Hello mate,
I did a bit of research on bedding and straw seemed commonly used, but it has its downfalls. While it is cheap and warm, it does harbor ticks, mites, fleas etc. It also gives off a fine dust that can get on the dogs chest, although a lot of people seem to use it without complaint.
Try wax coated paper shreddings, less mess, no mites etc, very warm and it wont stay damp like straw, although dogs shouldn't be put into their kennel wet anyway.
Regards
Blainy