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Councils fearing housing crisis fuelled by welfare reform

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Councils fearing housing crisis fuelled by welfare reform

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Published by Max Salsbury for 24dash.com in Housing and also in Central Government, Communities

Child poverty Child poverty

London's local authorities fear that the government's welfare reforms are fuelling a housing crisis, a new report has revealed.

Based on interviews with councils, advice services and parents, as well as a review of existing evidence, the Child Poverty Action Group's 'Families on the Brink: Welfare Reform in London' report highlights that these key groups all share the same fear: a housing crisis uprooting families from their homes and communities, with children’s education facing huge disruption.

Almost half of all the households in the country hit by the benefit cap are in London.

High housing costs mean that households in London on average have lost 22% more than the rest of the country, losing almost £7 more per week than households outside of the capital.

And the report reveals that councils and families fear that the situation is set to get worse.

Councils are already reporting a shortage of properties that are affordable to rent on housing benefit.

CPAG is concerned about the impact the cuts will have on child poverty in London - the area with the highest rates of child poverty in the country.

The Institute for Fiscal Studies projects a significant rise in child poverty by 2020, and this is likely to hit London hard.

Issues highlighted in the report are:

• Councils are struggling to find local housing for local families already and believe it is only going to get harder. Sixteen London boroughs already have more households claiming housing benefit than there are affordable properties. Many said that they were seeing a large number of families taking on tenancies above housing benefit caps and were making up the shortfall.
• High childcare costs in London make it harder for work to pay. New analysis in the report shows that a parent with four children working part time and paying average childcare costs in London will be £65 worse off per week than the same families outside of London.
• Financial work incentives alone have not been enough to enable parents to start work. Only 13% of households hit by the benefit cap have entered work.
• Low income families feel that they are no longer welcome in London and fear being forced to move somewhere far away and unknown.
• Families are relying on short term, discretionary payments from councils in stay in their homes.
• There has been 1000% increase in homeless families moved outside London between 2011/12 and 2013/14. Councils are struggling to house homeless families in-borough or even in London and believe that this figure will continue to rise.
• Council run benefits schemes for council tax reduction, discretionary housing payments and the localised social fund create a possible postcode lottery.
• Welfare reform is hitting working and workless families, and families who have previously not been expected to work. This includes lone parents with very young children.
• This research is based on interviews with eight local authorities, five organisations providing advice to families, and focus groups and interviews with 47 parents.

CPAG are calling on central government, the mayor and the Greater London Authority, and councils in London to renew efforts to mitigate negative impacts from the reforms. They are asking for:

• Housing benefit allowances to match rent levels in the capital.
• Funding for childcare to recognise and match London’s costs to make it easier for parents to work.
• Parents who are not expected to work to be made exempt from the benefit cap – currently even breast-feeding mothers are subject to the cap.
• Reinstate funding to protect poorest residents from paying council tax and maintain access to Local Welfare Assistance funding.
• Ongoing monitoring of the effects of welfare reform in London to enable action to be taken to mitigate any negative effects.

Alison Garnham, CPAG chief executive, said: “Councils and families are telling us that a crisis is just around the corner in London. It will cause tremendous disruption to children’s lives for families to have to leave their city, their extended families, schools and support networks. It also risks destroying the mix and diversity London prides itself on.

"Londoners need a housing benefit system where allowances match local rents and we need better quality services for helping parents find work, stay in work and progress onto higher pay. This must include improving the supply of high quality childcare and ensuring families can afford to pay for it.”

Responding to CPAG's report, Barnardo’s director for London, Lynn Gradwell, said: “The shocking finding that benefits cuts have left Londoners struggling to keep a roof over their child’s head, should be a warning to Government to review welfare reform.

“Desperate families, struggling to juggle soaring living costs with the Government’s recent decision not to increase their benefits with inflation, tell us they are being driven to food banks to provide for their children.

“Political parties need to wake up to the looming poverty crisis in London, and take action to tackle in and out-of-work poverty. They can start by restoring the link between benefits and inflation.”

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