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Councils and charities have welcomed the chancellor’s resolution to lift the cap on housing advantages within the Autumn Assertion however mentioned this alone can be inadequate to deal with a nationwide resurgence of homelessness and relieve stress on native authority funds.
Jeremy Hunt introduced on Wednesday that he would elevate the cap on the native housing allowance, which is supplied to folks on low incomes, to replicate big will increase in the price of renting privately.
By elevating the allowance to cowl the most cost effective 30 per cent of properties in the marketplace, the federal government can be giving 1.6mn households a median of £800 of additional assist a 12 months, he mentioned.
He added that “as a result of lease can represent greater than half the residing prices of personal renters on the bottom incomes”, unfreezing the native housing allowance was an “pressing precedence”.
Current analysis by homelessness charity Disaster and actual property web site Zoopla discovered that the rental prices of solely 4 per cent of properties in England had been lined by the present housing allowance, which has been frozen since 2020. This determine drops to simply 2 per cent in London.
The choice to lift the cap meets one of many calls for made by 119 councils who wrote to Hunt earlier this month warning him {that a} persistent scarcity of social housing coupled with rising demand for momentary lodging was threatening to bankrupt many native authorities.
Stephen Holt, chief of Eastbourne Borough Council, who co-ordinated the letter welcomed the unfreezing of the housing allowance however mentioned the chancellor had failed to deal with different calls for from struggling native councils.
“We warned the chancellor that frontline companies are at actual danger of failing and regrettably there may be little within the Autumn Assertion to now cease that from turning into a actuality,” he mentioned.
The housing advocacy group Shelter mentioned that rising the allowance would assist the 1.7mn personal renters in England who depend on it for his or her lease. However the charity criticised the chancellor for deferring the uplift.
Polly Neate, chief government of Shelter, mentioned: “Unfreezing housing profit to cowl the underside third of native rents is an important lifeline to maintain folks of their houses. Nonetheless, pushing this to April 2024 will go away many households dealing with an unsure winter.”
The Autumn Assertion additionally included an extra £450mn of funding for native authorities in the direction of the constructing of two,400 houses, together with new momentary lodging and housing for Afghan refugees. Individually the federal government is extending its reasonably priced houses assure scheme — a state-backed lending programme to assist the constructing of reasonably priced housing — with an extra £3bn to assist ship 20,000 houses.
For native authorities dealing with a wider disaster in financing with calls for on companies together with housing and social care outstripping their monetary means, the assertion gave little consolation.
Jonathan Carr-West, head of the Native Authorities Data Unit think-tank, mentioned councils have been pulling each lever accessible to them to steadiness their books together with elevating council tax, slicing companies and spending finite reserves. Measures aimed on the sector introduced on Wednesday amounted to “tinkering spherical the sides”, he mentioned.
“Every year residents are paying extra and getting much less from their councils, and with out important structural modifications to the way in which funding is allotted it’s troublesome to think about these dire straits ending.”