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PM ditches plans to extend local housing allowance cap

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The amount of help social housing tenants get towards their rent will no longer be capped at the Local Housing Allowance rate as had previously been planned.

The prime minister announced today that plans to introduce the LHA cap for both social housing and supported housing in 2019 will be dropped.

At prime minister’s questions, Theresa May said the LHA cap will not be applied to supported housing, or to the wider social rented sector.

This comes as the Department for Communities & Local Government and Department for Work & Pensions announced the government’s future model to support and sustain supported housing will be published next Tuesday.

Today’s announcement was welcomed by Local Government Association chair Lord Porter (Con) who said: “It is great that the government has listened to our call for the Local Housing Allowance rate not to apply to social housing, including supported housing.

“This will provide some crucial certainty for councils and their partners to provide housing for some of the most vulnerable people in our society, and to invest in improving and building more affordable homes.

“We look forward to seeing more details of this encouraging step from the government next week.” 

Terrie Alafat, chief executive of the Chartered Institute of Housing, said: “This is great news. CIH has consistently called on the government to rethink its plans to cap housing benefit for people living in supported housing at Local Housing Allowance rates, because it would have put homes for some of the most vulnerable people in our society at risk.

“We have also pointed out that applying the cap to the wider social housing sector risked putting social housing out of reach for younger people in particular in many areas.”

Ms Alafat said she was waiting “with interest” to see the details of the government’s new funding proposals.

However, while the announcement on social housing has been widely welcomed, a recent study by Policy in Practice, commissioned by the LGA, found councils were likely to be left picking up the costs of the impact of the LHA cap on tenants in the private rented sector. The study found private renters were facing average real terms losses of £38.49 per week, with higher losses for larger families, by the end of the decade.

“Rising rents, without an increase in housing support, will lead more people to approach local government for help, driving up temporary accommodation and homelessness support costs,” the report said.

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