It is my view that housing allowance rates are of great help to many people in our country and I know that out government is committed to building a secure long-term funding framework for the sector and encouraging further development in the sector.
Changes to Housing Benefit announced in the 2015 Autumn Statement involve aligning the rules for claimants in the social sector with those for claimants renting privately. This means extending the Local Housing Allowance (LHA) rules, which limit the amount of rent which Housing Benefit will cover, to the social sector. However, the Government recognises the importance of ensuring those who are providing supported accommodation to some of the most vulnerable members of our society receive appropriate protections. That is why Government departments have been engaging closely with providers to better understand the issues faced by the supported housing sector.
As a result of these discussions, the Government has decided to delay the implementation of the LHA cap for all social housing to 2019. From 2019 the LHA rules for Housing Benefit will apply to social sector housing, including supported housing. However, for supported housing this will not include the Shared Accommodation Rate, in recognition of the particular challenges this would have placed on tenants. To reflect the higher average costs of offering supported accommodation, which may go above the level of Local Housing Allowance, the Government will devolve 'top up' funding to local authorities (and to the devolved administrations in Wales and Scotland). This will give local authorities an enhanced role in commissioning supported housing, and allow them to take a more coherent approach to planning for housing needs in their area.
The Government has made provision for some supported housing providers to continue to be exempt from the one per cent yearly reduction in social sector rents, in cases where they do not have the capacity to offset the decrease through efficiencies or other adjustments. Specialist types of supported accommodation will be exempt from the rent reduction for the full four years of its duration.