Welfare reform to hit 133,000 London households

The data, commissioned by local authority umbrella group London Councils and carried out by Navigant Consulting, looks at the scale of unaffordability that may result from government plans to restrict benefit for workless households.

The government has announced that under plans to reform welfare, including the introduction of a single universal credit, total benefits will be capped at £500 a week.

The London Councils research finds that one in five families with one child and one in four with two children, would be unable to afford their rent.

More than a third of single parent families with three children would not be able to afford to pay, while more than a quarter will face a shortfall equivalent to 10 per cent of their living costs.

Workless households would lose £427 million per year in total across the capital, the report says.

The research said that some households will be forced to move areas of London with cheaper rents.

The report said: ‘Boroughs with an inward migration of households are likely to face significantly increased service pressures that stem from unemployment, poverty and poor housing conditions.’

London Councils say there is a ‘strong case’ for setting a separate benefits cap for London based on average earnings in the capital.

Labour Assembly member Nicky Gavron said: ‘The mayor and his government keep claiming there will be no social cleansing of London. This report blows that out of the water.

‘It confirms what many have warned - families who did nothing to cause the recession will be hit hardest by these reforms and huge numbers will be driven from their homes. Families being forced to move miles from their workplaces, families and schools will face great and unnecessary suffering.

‘As an absolute minimum the mayor should work with the government - as he said all along he would - to get a regional variation for London which recognises the higher cost of living and of housing in the city.’