Call to lift freeze to housing support: Housing Minister writes to UK Government

To: Secretary of State for Work and Pensions Liz Kendall

From: Minister for Housing Paul McLennan

Dear Ms Kendall

I am writing to express my deep concern about the decision to freeze Local Housing Allowance (LHA) rates for 2025-26 at 2024-25 levels.

In Scotland, freezing rates of support in 2025-26 will mean that 81 of the 90 rates will drop below the 30^th percentile of local rents. The 30^th percentile should be the absolute minimum level of support that people can expect to rely on. This inconsistent approach to housing support leaves many low income households in an uncertain position, not knowing if they are going to receive sufficient support with their rent in future years.

I read with interest the Tackling Homelessness report produced by the Public Accounts Committee, published on Friday 24 January. The Committee is sceptical that the impact on homelessness has been duly considered when setting LHA rates and recommends that the Department for Work and Pensions provide justification for the levels of LHA. I would be grateful to be kept informed on this matter.

The three-year freeze imposed by the previous UK Government had a significant effect on households in Scotland. In the third year of the freeze, LHA rates did not cover the rents of over 40,000 households in Scotland. Of these, the average shortfall for those on Universal Credit was nearly £1,500 per year.

Whilst we will continue to do all we can to support households struggling with the impact of the freeze within devolved powers, the UK Government must commit to unfreezing LHA rates. Research from the Resolution Foundation estimates that permanently repegging LHA rates to the 30th percentile of local rents would mean 75,000 fewer children in poverty by the end of the UK Parliament. This is a missed opportunity to help lift many children out of poverty.

I am therefore calling on you to end the uncertainty and ensure that LHA rates will permanently meet at least the 30^th percentile of local rents in future years. The upcoming Spring Statement is an opportunity to reverse the freeze and deliver adequate support to private sector tenants.

I would welcome a discussion with you on these matters and look forward to a reply.     

Yours sincerely

Paul McLennan