Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what assessment she has made of the potential impact of not uprating the Local Housing Allowance on (a) poverty and (b) homelessness; and whether she plans to increase rates in line with rental costs.

No assessment has been made using current economic assumptions and methodological practices.

However, the department has previously produced a poverty impact assessment using OBR economic assumptions from 30th October 2024 on an outdated version of the model. Using this methodology, the department has estimated the poverty impact of uprating the Local Housing Allowance (LHA) to the 30th percentile of rents in a Local Authority compared to freezing it. Uprating the LHA has been estimated to decrease the number of individuals in relative poverty after housing costs by 50,000 (0.1%) individuals in 25/26 and 100,000 (0.1%) individuals in 28/29 compared to freezing it.

Estimates have been rounded to the nearest 50,000 and are on a UK basis. The poverty impacts are independent of the underlying trends in poverty so they are not an estimate of the total change in poverty over time.

Since this version of the model, the move to UC acceleration announced at Autumn Budget has been incorporated into the model and the economic assumptions have been updated to OBR's Spring Statement 2025 Round 2 assumptions.

The causes of homelessness are multi-faceted and often complex, they interact dynamically making it difficult to isolate the relative importance of individual factors. Therefore, no assessment has been made on this basis for the impact on homelessness.

At last year’s Autumn Budget, the Secretary of State’s decision to maintain Local Housing Allowance (LHA) at current levels for 2025/26 was taken after a range of factors were considered, including rental data, the impacts of LHA rates, the fact that rates were increased in April 2024, and the wider fiscal context. The April 2024 one-year LHA increase cost an additional £1.2bn in 2024/25, and approximately £7bn over 5 years.

Any future decisions on LHA policy will be taken in the context of the Government’s missions, goals on housing, and the fiscal context.

For those who need further support, Discretionary Housing Payments (DHPs) are available from local authorities. DHPs can be paid to those entitled to Housing Benefit or Universal Credit who face a shortfall in meeting their housing costs.