The eligible rents for housing benefit (HB) have not been reduced by 14.5 per cent.
The HB subsidy for temporary accommodation has more than doubled between 2002-03 and 2005-06, with approximately 80 per cent of the increase occurring in London authorities. Such an increase in expenditure is unsustainable and therefore the subsidy thresholds and caps have been reduced by 5 per cent for London authorities from April 2007. Outside London the subsidy thresholds and caps have been frozen.
We are confident that local authorities in London will be able to continue to secure good-quality leased temporary accommodation and meet all their reasonable costs within the limits of the subsidy system.
Local authorities in London will be able to claim full subsidy on rents up to at least £337.55 per week when they house a homeless person in short-term leased accommodation, and 15 authorities in London will be able to claim more than that.
The Government are also keen to ensure that local authorities provide a settled housing solution for households placed into temporary accommodation as soon as they are realistically able to do so.