01 April 2010
Reforms to temporary accommodation to save £30 million Action taken to reform the Housing Benefit subsidy scheme for people living in temporary accommodation will save £30 million a year, do more to make rents affordable for families and ensure that local authorities charge reasonable rates for this type of accommodation.
The new scheme for temporary accommodation uses Local Housing Allowance rates to determine maximum subsidies based on property size and location. It comes alongside new caps for the subsidy rates of £500 a week for inner London boroughs and £375 outer London boroughs. These caps will bring an additional cost savings of £3-5million a year.
Benefits Minister Helen Goodman said:
"We're committed to making Housing Benefit fair to the taxpayer and to families in need. We've already taken action in the Budget to remove excessive rates and these reforms will do even more to make Housing Benefit fairer. We will publish further plans later in the year to make sure Housing Benefit encourages people into jobs."
Councils place vulnerable people, who are homeless, in temporary accommodation until a more permanent home can be found. It is important that the system doesn't incentivise councils to push up rents.
The caps to temporary accommodation rates will come into effect immediately and will do more to ensure that rents are affordable for most families.
Notes to Editors:
1.Temporary Accommodation rates are based on Local Housing Allowance rates used to determine the maximum subsidy amount based on location and property size.
2.Action taken in the Budget will remove the highest rents from the Local Housing Allowance calculations.
3.The new subsidy caps for temporary accommodation are: £500 for inner London boroughs, £375 for out of London boroughs and £375 for the rest of the country. The vast majority of out of London boroughs have rates set below this level already.
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