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date: 3 August 2010

embargo: 00.01hrs Thursday 5 August 2010

More than 900,000 families set to lose £12 a week in housing benefit

TUC analysis of June's Emergency Budget published today (Thursday) reveals that 936,960 households across the UK will each lose around £12 a week (£624 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 regionally, the largest cuts will be in London where 159,370 families will see their HB cut by £22 a week, adding up to a loss of £1,144 a year.

Another 123,000 households in the South East will lose £12 a week (£624 a year), while 58,680 families in the East Midlands, 70,970 families in the East of England, 130,900 families in the North West and 83,180 families in the South West will lose £10 a week (£520 a year).

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.

TUC General Secretary Brendan Barber said: 'This cut in housing benefit will make a real difference to some of our poorest and most vulnerable families, and will affect nearly one million households.

'Families in London will find themselves out of pocket to the tune of £1,144 a year, and households all over the UK will be left much worse off.

'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.'

NOTES TO EDITORS:

- Number of households losing HB (by region or nation)

- 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

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Contacts:

Media enquiries:
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk
Elly Gibson T: 020 7467 1337 M: 07900 910624 E: egibson@tuc.org.uk

Press release (1,000 words) issued 5 Aug 2010