Welfare Cut Could Push More People into Housing Crisis

The head of one of the UK’s largest affordable housing providers has said welfare cuts outlined in the Budget could see affordable housing become unaffordable to people on the lowest incomes. Mark Henderson, Home Group chief executive, claimed the welfare cap outlined by George Osborne could see increasing numbers of people struggle to keep a roof above their heads as housing benefit could fail to keep up with minimum increases in housing costs. Mr Osborne outlined a welfare cap of £119bn in 2015/16 which in future rises will be limited to whichever is the lower between the Consumer Price Index or a rise of 1%. With Government setting annual affordable rent increases at CPI +1% Mr Henderson fears those on the lowest incomes will see an ever widening gap in their incomes and the cost of their rent. Read more on the Home Group website.

IDS Defends Use of Statistics over Benefits Cap

Iain Duncan Smith has said he was right to claim that benefit claimants subject to the new welfare cap were being forced into work, despite being criticised by the government statistics watchdog for making the assertion. The work and pensions secretary said: "I have a belief I am right," as he published polling showing how popular the measure was with the public. He also denied claims that families subject to a cap would be made homeless, arguing that "the homelessness figures have hardly moved at all".  Duncan Smith has already been criticised by the Office for National Statistics for claiming the cap had led to 8,000 people finding work. He was told by the ONS it was not possible to find any causal link between the cap and those finding work. An unrepentant Duncan Smith told Today: "You cannot absolutely prove those two things are connected – you cannot disprove what I said. I believe this to be right. I believe we are already seeing people going back to work who were not going back to work until this group were capped."  Read more on the Guardian website.

Osborne In New Benefits Cap Threat

The controversial overall benefit cap was introduced on Monday at the level of the average salary of £26,000, amid claims that it will force many families into hardship.  But reports now suggest that Conservative MPs want it cut further to £20,000 as part of an assault on welfare spending if Tories win the 2015 general election.  An aide confirmed that Mr Osborne had received representations on lowering the cap, adding: "We want to see how the policy beds in. But clearly over time, lowering the cap is an option."  Backbench Tories argue that the £26,000 cap is still higher than the average wage, because workers would have to earn £35,000 before taking home that much after tax. They calculate that a cut to £20,000 could save a further £840 million a year.  Read more on the Express and Star website.

The Benefit Cap Tackles a Real Problem from the Wrong End

A cap on the total amount of benefits that people receive begins rolling out across England, Wales and Scotland today. The problem is that the cap tackles a real problem from the wrong end. Taxpayers are often not subsidising claimants at all, but rather handing large sums of money to private landlords.  Today, a new report came out detailing how a third of Britain is now effectively off-limits to lower income families because of the increasing cost of rent. This being the case, it shouldn’t be a surprise to learn that the benefits bill has also been increasing – the key point which the government has seemingly missed is that the state is subsidising landlords, rather than tenants.  Read more on the Left Foot Forward blog.

National Roll Out Of Benefit Cap Begins

The total household benefits cap will begin to be rolled out in hundreds of areas across Great Britain from today (15 July).  The cap, which limits combined benefits, including housing benefit to £26,000 a year, will be rolled out gradually across the next 12 weeks.  Over the next six weeks it will be rolled out across 335 local authority areas which have an estimated 275 or fewer households affected. From 12 August it will then be applied to a further 40 local authority areas which have an estimated 276 or more households to be capped.  The DWP said that by the end of September, the cap will have been rolled out to all households. New claims under universal credit will be capped from October.  Read more on Inside Housing.

Government to Limit Spending On Housing Benefit

The government will set an overall cap on the amount that can be spent on key welfare payments, including housing benefit.  Chancellor George Osborne announced that as part of the 2015/16 spending review a cap will be placed on the total amount the government spends on benefits. He said some ‘cyclical’ benefits would be excluded, along with the state pension, but housing benefit will be included. The government is already introducing benefit caps for individuals, but this announcement applies the principle on a national scale. The cap will be introduced from April 2015, and will be set in the Budget each year based on inflation forecasts. Read more on Inside Housing.