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date: Thursday 5 August 2010

embargo: to 00.01hrs

More than 83,000 families in the South West set lose £10 a week in housing benefit

TUC analysis of June's Emergency Budget published today (Thursday) reveals that 83,180 households in the South West will each lose around £10 a week (£520 a year) as a result of changes to housing benefit (HB) announced in the Budget.

Cuts to the local housing allowance will hit almost everyone in private rented housing on the benefit, says the TUC.

The analysis of figures from the Department for Work and Pensions (DWP) reveals that Cornwall will suffer the worst with more than 11,000 families affected. It is followed by Bournemouth, Torbay, Plymouth, Wiltshire, Poole, Bristol, North Somerset, Swindon and South Gloucestershire (full details in Notes to Editors).

Nationally 936,960 households across the UK will each lose around £12 a week with London faring the worst.

The proposed cuts, due to come into force in April 2011, include:

the restriction of the bedroom entitlement to four bedroom rates;

capping the amount that can be claimed under local housing allowance (LHA) at between £250 and £400 a week (depending on property size); and

removing a £15 a week excess payment for tenants who find a good deal on rents.

From October 2011, LHA rents will also be calculated on the 30th percentile of private sector rents rather than the median.

Nigel Costley, the South West TUC's Regional Secretary, said: 'This cut in housing benefit will make a real difference to some of our poorest and most vulnerable families, and will affect tens of thousands of households across the South West.

'Families in rural areas as well as our towns and cities will all find themselves out of pocket to the tune of hundreds of pounds a year. This is at a time when the South West is already bearing the brunt of this government's austerity measures.

'The Chancellor promised 'not to hide any hard choices from the British people or bury them in the small print of the Budget documents', but this is another reminder that we are very definitely not all in this together.
'While the rich have been let off, families are being left to pick up the cost of the recession.'

Recently the National Housing Federation warned that 15,000 people in the South West could be at risk of homelessness because of the cuts to housing benefit.

NOTES TO EDITORS:
Number of households losing HB (by region or nation)

Ten worst affected Local Authorities in the South West

- This analysis is based on the recently published Government document Impacts of Housing Benefit proposals: Changes to the Local Housing Allowance to be introduced in 2011-12, available to download from the DWP website: http://www.dwp.gov.uk/docs/impacts-of-hb-proposals.pdf
- This analysis considers the number of claimants in receipt of HB in March 2010 as its base. The analysis only includes some of the changes that were announced by the Chancellor in the June Budget. These are: the restriction of the bedroom entitlement to the four bedroom rates, from April 2011; the capping of HA rates for the shared room, one bedroom, two bedroom, three bedroom and four bedroom rates at £250, £250, £290, £340 and £400 per week respectively, from April 2011; setting LHA rates at the 30th percentile of private rented sector rents, from October 2011; and removal of the £15 excess, from April 2011.

- In his June Budget, the Chancellor outlined further changes to HB regulations. These were: the uprating of deductions for non-dependents, reversing the previous freeze in these rates, from April 2011; the uprating of LHA in line with CPI from 2013-14; the reduction of housing entitlements for working age people in the social sector to reflect family size from April 2013; and reducing HB awards to 90 per cent of the after 12 months for claimants receiving jobseeker's allowance (JSA) from April 2013. In addition, it was announced that HB claimants with a disability and a non-resident carer would be entitled to funding for an extra bedroom. Modelling on the financial impacts of these changes has not yet been published by the DWP although the latter change is included in the DWP's Equalities Impact Assessment.

- The Treasury analysis of the child poverty impacts of the June Budget only includes two-thirds of the benefit and tax credit changes that the Budget outlined, and does not consider the distributional impact of service cuts. Benefit and tax credit changes that are excluded from the Budget's analysis include HB cuts, cuts in disability living allowance (DLA), cuts to grants for mothers (the Sure Start maternity grant and the health in pregnancy grant) and the requirement that lone parents with children aged five or over start to claim JSA. The full list of changes included in the Budget analysis is available to download here: http://www.hm-treasury.gov.uk/d/junebudget_data_sources.pdf

- The Government's Equalities Impact Assessment of HB changes due to be introduced in 2011 can be downloaded from here: http://www.dwp.gov.uk/docs/lha-and-carers-eia.pdf

- The National Housing Federation press release with its warning about homelessness can be found here: http://www.housing.org.uk/default.aspx?tabid=260&mid=925&ctl=Details&ArticleID=3080

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Press release (1,100 words) issued 5 Aug 2010