delete Authorities in London
This Order amends the 1998 Order to revise how central government calculates housing benefit subsidy to local authorities for temporary accommodation. It establishes two regimes: Article 17 for non self-contained/board and lodging (capped at local housing allowance), and Article 17A for self-contained/short lease (capped at 90% of LHA plus £40/£60 supplement). It defines self-contained accommodation, references Rent Officers Order definitions, and adds Schedule 7 listing 32 London authorities.
This regulation exemplifies how prescriptive subsidy calculations distort housing markets and create administrative burden. The arbitrary 90%/£40/£60 caps, differing treatment of self-contained vs non-self-contained accommodation, and room-counting rules (paragraph 4) create perverse incentives for authorities to structure housing provision around subsidy maximization rather than resident welfare. Local housing allowance caps function as price controls that can reduce private rental supply in affected areas. Such detailed micro-management of subsidy formulas generates compliance costs for authorities and can paradoxically reduce the availability of temporary accommodation by making certain configurations economically unviable. A simpler, principles-based approach to housing benefit subsidy would reduce distortions and administrative costs.