Dr. Desmond TurnerTo ask the Secretary of State for Work and Pensions what steps he will take to help local authorities cut the use of bed and breakfast hotels for housing homeless people. [43755]
§ Malcolm WicksWe will provide extra funding through the housing benefit subsidy system, worth around £10 million in 2002–03, to help local authorities house homeless people in self-contained temporary accommodation rather than in bed and breakfast hotels.
Under current rules for temporary accommodation, the Department for Work and Pensions refunds 95 per cent. (the normal "full" subsidy rate) of any housing benefit that authorities pay on rents up to their subsidy threshold. Rents above the subsidy threshold up to the cap are reimbursed at 12.5 per cent., while there is no subsidy at all for rents above the cap.
From April 2002, we will raise the 12.5 per cent. reimbursement rate to 95 per cent. for leased and licensed accommodation, while keeping it unchanged for bed and breakfasts.
Paying full subsidy up to the cap should make private sector leasing an affordable option even in expensive areas, building on the significant increase in thresholds and caps that we introduced last year. It will give councils a major incentive to shift away from using bed and breakfast accommodation, benefiting thousands of homeless families. And we are considering strengthening that incentive further from April 2003, once authorities have had time to respond to the new arrangements: for example, by reducing the 12.5 per cent. subsidy on bed and breakfast rents.
This reform supports the homelessness strategy announced today by my right hon. Friend the Secretary of State for Transport, Local Government and the Regions, at columns 1091–94W above.