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Housing

Government scraps cap on housing benefit in social sector

Housing groups welcome Theresa May's decision to not to implement limits on Local Housing Allowance

Theresa May has decided to ditch her government’s plan to cap housing benefit for people in social housing.

The government had intended to impose new limits on housing benefit in the social housing – in line with a cap already faced by tenants in the private sector – from April 2019.

But May said that ministers “will not apply the Local Housing Allowance cap to supported housing…Indeed we will not be implementing it in the wider social rented sector.”

The U-turn was welcomed by Labour, the Lib Dems and leading housing groups.

It was also cheered by organisations working with homeless people, who had argued the caps should not be applied to those living in supported accommodation.

Some had warned the changes would have meant housing associations not having the funding to build specialist accommodation.

But following May’s decision, the housing and care provider Home Group announced that it is bringing forward a £50 million investment in three new supported housing and health schemes. 

Rachael Byrne, an executive director at Home Group said the government reversal “really puts the whole of the supported and socialhousing sector on a long-term sustainable footing.” 

This will be welcome news for people who are homeless

“This will be welcome news for people who are homeless and other vulnerable groups,” said Dominic Williamson, an executive director of at the charity St Mungo’s.

“This is a step in the right direction but we await next week’s full proposals for supported housing funding with interest.

The government has also announced that it will be publishing a White Paper on the future of funding for supported housing on Tuesday next week.

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