Scottish government pledges millions of pounds to offset LHA freeze

The Scottish government has announced it will provide £9 million in extra funding to tackle the Local Housing Allowance (LHA) freeze.

During the Autumn Budget in England, ministers announced that LHA rates will remain frozen for a second consecutive year in 2026/27.

The funding from the Scottish government comes as they announce a series of measures to tackle child poverty.

Homelessness remains one of the most extreme forms of poverty

The Scottish government claim the £9 million to mitigate the UK government’s freeze on Local Housing Allowance rates, which caps the amount of housing support a household can receive, will support more than 18,000 families across Scotland.

Housing charity Crisis welcomed the news of the LHA funding and called for the Scottish government to do more to tackle homelessness.

Maeve McGoldrick, head of policy and communications at Crisis Scotland, said: “Homelessness remains one of the most extreme forms of poverty, and so we strongly welcome the announcement on funding holistic, early action support for family households.

“We especially welcome the investment from Scottish government to plug the gap left by the Department for Work and Pensions in housing benefit levels for families renting privately.

“Rising living costs, a shortage of genuinely affordable homes and gaps in early intervention support are continually pushing more people into inhumane living situations.

“The announcement will offer some hope to those living in fear of losing their homes, and to those who are already experiencing homelessness.

“However, to bring about an end to homelessness, the government must continue efforts to expand this support to everyone at risk of, or experiencing homelessness.”

Industry reaction

Scottish Association of Landlords (SAL) chief executive, John Blackwood, told Property118: “SAL welcomes any government action that will mitigate child poverty in Scotland and across the United Kingdom.

“In particular, we support measures that focus on the hardest pushed parents and families receiving the support they need with their housing costs.

“Additionally, we would urge both the Scottish and UK governments to work directly with the private rented sector to boost the supply of houses, so that we can ensure everyone has a home that works for them.”

Keep a roof over their heads

The Scottish Housing Secretary Màiri McAllan previously wrote a letter to Housing Secretary Steve Reed, urging the government to rethink its position on LHA rates and to raise them to cover the 30th percentile of local rents.

In the letter, Ms McAllan says: “At a time of continued high rents, the decision to freeze LHA rates makes it harder for low-income households to access and sustain tenancies in the private rented sector.

“UK-wide analysis by the Joseph Rowntree Foundation shows that around half of those receiving housing support are already living below the poverty line. This is deeply worrying for private rented sector tenants who rely on housing support to keep a roof over their heads.”