What Does The Benefit Cap Mean For Cities?

First, the impact of the benefit cap will vary significantly between cities. Because it is being set nationally at £26,000 the vast majority of these households will be located in just a few cities, with around half estimated to live in London.

Second, the benefit cap is unlikely to encourage large numbers of people back to work. Many UK cities face the challenge of stubbornly high unemployment.  Research suggests that while these kinds of welfare sanctions may be successful in getting people off benefits, this may be because they drop out of the system altogether, rather than moving into sustainable employment.

Third, the benefit cap does nothing to change the fundamental factors driving up the cost of welfare across the country. For example, housing benefit payments represent the second largest proportion of welfare spending in the UK. They tend to be largest in those cities where house prices and rental rates have increased sharply over the past twenty years. This means that more people in these cities require financial support to find a home, and that the cost of this support is also increasing. Simply capping the total amount of benefits that working-age people can receive will not tackle this issue. Read more on the Centre for Cities website.