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14 November 2022

The UK now spends more on housing benefit than on most government departments

High private rents and stagnant wages mean housing benefit now costs £23.4bn a year.

By Afiq Fitri

The estimated annual cost of housing benefit is now £23.4bn, more than the total running costs of government departments including the Home Office, the Ministry of Justice and the Department for Transport. Only health and social care, education and defence account for larger shares of day-to-day spending.

In the year to May 2022, an estimated 2.6 million households in England received housing benefit with those privately renting accounting for 29 per cent of all claimants, according to statistics published in August by the Department for Work and Pensions.

“Many tenants who would previously have been in social housing are now living in expensive private rented accommodation, with their rents subsidised by housing benefit, which is costing the Exchequer around £23.4bn per year,” said a report from the House of Lords Built Environment Committee. The committee also called on the government to allocate more funding towards social housing, saying it “would address this problem over time and help meet the most critical needs”.

[See also: The Tories are planning to leave the housing crash for the next government]

Updated figures on how much housing benefit goes directly into the pockets of private landlords are unclear but a study from the National Housing Federation estimated that this figure totalled £9.3bn in 2016, double the amount in 2005. The social policy think tank Civitas previously warned that while the housing benefit system increases the purchasing power of those who need it most, it also “militates against fair prices by subsidising landlords’ rent demands”.

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