A report from the Work and Pensions Committee said: “The evidence is clear that support for housing costs cannot be viewed in isolation from wider support provided through other benefits. When and if claimants experience a shortfall in rent, this can impact other parts of household budgeting and erode income otherwise intended for daily living costs.
“The government should make a commitment to retain its value of the 30th percentile of rents in a broad rental market area.”
Local Housing Allowance rates have been frozen since April 2020, and from April this year, the rate will cover the bottom 30 per cent of rents in any given area. Currently, housing benefit rates are set to be frozen again from next year.
The report also recommended that the Household Support Fund, which allowed local authorities to help those in need and was extended in the Spring Budget, should be a “permanent part of the social security system”.
It added that an uprating guarantee should also be applied to working age benefits.
‘The ball is now back in the government’s court’
Rt Hon Sir Stephen Timms MP, chair of the Work and Pensions Committee, said: “It is right that our benefit system incentivises work, but it should also provide an effective safety net for jobseekers, people on low incomes, carers and those with disabilities. We have heard plenty of evidence that benefits are currently at a level that leaves many unable to afford daily essentials or meet the unavoidable extra costs associated with having a health impairment or disability.
“The government has previously said that it is not possible to come up with an objective way of deciding what benefits should be. Our recommendations are a response to that challenge, and the ball is now back in the government’s court.”
He continued: “On top of acknowledging and acting on a new benchmark and objectives linked to living costs, ministers should commit to consistent uprating of benefits each year. It is time to end the annual ‘will they or won’t they’ speculation and all the worry that brings to those who rely on the social security system for financial support.
“The Household Support Fund has provided a vital layer of additional support for households during the cost-of-living crisis. The government should build on the extension announced in the Budget, and make it a permanent part of the social security system to allow councils to continue to reach those in their local areas who most need help.”
Ben Beadle, chief executive of the National Residential Landlords Association (NRLA), said: “We welcome the committee’s call for housing benefit rates to be reviewed annually in line with housing costs. This has been a longstanding call by the NRLA and others.
“Too often, the housing benefit system has left tenants and responsible landlords not knowing if rents can be covered from one year to the next. What should be a safety net has become a source of frustration and anxiety.
“All parties need to provide certainty for those reliant on benefits that they can keep a roof over their heads by ensuring rates permanently remain linked to market rents.”
