Housing benefit cuts 'high risk'


Iain Duncan Smith said the housing benefit cap will be delayed until January 2012 for existing claimants

Housing benefit cuts are a “high-risk policy” that could price the poor out of private homes and hit jobs and local services, the Government’s welfare watchdog has warned.

In a hard-hitting analysis, the Social Security Advisory Committee (SSAC) also warned that children and the elderly could be pushed back into poverty by the wider slashing of state help.

It questioned whether the reforms are affordable at a time of austerity.

The SSAC’s assessment was published on the day ministers sought to soften criticism of the housing benefit changes by delaying the introduction of a cap on payments for existing claimants.

To pay for that however, Work and Pensions Secretary Iain Duncan Smith brought forward a reduction in housing benefit rates for new claimants by six months.

It was that element of the changes – reducing the level of Local Housing Allowance for people renting in the private sector – that came under particular fire from the SSAC.

“In our view this is a high-risk policy that may have far-reaching adverse consequences affecting not only the ability of people on low incomes to find decent affordable housing, but the workings of local labour markets and public services,” the committee said in its annual report.”

It said there was “much to commend” in the general direction of the coalition Government’s thinking on welfare and welcomed efforts to simplify the system and “make work pay”.

“However… we are concerned that the resources and capacity to deliver major reform may not be available at a time of large cuts in public expenditure.

“We are also concerned that some of the changes announced in the Emergency Budget (the changes to Housing Benefit in particular) and in the Comprehensive Spending Review that are intended to make rapid savings to the social security budget may work against the grain of the proposed reforms and roll back some of gains we have seen in recent years in terms of lower rates of child and pensioner poverty.”

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