LGA publishes analysis projecting £3.9bn temporary accommodation subsidy gap
The Local Government Association (LGA) has published an analysis examining the cumulative cost of the ‘Temporary Accommodation Subsidy Funding Gap’ over the past eight years, warning that councils in England face a cumulative £3.9bn shortfall by 2029/30 if current arrangements remain unchanged. The analysis assesses the difference between housing benefit paid by councils to households in temporary accommodation and the amount reimbursed by the Department for Work and Pensions (DWP), stating that since 2017/18 councils have spent almost £1.5bn more than they have recovered through subsidy. The LGA notes that, under existing arrangements, councils can reclaim only 90% of Local Housing Allowance (LHA) rates set in 2011, although households receive their full housing benefit entitlement, meaning reimbursement does not reflect prevailing costs. It states that in 2024/25 councils spent £1.27bn on housing benefit for temporary accommodation and were reimbursed £911m, leaving a gap of almost £360m, and projects that the annual shortfall will rise to £595m by 2029/30. The LGA has called for the subsidy to be uprated to 90% of prevailing LHA rates, estimating that this change would reduce the projected cumulative gap by around £1.5bn by 2029/30.