Welfare reforms ‘have fuelled child poverty’

The government has been urged to reform the local housing allowance (LHA) system to address child poverty.

Before April 2011, people receiving LHA could get help covering rent up to the average (50th percentile) cost of rental properties in their area. 

But this was changed so households could only get support for cheaper properties (30th percentile).

According to the Institute for Public Policy Research (IPPR), this has made at least two-fifths of private rental properties less affordable and helped to fuel child poverty.

Estimates from the IPPR suggest that there are currently 440,000 households with children whose housing support no longer covers their rental costs.

Number of affected households will rise

As it stands, LHA rates aren’t due to go up in the next financial year.

But the IPPR believes the number of households affected will increase by a further 90,000 by March 2026.

This, it says, means about 925,000 children will be affected by housing support shortfalls.

“As rents rise whilst support is frozen, households will need to find the money to pay their rent from other sources,” the IPPR stated.

The thinktank said this would leave families “worse off overall” despite many benefits being uprated in April.

What’s the answer?

The IPPR has recommended that the government:

• make sure local housing allowances reflect average local rent
• remove the household benefit cap
• build 100,000 new social homes a year over 20 years
• set up an English housing tribunal to make sure that new rights given to private renters can be properly enforced

Henry Parkes, principal economist at IPPR, said: “A safe, secure, and affordable home should be the foundation for every child’s future. 

“Instead, too many families are trapped in a cycle of poverty and instability caused by unaffordable rents and insecure tenancies. 

“Housing reform isn’t just a moral imperative - it’s an economic necessity.”

Are you struggling with housing costs?

If you’re finding it hard to keep up with soaring rents and other living costs, then help is available.

Get in touch with your local council to see you can get help from the household support fund.

You could also use our free calculator to check that you’re claiming all the benefits you’re entitled to.

And if you’re finding it hard to manage your debts, then find out how we can help.