The Local Housing Allowance scheme is systematically flawed according to the housing and homelessness charity, Shelter. It says that in its current form the system fails tenants and landlords.

Shelter has published research based on a survey of 450 LHA claimants and says the results show thousands of tenants are struggling to manage their finances and many of them are in danger of losing their homes. In a report, ‘For whose benefit?’, Shelter calls for the Government to act immediately to restore choice to tenants about whether the allowance is paid directly to them or to their landlord.

The charity also wants the Government to go ahead with its promised two-year review of the system to rectify the problems. Shelter says the Allowance was designed to promote fairness and personal responsibility but as it is currently operating it is removing choice from claimants and causing financial hardship. The report says 95 per cent of those who took part in the survey are struggling to manage their finances.

Shelter’s director of policy and campaigns, Kay Boycott, said: “LHA was intended to introduce desperately needed reform to housing benefit. While we support the original principles of the system, LHA is currently failing tenants and landlords. Our research shows the government must make urgent changes to LHA to ensure claimants do not continue to be disadvantaged.”