Housing benefit cap to be postponed until January 2012

Move comes amid fears councils have not had time to prepare for possible exodus of tenants from city centres


Patrick Wintour
Sunday 28 November 2010 20.30 GMT

There are fears that the housing benefit cap will lead to an exodus of people from high-rent areas such as central London. Photograph: Alastair Grant/AP


Ministers will this week signal a partial retreat on controversial plans to cap housing benefit for tenants in private rented housing by agreeing the measures will not be introduced until January 2012, nine months later than previously planned.

The changes were announced in June and were due to save £50m a year. But in a bid to salvage any lost income, the department of work and pensions will announce that a related housing benefit cut will be brought forward more quickly for new tenants than the planned start date of October.

There have been fears that councils have not had time to prepare for what may prove to be an exodus of existing tenants from high-rent centres of big cities, so putting pressure on schools and other public services in lower-rent areas to which they are likely to move.

There had been reports, hotly denied, that central London councils were going to have to block book bed and breakfast accommodation due to the surge in homelessness.

Iain Duncan-Smith, the work and pensions secretary, has been under pressure from Liberal Democrats, the Conservative mayor of London Boris Johnson as well as the London Councils group.

It was also clear that the government did not want a swathe of stories of pensioners being forced to leave their homes unable to pay rent due to cuts in housing benefit in the run up to the May local elections.

The caps to the local housing allowance – the equivalent of housing benefit – range from £250 for a one-bedroom property to £400 for a four-bedroom property.

Anyone living in a more expensive property will be forced to leave or make up the difference in rent themselves.

London Councils claims 18,645 households in London will be adversely affected by the proposed caps – 14,661 of which are households with children.

ORIGINAL POST

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~ by jonathanure on November 29, 2010.

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