The Government has announced that the Local Housing Allowance (LHA) – the maximum help private renters can receive in Housing Benefit to pay their rent – will be frozen again for 2023-24 at 2019 levels. The independent Institute for Fiscal Studies (IFS) says decisions to cap LHA over several years has ‘led to a growing gap between actual rents and the amount of housing support families could receive. On top of this, since rental prices do not grow evenly across the country, this gap was much larger for families who lived in areas where rents had grown quickly than for those who lived in areas where they had grown slowly.’ [i]

The IFS comments ‘Compared to uprating them to match local rents, the freeze in LHA rates will reduce support for nearly 1.1 million households by an average of £50 per month, saving the government more than £650 million in 2023–24.’

The figures from the IFS show that in Oldham the LHA is set at £100 below the actual rent paid by tenants, leaving them to find the difference. The difference between LHA and actual rent levels varies across the UK – for example the gap is only £15 in Lancaster.

Councillor Kyle Phythian, who leads on Housing for Oldham Council said ‘The Government is heaping more misery on private renters in Oldham. Housing Benefit is supposed to cover housing costs but freezing the LHA means people already hit by the Tory cost of living crisis will struggle to keep a roof over their heads. Many mortgage payers are already paying hundreds of pounds extra because of the disastrous Truss experiment. The housing crisis in Oldham is getting worse by the week – in December 2022 record numbers of people approached the Council’s Housing Options team for help. Radical action is needed by Government to provide homes people can afford and I can’t see any sign that they realise just how bad the situation is.’

Councillor Phythian added ‘Oldham’s Labour Council is doing all it can to support residents through the ‘We can Help’ campaign. Our Engagement Team is visiting residents to make sure people know what help is on offer. Working with Citizens Advice, we have increased free help with benefits and money advice – for example, a drop in session has just started in my own ward at Limehurst Library every Tuesday from 2.30 to 4pm. It’s really important to get advice sooner rather than later. We’ve stepped up to help people, but the Government has no idea of the problems too many of us are trying to cope with.’