Housing benefit cuts will cause homelessness surge in East Midlands
12 August 2010
New figures reveal the full impact that cuts to housing benefit will have on people in the East Midlands. Thousands of people in the East Midlands face debt and homelessness if the Government goes ahead with planned cuts, warns Crisis, the national charity for single homeless people.
The Government announced cuts of £1.8bn to housing benefit in its emergency Budget soon after coming to power. According to an impact assessment by the Department of Work and Pensions, 99% of the 59,100 households in the region reliant on Local Housing Allowance (LHA)-the form of housing benefit paid to tenants in the Private Rented Sector-will be affected. On average, claimants in the East Midlands will see their LHA cut by £10 per week, or £520 per year.
These cuts will leave tenants falling into rent arrears and increasing debt or being forced to leave their homes and at worst becoming homeless.
For people living in one bed properties, those in Nottingham, Erewash, Broxtowe, Gedling and Rushcliffe will be especially badly affected. In all of these areas, those living in one bedroom flats will have their support cut by £780 per year.
The cuts to homes of all sizes will affect 5,840 households in Nottingham, the largest total in the region. Other towns where large numbers of households will be affected are Derby (where 3750 households will face cuts and the cut in the one bedroom rate is £624 per year) and Leicester (where 6400 households will face cuts and the cut in the one bedroom rate is £364).
The numbers of households affected by cuts to homes of all sizes in Erewash, Broxtowe, Gedling and Rushcliffe are as follows:
- 1760 households in Erewash
- 1230 households in Broxtowe
- 1490 households in Gedling
- 760 households in Rushcliffe
Leslie Morphy, Chief Executive of Crisis, said: "The Government promised that in cutting the deficit it would protect the most vulnerable, but these figures show that thousands of those who are in greatest need will have their income hit when they can least afford it.
"As vulnerable private tenants see their income slashed they will inevitably fall into rent arrears or debt and face the spectre of homelessness. The Government must totally rethink these cuts now.
"Not only would a surge in homelessness cause damage for generations to come in the East Midlands, it is also counter-productive. The costs to society of somebody who has lost their home are huge compared to keeping someone in accommodation."
For further media information (including statistics on other local areas) or to request an interview with Crisis spokespeople, please contact Garry Lemon at Crisis on 020 7426 5652 or 07973 372 587 or garry.lemon@crisis.org.uk
Notes to editors
The impact assessment does not include some of the biggest cuts to housing benefit as they will only take place from 2013 onwards.
The impact assessment regarding these and other changes proposed by the Government can be found below. All figures quoted in this document are based on the Tables 5, 7 and 8 in Section B1 of the official impact assessment:
http://www.dwp.gov.uk/docs/impacts-of-hb-proposals.pdf
The impact assessment takes account of four main changes:
- Housing benefit in the private rented sector (local housing allowance) is currently calculated at the mid-point of the local market. The Government has proposed that it will now be calculated on the bottom 30th percentile of rents in a given area.
- The maximum possible rate of LHA will be capped. In reality this change will only affect London.
- Currently those whose rent is lower than the total possible LHA rate have been able to keep up to £15 of the difference to encourage them to shop around. The Government is carrying forward plans to scrap this policy.
- Restriction of the bedroom entitlement to the four bedroom rate
Background on Crisis
Crisis is the national charity for single homeless people. We are dedicated to ending homelessness by delivering life-changing services and campaigning for change. Our innovative education, employment, housing and well-being services address individual needs and help people to transform their lives. We are determined campaigners, working to prevent people from becoming homeless and advocating solutions informed by research and our direct experience. We have ambitious plans for the future and are committed to help more people in more places across the UK. We know we won't end homelessness overnight or on our own. But we take a lead, collaborate with others and, together, make change happen.
