Citizens Advice: Housing benefit cuts 'will cause homes crisis'

Proposed cuts to housing benefit will result in higher levels of poverty, debt, rent arrears and homelessness, a national charity warned today.

Citizens Advice also advised that the changes should be delayed, in evidence submitted to the Department of Work and Pensions' Social Security Advisory Committee, whose consultation on the changes ends today. The committee is expected to publish its recommendations to the Government in the late autumn.

The announced cuts include a cap on housing benefit payments from April next year, a move strongly opposed by the charity. However, it said that if it did go ahead with the move, the Government must take steps to cushion the impact and smooth the transition for those households affected.

Citizens Advice said a delay in the introduction of the new cap until October 2011, or at the very least only applying it to new claims from April, would ensure that people locked into existing tenancy agreements do not find themselves suddenly trapped with an unaffordable rent, and to give them time to find somewhere else to live.

The charity expressed particular concern about the impact on housing and homelessness in London, where it said housing pressures were already extreme. It warned that the new caps would make 93% of rents in Central London unaffordable for private tenants on housing benefit, and estimated that 18,000 households would be affected, with average shortfalls of £81 a week between housing benefits and rent.

Last year Citizens Advice bureaux in England and Wales dealt with more than 222,000 enquiries relating to housing benefit. The organisation believes housing benefit plays a crucial role in enabling people on low incomes to sustain their housing and said decisions on cuts had been made "without considering the housing implications".

Citizens Advice Chief Executive Gillian Guy said: "We are extremely concerned at the potential impact of the cuts to housing benefit on people's ability to pay their rents and avoid rent arrears and homelessness.

"Tens of thousands of private tenants will find their rent is unaffordable and will therefore need to move at short notice to areas with lower rents as a result of the proposed cuts.

"For many, such a forced move will be highly disruptive and stressful as well as putting additional strain on very limited budgets.

"It will be particularly hard for families, whose options could be limited to moving somewhere smaller with the risk of overcrowding, or moving to a cheaper area further away, breaking vital links with jobs, schools, healthcare and family support.

"Those unable to find affordable alternative accommodation at rents within the new housing benefit limits will be at real risk of homelessness."

Citizens Advice said it was highly unsatisfactory that the decision to make benefit cuts on this scale had been taken without any prior assessment of the possible impact on rent levels, on landlords' willingness to let to claimants, or on the standard of property that will be available within the new housing benefit rates.

It also expressed concern that although the Government acknowledged there would be negative consequences - for example on homelessness, overcrowding, and child poverty - no proposals had been put forward for mitigating these effects.

A Department for Work and Pensions spokesman said: "Our reforms mean that if you need a roof over your head, we will provide it, but they also put people on benefits on an equal footing with working families, rather than in accommodation they could never afford to maintain upon entering into work."

The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, and national charity Citizens Advice. It provides free, independent, confidential, and impartial advice to everyone who asks for it. For more information go to www.citizensadvice.org.uk.