Government warned its bid to save £4bn will create areas of social deprivation
Housing benefit cuts slammed by sector
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Government plans to dock housing benefit from the long-term unemployed have been slammed as ‘nasty’ by tenants’ groups.
Landlords also warned that reforms to local housing allowance risk creating ‘benefits ghettos’.
The measure to cut housing benefit by 10 per cent to people who have been on jobseekers allowance for more than a year from April 2013 was announced in Tuesday’s emergency Budget.
The plan will have widespread impact as 700,000 people in the social and private rented sectors have claimed jobseekers allowance and housing benefit for a year or more.
The plan, which will raise £210 million between 2013/14 and 2014/15, is part of a package of measures designed to cut the housing benefit bill by £4.225 billion between 2011/12 and 2014/15 and push more benefit claimants into work.
The Budget document said housing benefit was seen as providing ‘excessively generous payments that damage work incentives’. Housing benefit cost the public purse £17 billion in 2008/09 and has risen by £6 billion in a decade.
Social tenants deemed to be in homes bigger than they need will also see reductions the money they receive. Housing benefit will be linked to family size for social sector tenants from April 2013. The measure is expected to save £980 million.
The Chartered Institute of Housing and the National Housing Federation warned that significant numbers of people on jobseekers allowance live in social housing and cutting their benefit could lead to escalating arrears and hardship.
The Budget also contained other measures for local housing allowance which only apply in the private rented sector. They include caps on local housing allowance from April 2011, which will be limited to between £280 and £400 a week, depending on house size.
LHA will also increase in line with the consumer price index, rather than the higher retail price index, and benefit will be reduced if there are non-dependent people living with the claimant from April 2011.
Richard Mandunya, a social housing tenant and board member of the National Tenant Voice, described the move to cut jobseekers’ benefits as ‘nasty’.
He said: ‘What is the guarantee you can get a job in the present climate?’
Sue Witherspoon, head of housing at Havering Council, speaking at this week’s Chartered Institute of Housing conference in Harrogate, said several authorities in London would have no private rents below the cap.
‘It will lead to a ghettoisation of benefit claimants,’ she said.
The Budget at a glance
Housing benefit
- Reforms to housing benefit across the private and social sectors will save £4.225 billion between 2011/12 and 2014/15
- 10 per cent cut to housing benefit for claimants on jobseekers allowance for more than a year from April 2013
- Restrictions on housing benefit for families in social sector who have a larger home than they need
Departmental cuts
- Communities and Local Government department could see average real terms cuts to its budgets of around 25 per cent over four years
VAT
- Rise to 20 per cent from 4January 2011
RDAs
- To be replaced by local economic partnerships by March/April 2012
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Readers' comments (2)
Anonymous | 25/06/2010 2:06 am
"The measure to cut housing benefit by 10 per cent to people who have been on jobseekers allowance for more than a year from April 2013 was announced in Tuesday’s emergency Budget."
Ah Ha, this applies to me. I have read several forums on this subject with many people saying that "this is a good thing to get the lazy so and so's off their behinds". Well here's what I'll be doing if they try that with me. Straight off to the councils housing department with my belongings, and tell them I'm now homeless. Maybe, after 20 years of waiting for a social home I may just get one.
Before anyone gets excited, I have worked for 17 years, never claimed any benefits and been homeless twice (properly homeless, not the councils definition of it)! I have rented numerous private properties only to be moved out when, shared tenant wanted to go back home, LL wanted to sell as moving abroad, LL wanted property back etc. I even spent several months sleeping in the boiler room at work as I couldn't get anywhere to rent. But council refused to help, the usual "single male, no chance" story.
I was made redundant in Sept 07 and lost my accomodation that came with the job. Went to the council and told them the situation, still they refused to help. To cut a long story short a friend of mine has put me up temporally in her house while I am waiting for social housing. Had to claim HB and JSA after savings ran out and council still refuse to see me as someone in need of housing. The housing dept staff at the council tell lies, the manager won't speak to you, councillors are not interested and staff at the MP's office just told me to rent privately when I phoned them to try to make an appointment. To be quite blunt, I'm fed up of the uncertainty of private housing, the ridiculously high cost of housing and private rents. All I would like is a secure place that I can finally get my stuff out and call my home. I'm desperate to get back to work but one things for sure, this goverment will not see a penny in tax from me until my situation is finally recognised.
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Anonymous | 25/06/2010 6:49 am
I rent a 2 bed home and I live alone so I guess they will force me out. But I look after my two grandkids while mum is at work. They need to sleep at times. Also, having a spare bedroom also means that my relatives from distant towns can stay with me from time to time.
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