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Future benefit cap on social rents

Following the plans sets out in the autumn Spending Review to cap the benefit available to assist with social rented housing costs to Local Housing Allowance rates, the HSEU has set it concerns out in a letter to Lord Freud in conjunction with the Chartered Institute of Housing Scotland, Homeless Action Scotland, the Scottish Federation of Housing Associations and the Association of Local Authority Chief Housing Officers.   From information gathered through a survey carried out by the SFHA and set out in its recent briefing it is estimated that 8 housing associations could face a shortfall of between £5.2m – £14.3m per year.  Further clarification is required about exactly how the UK government intends to apply the cap to supported housing  and indeed whether there will be exemptions for some or all supported housing.  Whilst the changes would not come into force until April 2018 the issue is an urgent one particularly for those with longer term support needs as anyone commencing  a supported housing tenancy from 1st April 2016 could be affected in due course.

Update 28th January 2016:

Lord Freud responded to questions raised in the Lords and House of Commons about supported housing and the benefits system.

In relation to Housing Benefit being capped at LHA rate, he has said:

“I am not in a position to be utterly specific about how we will do this but what I can say is that we will put in place the appropriate protection for supported housing.

DWP and DCLG will be working closely together to make sure that protections are in place. We appreciate the  concerns and will act to do this urgently.

There are various solutions we could discuss. I make that commitment in the context of what I have already said on the 1% that we will now just sort out the caps”

When pressed, he reiterated that the Government would act urgently to address the concerns agencies have around the LHA caps although could not give details.

He also clarified that  supported housing in England will be exempted from the 1% Rent Reduction and will be able to raise rents by CPI+1% as per the Rent Formula.

Complete comments as recorded in the official Parliamentary record can be accessed here:


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