Minister: benefit cap will cause 'casualties'
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A government minister has admitted there will be ‘casualties’ from the decision to cap housing benefit.
Communities and Local Government department minister Baroness Hanham said it will be up to councils to deal with people who could no longer afford to live in their home as a result.
Speaking in a House of Lords debate about housing, she defended plans to cut the £21 billion housing benefit bill by limiting local housing allowance rates to between £250 and £400 a week depending on house size.
LHA rates will also be set by using the bottom 30 per cent of rates rather than the median from October 2011, and will be linked to the consumer price index rather than the retail price index. Campaign groups fear the reforms will make many areas unaffordable for those on low incomes and lead to increased homelessness.
Baroness Hanham said: ‘The costs have gone up from about £14 billion to £21 billion. That is an enormous sum of money.
‘Although it may not be the largest part of it, there have been and are well publicised examples of people who are receiving housing benefit at an enormous rate a week.
‘There have been examples of high housing benefit, perhaps having had to be paid to get people into social housing, but that cannot go on. That is why the decision has been made to cap the level at which it can be paid.
‘Yes, there will be casualties from that; there is no doubt about that. It will be up to local authorities to deal with that as sensitively and carefully as they can if people have to leave their home.’
Inside Housing has launched a campaign, What’s The Benefit?, calling on the government to find a fairer way of reducing the cost of housing benefit.
Visit our What’s the Benefit? page for more information or sign our petition to support the campaign
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Readers' comments (12)
philipjohn001 | 12/07/2010 10:00 am
Will the government use the money it saves from this draconian step backwards to fund the building or acquisition of more social housing?
Don't hold your breath....
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SocialHousingWorks | 12/07/2010 11:10 am
I can see why you've started a campaign - whipping up a bit of a frenzy by scaremongering seems to be what journalism is about these days - but can you please add a little bit of balance to the discussion.
Reading the many comments, it seems that there as many readers who are in favour of the Government proposals as against.
Unless you are purely trying to make a political statement, can you add balance by setting up a petition to support the Government changes, or allow people to sign up against your current petition.
That way, when you make the inveitable claim that readers of Inside Housing are against the policies, you'll at least give it a bit of legitimacy.
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Anonymous | 12/07/2010 2:16 pm
I can only assume that SocialHousingWorks does not work for a social landlord, as s/he couldn't think that her/his employer's best interests would be served by an Inside Housing campaign which reflects its readers personal political opinions.
Social landlords are now faced with a Budget which proposes high-risk cuts to tenant benefits - and landlord income streams - from April 2013.
Surely all readers who work for social landlords have a duty to put pressure on government to modify the HB 'property size' and 'Jobseekers Allowance' proposals, to reduce the effect on income streams, and this is best done as part of a broad coalition of housing people opposing many aspects of the cuts, starting with the most immediate.
Put another way, if you're not prepared to stand beside the homelessness lobby and say 'this is wrong', then in two years you can expect Shelter and CAB to oppose the later tranche of cuts which will cause huge job losses in social housing.
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Christopher Webb | 12/07/2010 3:07 pm
The Baroness may be feeling all is well from the view of her ivory tower but just where does she propose the guiltless casualties from her attacks are housed. It is all well and good saying it will be the Councils' responsibility, but other than emergency housing with a private sector landlord (that would be the well publicised examples of people who are receiving housing benefit at an enormous rate a week) there is nowhere owing to the successive governments' deliberate under investment.
Would the Baroness welcome the new homeless, her policy is about to cause, on her lawns?
Cap the rents, that way benefit savings are miximised and tenants are not punished for being housed.
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gordon thompson | 12/07/2010 3:24 pm
All Tory policy is aimed at making the rich richer and the poor poorer. Most of the cuts will have this effect. What surpises me is that anyone is surprised.
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John Gray | 12/07/2010 9:39 pm
there is an alternative - check out http://www.guardian.co.uk/politics/davehillblog/2010/jul/11/ken-livingstone-rachel-johnson-housing-benefit-cap-london
Even Boris's sister call for rent controls
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Only One | 13/07/2010 2:31 pm
To be honest we have all (those in the social housing sector) had a bit of an easy time of late. £bns of development grant funding from the HCA, no limits on the overall benefit spend to fund those moving into the properties developed......it's been easy. Now, like every other industry we have to show a bit of composure and throttle back to how it was before the glory days of free spend. It was bound to happen. So...there are two options....moan it's sooo unfair and we should be exempt from the global economic situation. Or we can look at innovative ways to provide the housing at affordable levels - or are we all so restricted in our ways of thinking and delivery???
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Anonymous | 13/07/2010 3:00 pm
Of course the government won't put any money it saves into social housing. You may have heard there's a debt crisis and it could be used to pay off some of it.
Rent controls are an option, but maybe even less popular to the private sector than benefit caps, as they wouldn't be able to charge as high rents to non-benefit dependent renters (either).
Benefit controls or capping had to start sometime. Their cost is unsustainable. I believe it's immoral to pay huge sums of tax payers' money to private property owners in the form of HB so they can live a life of luxury funded by taxpayers. And, as many have pointed out, if you can't afford to live somewhere, don't live there. Why should taxpayers fund that luxury? I'm sure many of us could think of places they'd rather live if only we could afford it?
Of course we'd all like to have more social housing for the many who still need it, but paying huge amounts of HB to private landlords would not deliver that in the best of times either, as it doesn't now.
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Progressive Solutions Required | 13/07/2010 3:05 pm
So anon - is it better to make tenants suffer through benefit controls, or to reduce private sector landlord profits through rent controls?
Should not be a hard choice for a human being!
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Anonymous | 13/07/2010 4:12 pm
Hmm, what do you think PSR? What WOULD you do? I assume a rhetorical question?
Yes, I'd personally go for rent controls. But you can't see the problem in trying to sell that one to the current administration? And if someone wants to and can afford to pay the high private sector rents, that's up to them if they want to do that? Or are you actually happy for the taxpapyer to give unlimited support to HB payments? I'd thought not.
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