poverty.
My Lords, I have relevant interests in this issue. Does the noble Lord agree that it is not just the excessive cost of temporary accommodation that we should be thinking about but the huge disruption to family life and children’s education when they have to move into temporary housing? At the heart of it is the huge loss of social housing; in my own council, there are 20,000 fewer houses for social rent than there were 20 years ago. The Government’s proposals will not address this huge issue. When are they going to up their game to provide the social housing that is desperately needed?