Housing benefit cuts will cause homelessness surge in London
12 August 2010
New figures reveal the full impact that cuts to housing benefit will have on people in London. Nearly 160,000 households in the Capital 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, every one of the 159,370 households in the Capital 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 London will see their LHA cut by £22 per week, or £1144 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 Westminster, Kensington & Chelsea and Camden will be worst hit with average annual losses of £3796, £3484 and £1612 respectively.
The cuts to houses of all sizes will affect:
- 5060 households in Westminster
- 2290 households in Kensington & Chelsea
- 2940 households in Camden
But its not just expensive areas in central London which will be affected, the highest number of people affected in any borough is in Brent with 9650 households losing out. Hackney and Tower Hamlets the second and third most deprived boroughs in the country, will see 6790 and 3580 poor households losing money.
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. Far from just hitting the most expensive areas in London, these cuts will have a massive impact across the capital including on households in areas which rank amongst the most deprived in the country.
"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 London, 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.
