Chancellor Jeremy Hunt could finally unfreeze local housing allowance and even bring it back to a level covering 30% of local rents, ITV News understands.
The chancellor has been considering the move since both the housing secretary, Michael Gove, and welfare secretary, Mel Stride, asked him to – but it would be expensive, costing £1billion a year.
Sources say the final decision is not certain but the soundings I’ve had within government suggest that many are optimistic about the change.
This would act as a reset for LHA, which has been frozen since 2020, a move that councils and charities say has been devastating and has fuelled the homelessness crisis.
The decision drove down the number of homes affordable for housing benefit recipients around the country.
This summer, the local housing allowance was at the lowest level on record, due to rent increases, The Institute for Fiscal Studies reported.
The proportion of properties covered by it has dropped to 5-23% while 38% of private renters get housing benefit, the IFS said.
But ITV News' Investigations Correspondent Dan Hewitt recently revealed that in some places it had gone further and resulted in 0% of affordable properties.
He has also reported on councils- via the District Councils Network - sending letters to the chancellor, asking for immediate financial help to tackle the homelessness crisis - including a specific call to urgently raise LHA back to a level covering 30% of rents.
So is Jeremy Hunt about to fix this?
It is unsurprising that there has been pressure from the housing and welfare secretaries- as they no doubt have seen the impact of the freeze.
Ahead of previous budgets and statements I’ve heard absolutely nothing on this changing.
But ahead of the Autumn Statement I’m hearing of possible movement in government- with some claiming they think it’s odds on to change.
Of course, the chancellor is under pressure in other areas including tax cuts- but he does have some unexpected additional headroom.
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