Speaking ahead of the forthcoming UK Budget, the minister also said the Treasury should reverse the forecast 10% real terms cut to the Scottish Government’s capital budget over the medium term.

Mr McLennan said: “The damage done by the UK Government’s three-year Local Housing Allowance freeze has been considerable. An estimated £819 million cut to the allowance across Great Britain has forced people to make difficult choices between paying their rent, feeding their family, or heating their home.

“In order to plug this gap, further worsened by the bedroom tax and the benefit cap, we are allocating £84 million of our limited budget for Discretionary Housing Payments in this financial year. This will rise to £90 million in 2024-25, due to the continued difficult choices facing households.

“We are clear that this is the right thing to do to support households. However, the Scottish Government should not be forced to step in and divert money from our own housing and anti-poverty policies because the UK Government refuses to ensure there is an adequate safety net for people on the lowest incomes.

“The UK Government must end uncertainty for tenants and deliver a permanent solution to the Local Housing Allowance shortfall by committing to link rates to rents for future years.

“I am also calling for this UK Budget to provide increased capital spending and clarity over future Financial Transaction allocations, which would mean more funding could be provided for affordable housing in 2024-25.”

Local Housing Allowance rates set the housing element of Universal Credit and Housing Benefit for privately renting tenants. In the 2023 Autumn Statement, the Government announced an end to a three-year cash freeze in LHA rates from 2024.

Figures published by the UK Government in January 2024 show LHA rates were not high enough to cover the rents of more than 40,000 households in Scotland. Of these, the average shortfall for those on Universal Credit was nearly £1,500 per year.

The minister’s letter is available here.