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 freezing Local Housing Allowance on other areas of public expenditure.

The causes of homelessness are multi-faceted and often complex; they interact dynamically making it very difficult to isolate the relative importance of individual factors. We work closely with other departments, including MHCLG, to ensure the impacts of Local Housing Allowance (LHA) on homelessness and local government, are considered.

This included consideration in last year’s Autumn Budget not to increase LHA rates for 2025/26. Rental data, the impacts of LHA rates, rate increases in April 2024, and the wider fiscal context were all considered. The April 2024 one-year LHA increase cost an additional £1.2bn in 2024/25 and approximately £7bn over 5 years.

At last year’s Budget, funding for Discretionary Housing Payments (DHPs) were maintained. These are available from local authorities and can be paid to those entitled to Housing Benefit or Universal Credit who face a shortfall in meeting their housing costs. The Autumn Budget also announced an increase in 2025/26 by £233 million compared to last year (FY2024-25) to grant funding for homelessness services. This increased spending will help prevent rises in the number of families in temporary accommodation and help prevent rough sleeping. This brings total spend to nearly £1 billion in 2025-26.

The government will also invest £2bn in social and affordable housing in 2026-27, to deliver up to 18,000 new homes. This will immediately allow housing associations and local councils to bring bids forward for new developments in every part of the country.

We continue to work across government, including on the development of MHCLG’s Long Term Housing and Homelessness and Rough-sleeping strategies to ensure that interactions and impacts between departments are considered. The Inter-Ministerial Group on Homelessness and Rough-sleeping, for example, brings together ministers from across Government to drive progress on the strategy development and get back on track to ending homelessness.

Any future decisions on LHA policy will be taken in the context of the Government’s missions, goals on housing, including as part of the strategies mentioned above, and considered for prioritisation within the challenging fiscal context.