[KF] New analysis by Shelter and the Chartered Institute of Housing (CIH) reveals that Government plans to change the way Housing Benefit is calculated will price low income households out of a third of local authorities in England and push them away from areas with higher employment.
A joint report by the two housing organisations looks at the impact of changes to Housing Benefit announced in last month's Welfare Reform Bill, including the move to up-rate Local Housing Allowance for private tenants using the Consumer Price Index of inflation rather than the cost of local rents. This will be the measure used to calculate the housing element of the new Universal Credit.
The move, which is planned for 2013, will break the link between the housing support people receive and the housing costs they pay. Over time, where rents rise faster than the CPI, this will mean Housing Benefit will cover less and less of the housing costs people face.
The report shows that by 2023, just ten years after the change comes in, 34% of local authorities outside of London will be unaffordable for people claiming Local Housing Allowance, including working households on low incomes and those unable to work such as pensioners, carers and people with disabilities.
The local authorities affected are concentrated in the East of England, East Midlands and the South West where rents have been rising fastest over recent years, showing how claimants will find themselves priced out of huge swathes of the country.
Further analysis reveals a pattern between these areas and those regions with the biggest proportion of claimants in work and the highest rates of employment.
Meanwhile, regions that remain affordable in 2023 - the North East, North West and Yorkshire and Humber – are those with the above average rates of economic inactivity and unemployment.
Shelter and the CIH are warning that the change could undermine the Government's aim to get people back into work if they are forced to move away from areas where the job opportunities are into those with lower employment. It could also mean that claimants who are working could find their jobs at risk if they can no longer live near to where they work.
Shelter chief executive Campbell Robb said:
"These changes will mean that the level of housing support people receive will be based on the average increase in the price of random items like washing machines and a meal out, instead of the rents they actually pay."
Chartered Institute of Housing Chief Executive, Sarah Webb said:
"You don't help someone back in to work by forcing them to move from neighbourhoods where they have established support networks and make them move to areas with fewer employment opportunities, miles from the very support that can make work viable."
HB Changes Will Make Large Areas of the UK Unaffordable for Many
Direct Payments Rule Can Last for Two Years
The Department for Work and Pensions has already announced that councils will be given 'discretion' to make direct payments of Local Housing Allowance (LHA) to landlords if they set their rents at more affordable levels.
It has now emerged that the protection would last for two years from today.
Reforms come into effect on 1st April.
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Minister to Promote Benefit Reforms with a Record
With the aim of publicising the Government's Housing Benefit reforms, Housing Minister Grant Shapps is to release a charity version of The Clash's 'Should I stay or should I go?'.
He will team up with the surviving members of the seminal punk band and provide lead vocals on the cover version.
Dizzee Rascal will also rap on the track in a bid to spread its message to the widest possible audience.
It is understood that the idea came from a conversation with his cousin Mick Jones - who was lead guitarist with The Clash and later formed the 1980s group Big Audio Dynamite.
The record is being released to coincide with a raft of changes to Housing Benefit rules that come into effect on 1 April - which include new maximum local housing allowance rates that cannot exceed £250 for a one-bed property or £400 for a four-bed.
The Minister said:
"The song poses a question that families on benefits who are paying extortionate rents should be asking themselves."
It includes the line - 'If they go, there might be trouble, but if they stay it will be double.'
Proceeds from the record will be donated to Shelter, to help it cope with an anticipated rise in demand for its advice lines.