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Government drops LHA cap for Social Housing

The UK government is to drop its proposals to impose the Local Housing Allowance cap on social housing. The announcement was made by Theresa May during Prime Minister's Question time.

Responding to a question on supported housing, conveniently placed by the Conservative MP for Torbay, she said:

"I can confirm that we will be publishing our response to that consultation on Tuesday 31 October, it will look at a wide range of issues, it will need to make sure the funding model is right...we need to look at issues such as the significant increase in service charges...but I can also say today that as part of our response to the review we will not apply the local housing allowance cap to supported housing. Indeed, we will not be implementing it in the wider social rented sector and the full details will be made available when we publish our response to the consultation."

The proposals to limit the amount of Housing Benefit and Universal Credit Housing costs to the LHA cap and to impose a shared accommodation rate for single people under the age of 35 was announced by the then Chancellor George Osborne in 2015. The announcement met with severe criticism from a number of quarters including the SFHA and HSEU, worried about the potential harm the policy would wreak on supported housing. As a result of these protests the introduction of the cap was put back a year and the House of Commons Communities and Local Government Select Committee and the Work and Pensions Select Committee set up a joint Inquiry into the funding for supported housing to which the SFHA was invited to give evidence. The Government had promised to publish a consultative Green Paper in the Spring of 2017, but this was overtaken by the snap General Election in May. The consultation on supported housing – now to be a White Paper – is due to be published at the end of the month.

Commenting  on the announcement SFHA Policy Advisor Jeremy Hewer said:

“The announcement appears on the face of it to be very welcome and thanks to the help of members who provided data and case studies on the potential impact of the LHA cap, the SFHA has been able to make a strong case in collaboration with other organisations – Homeless Action Scotland, Scottish Women’s Aid and the HSEU – for the government’s proposals to be set aside. We are yet to see the details of the Government’s consultation on supported housing, so there may yet be concerns to which we will need to respond, in particular into Universal Credit’s interaction with Supported Housing.”

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