DWP explained that it sets the subsidy level using a rate that has never covered local authorities’ full costs, to incentivise them in their procurement of temporary accommodation. MHCLG added that it considers local authorities’ financial position with regard to the temporary accommodation subsidy when making decisions about the local government funding settlement, but it did not explain in any further detail how it does this.33 30 TH0006 31 TH0022 32 C&AG’s Report, paras 3.12, 3.13 33 Qq 38...

DWP explained that it sets the subsidy level using a rate that has never covered local authorities’ full costs, to incentivise them in their procurement of temporary accommodation. MHCLG added that it considers local authorities’ financial position with regard to the temporary accommodation subsidy when making decisions about the local government funding settlement, but it did not explain in any further detail how it does this.33 30 TH0006 31 TH0022 32 C&AG’s Report, paras 3.12, 3.13 33 Qq 38, 74 15 2 Strategic issues for government departments Cross-government approach Type: conclusion | Number: 24 | Response status: accepted Government response: 4.1 The government agrees with the Committee’s recommendation. Recommendation implemented 4.2 The Department for Work and Pensions wrote to Committee, on 21 February 2025, setting out its justification for the levels of Local Housing Allowance it has set, both for individuals and for local authoriti