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Government urged to raise housing benefit cap for people placed in temporary hotel accommodation

Publication date:

St Albans City and District Councillors have called on the Government to increase the funding it provides for placing homeless people in temporary hotel accommodation.

A motion demanding an increase in the housing benefit subsidy cap was passed unopposed at a Full Council meeting.

In common with other local authorities, the Council has seen a rise in applications for help from people at risk of homelessness.

The Council has only a limited amount of temporary accommodation of its own and may have no other option but to place people in hotel accommodation instead.

The cost of housing someone in hotel accommodation this year has ranged from £538 to £707 a week per person.

However, the subsidy for this - the maximum amount the Council can receive back via housing benefit payments - has been capped at £150 a week. 

This has left the Council having to pay the difference of between £388 to £577 a week.

Overall, the net cost to the Council of housing homeless people in temporary accommodation this financial year is projected to be £272,740.

That is almost three times the 2022/23 figure of £96,113 with next year’s net cost expected to increase even further.

The motion calling for an increase to the housing benefit cap was moved by Cllr Jacqui Taylor, Lead for Housing, and seconded by Cllr Paul de Kort, Lead for Resources.

It said: 

The subsidy we receive remains capped at 2011 rates, creating unchecked financial stress on Council budgets and the real risk of a breakdown in the safety net that our most vulnerable residents rely on.

Cllr Taylor said after the meeting:

We are standing with other Councils in asking the Government to take action to ease the financial burden that has fallen on local authorities.

There has been a cross-party consensus among Councillors across the country about the need for the housing benefit cap to be raised by a substantial amount. It has not gone up since 2011 and is quite unrealistic.

We have no control over the demand for temporary accommodation which is increasing alarmingly and do not get enough financial support to deal with it. 

We are asking the Chancellor to allocate appropriate funds to help cover our costs and until he does, we will continue to lobby with other Councils on the issue.

The motion was passed at the Full Council meeting on Wednesday 28 February with 42 Councillors voting in favour, none against and two abstaining.

Media contact: John McJannet, Principal Communications Officer: 01727- 819533;