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700,000 households don’t receive enough from universal credit to pay rent

Department of Work and Pensions figures show ‘eye-watering impact’ of local housing allowance freeze on renters

More than 700,000 families do not receive enough money from universal credit each month to cover their rent, according to new Department for Work and Pensions (DWP) figures.

Statistics show more than 1.2 million families are in receipt of local housing allowance (LHA) – which is paid as part of universal credit to help with housing costs – across England, Scotland and Wales but around 700,000 pay rent that exceeds support. On average, families in England find themselves a £100 short every month, a total slightly higher than in Scotland and Wales.

Labour’s shadow work and pensions secretary, Karen Buck, released the statistics following a written parliamentary question and was told by government ministers that discretionary housing payments (DHPs) will “deal with the shortfall”. DHPs are payments available from councils to help with housing costs. 

But the Westminster North MP shared the figures warning: “All this before the ban on evictions is due to be lifted shortly, and with the temporary £20 a week uplift to universal credit still due to end this summer.”

Overall, 630,000 households in England have seen their rent outstrip their local housing allowance alongside 34,000 in Scotland and 37,000 in Wales.

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Single adults are most likely to face the issue, making up more than half of the totals in each of the three countries.

The statistics also show how many disabled claimants are in the same situation, amounting to 56,000 familes in England, 4,200 Scottish households and 5,400 in Wales.

In response to Buck’s question, DWPminister Will Quince said the UK government had increased local housing allowance rates since the start of the pandemic, tying them to 30 per cent of the median rent for a local area.

Quince added that the Westminster government had invested “nearly £1bn to provide 1.5 million claimants with £600 extra housing support” during the pandemic but local health allowance rates will remain at the “same levels from April 2021”.

But Marc Francis, director of policy and campaigns at anti-poverty charity Zacchaeus 2000 Trust, warned that the Westminster government’s decision to freeze local housing allowance could see tenants in the private rented sector facing eviction.

While the LHA rates represented 30 per cent of the median rent for local areas last year, claimants face the prospect of losing out as inflation rises during the economic recovery.

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More than six million people turned to universal credit during the pandemic while bailiff-enforced evictions are paused until May 31 in England. Wales has similar protections in place until June 30 while sheriff officers will be unable to attend a property to serve notice or carry out an eviction until September 30 in Scotland.

Francis said: “These figures reveal the eye-watering impact of the “freeze” on local housing allowance rates for tenants in the private rented sector – a majority are now left well short of what they need to pay the rent, forcing them to choose between living below the breadline or falling into arrears and facing eviction.

“It’s absolutely shocking that so many disabled and seriously unwell people are amongst those hit. Last year’s decision to peg rates back at the 30th percentile of the  local market helped, but this has already been undermined by the Chancellor’s decision to freeze them again this year.  It shows why it is so essential for ministers to peg LHA rates back at the median as they were before 2010.”

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