It’s a sobering thought that housing benefit cuts that have received little attention so far will save many times more money than the bedroom size caps that have taken all the headlines.
The caps will also be one of the first cuts to be introduced alongside the reduction to the 30th percentile, the cut to the £15 excess and the imposition of a four-bed limit
The draconian effects were shown in an impact assessment published on Friday. The net result is that all but a handful of local housing allowance claimants will lose an average of £12 a week or £600 a year. Meanwhile far less private rented accommodation will be available to claimants. In Central London availability will fall from 52% to just 7% of homes.
However, those dramatic cuts still only account for a third of the £1.8bn a year savings that are planned by 2014/15.
Cuts to deductions for non-dependents will save £125m in 2011/12 and £425m in 2014/15 and will be debated alongside decisions on uprating benefits after the pre-Budget report.
Reducing awards to 90% for anyone claiming jobseekers allowance for more than 12 months will save £100m in 2013/14 and £110m in 2014/15. Switching to CPI indexation for local housing allowance will save £300m in 2013/14 and £390m in 2014/15. And limiting working age entitlement to reflect the size of the family in the social sector will save £490m in 2014/15.
Together, those last three measures account for more than half of the proposed savings. Because they will take affect later, the impact will be debated in the next welfare bill. However, to put them in context, the working age entitlement limit will on its own save seven times more than the £70m forecast from bedroom caps in 2014/15.
The number of people on JSA for more than 12 months doubled between May 2009 and May 2010 and the Charterted Institute of Housing (CIH) estimates that the 10% cut could affect more than 100,000 claims.
Indexing claims according to the CPI rather than the retail prices index will continue to ratchet up savings and tenant shortfalls against their rent year after year. The RPI includes housing costs whereas the CPI does not and over the last two decades it has risen by an average of 2.5% a year more.
Limiting payments to working age tenants by property size is expected to yield the highest savings of all. The CIH says that the last English Housing Survey identified 430,000 social sector households as under-occupying but did not break down how many of these were pensioners and how many were of working age.
That implies huge cuts in their average benefit. It’s unclear how the £490m estimated saving stacks up. However, if we assume that half those under-occupying tenants are of working age but that half of the savings come from freeing up larger homes for other tenants, that implies they would be facing an average cut of £1,100 or £22 a week each - almost twice as much as the loss private tenants are facing from the first four cuts.
The debate may have started with the caps but it is set to run and run.
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