The overall benefit cap (OBC) is the Coalition’s big idea to limit benefit expenditure and comes into force in April 2013. It has set an OBC of £350pw for single persons and £500pw for families. Yet the Coalition have known since July 2011 when it was announced that it will actually cost more. That is more to the taxpayer, more to the public purse and simply means it wont work and wont achieve the aim of reducing benefit expenditure.
IT WILL COST MORE SO WHAT IS THE POINT?
What you don’t believe it will cost more? How can it? Don’t take my word for it. No you can’t do that can you? How about the word of the government? Below is an extract from a letter sent by Cabinet Minister Eric Pickle’s private secretary to the private secretary of David Cameron back in July 2011 about the overall benefit cap.
“Firstly we are concerned that the savings from this measure, currently estimated at £270m savings p.a from 2014-2015 does not take account of the additional costs to local authorities (through homelessness and temporary accommodation). In fact we think it is likely that the policy as it stands will generate a net cost. In addition Local Authorities will have to calculate and administer reduced Housing Benefit to keep within the cap and this will mean both demands on resource and difficult handling locally.”
I have highlighted “In fact we think it is likely that the policy as it stands will generate a net cost”
Use any interpretation of that sentence you choose but it means two simple things:
- THE OVERALL BENEFIT CAP WILL COST MORE!
- THE OVERALL BENEFIT CAP WILL NOT SAVE MONEY!
I make no apologies for stating the obvious or for using capital letters. The simple basic point is that the overall benefit cap will not save the public purse any money at all and it will cost the taxpayer more. So the question becomes what is the point of enacting the OBC?
What the hell is the point? The policy is not a ‘Ronseal’ one is it? It doesn’t do what it says on the tin (or should that be rightly it doesn’t do what it says on the spin?)
Because it will cost more and because it also won’t save a penny to the public purse you can raise very pertinent political questions such as… Why has the Coalition gone ahead with it knowing it wont save a penny? You can ask very pertinent questions about the economic competence of the Coalition. You can look at the impacts it will have such as tenants will get their HB cut and wont be able to afford the rent and so be evicted. Social landlords will get less money and some may may go bust. Private landlords will see this as a risk too far and not accommodate anyone on benefits…and so many more issues such as it could have the consequence of moving 500,000 people away from their homes, locales and support and family networks. It has some scandalous and outrageous social implications for those unfortunate to be out of work and on benefits.
Yet, it comes back to the simple basic question. Why the hell is this policy going ahead when it will cost more money?
- The government loses.
- The tenant loses.
- The landlord loses.
- It has disastrous social consequences.
- Is there any point in a policy when nobody benefits?
The reader with a fanatical left-wing political bias will be (rightly) appalled at the consequences. The reader with a fanatical right-wing political bias will be (rightly) appalled it will cost more. All others inbetween will be (rightly) appalled it costs more and the social consequences.
I ask again – just what the hell is the point?
No doubt as the time draws nearer to the OBC going live we will see plenty of articles from the ‘left’ about the social consequences and from the ‘right’ about responsibility and morality – the ‘this will prevent feckless workshy benefit scroungers from simply having another baby to get more benefit’ – type of stories certain sections of the media like to write about and the local know-it-all in the pub or on the bus likes to state.
BUT when they appear as they inevitably will ask a simple question…What’s the point of the benefit cap if it costs more? That will save a lot of heated arguments and people being branded ‘left-wing’ or ‘right-wing.’
Whats the point of this blog? So you see the real point which is what IS the point?