Housing benefit cuts will cause homelessness surge in North West
12 August 2010
New figures reveal the full impact that cuts to housing benefit will have on people in the North West. Thousands of people in the region 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, virtually all of the 131,180 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. This represents the largest number of people affected for any region outside London. On average, claimants in the North West 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 Manchester, Salford, Liverpool and St Helens will be especially badly affected. In St Helens, those living in one bedroom flats will have their support cut by £780 per year. In Manchester and Salford, the cuts to those in 1 bed flats will be £624 and £676 respectively.
Although the impact of the cuts on individual claimants is somewhat smaller in Liverpool (£468 per 1 bed flat), the cuts will affect 12,620 households of all sizes in the city-the fourth largest total after London, Birmingham and Leeds. Similarly, in Blackpool the cut to each 1 bed flat is not as high as in some other areas (£416) but 12,420 households will be affected by reductions for all people on LHA.
The number of households of all sizes affected in St Helens, Manchester and Salford is as follows:
- 3720 households in St Helens
- 10210 households in Manchester
- 5470 households in Salford
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 North West, 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.
