The OBC will directly create MORE £100kpa HB families you breeding idiot!

On Wednesday afternoon I posted my last blog about Cameron citing the families getting £100k per year in Housing Benefit and how he churned this out at PMQs.  Today, (Thursday evening) I have a road to Damascus moment.  Joe you numpty why did you not spot the bleeding obvious!!

The Overall Benefit Cap will create MORE families getting £100k per annum in HB!!

Yes the Coalition is that bloody stupid and Cameron is going to deeply regret using the £100k per annum HB family as his own governments policy – our old friend the Overall Benefit Cap – will see more than the 5 families getting £100k per year in HB that at most existed before the LHA cap was introduced last year to cap HB at £400pw.

My post about Cameron at PMQs began: –

“I note today that Cameron at PMQs states that Housing Benefit claimants get £100,000 per year in HB which he used for justification of his coalition’s many ‘welfare reforms’ and to vilify and blame all welfare benefit recipients as scroungers.

Full Fact did a freedom of information (FOI) request to get the actual figures which they published here and this revealed at most that 5 families got this amount in 2010. Note well I used the past tense and ‘got’ and deliberately didn’t use ‘get’ as now there are no families getting more than £20,800 per year or £400 per week in HB as the LHA caps prevented this. So why is Cameron using this?”

My emphasis above is the bloody obvious mistake I failed to see and only dawned on me when I read an article in Inside Housing about the 1% benefit uprating and how junior minister Esther McVey had admitted child poverty would increase because of this.  A comment below the article reveals the bloody obvious.  It said:

“I despair, having just returned from visiting a tenant with 11 children, all sporting designer clothes and trainers, playing with gadgets I can only dream of buying my own kids.”

I have written much about how the OBC has a fundamental and a systemic flaw.  The systemic flaw is that as rents rise faster than the cap or welfare benefits then more and more families will get caught by the cap each year.  Yet here the bloody obvious is the fundamental flaw  – that the OBC penalises large families….and especially the real large families.

A family will 11 children is unusual and as a quick approximation such a family will lose about £340pw in welfare benefits and not get a penny in HB or LHA towards rent.  They will be evicted and become homeless and need temporary accommodation.  That TA cost will be over £2k per week or £100k per annum and have to be met by the public purse.

The same situation applies to all 2 parent families with 6 or more children – they will get their welfare benefits reduced and receive not a penny in HB or LHA towards rent. And that applies whether they live in social housing or rent privately.

Last year I read a seminal article in the Guardian about the LHA caps and I have often used this to illustrate what will happen with the OBC.  A 2 parent 4 child family in London rented a PRS 4 bed property at £450 per week.  The LHA cap of £400pw came in and so a £50pw arrears situation happened and the family was evicted.  What happened next is the key.

Fortunately, the family was able to place 2 of the children with grandparents and so the 2 adults and 2 children (one of who was disabled and his mum the carer) were put in TA.  The TA was two rooms in a Premier Inn at £69 per room per night – a total of £966 per week to the public purse.

A family with 6 children may need 3 rooms, a family with 7+ children may well need 4 rooms in a hotel at £70 (and likely more than this); so 4 rooms at a cost of say £75 per room per night is £2100 per week or £109k per year.

Anyone who doesn’t think the B&B hotel owners don’t have local authorities over a barrel with this and will increase rates massively is a resident of cloud cuckoo land.  You know as DWP has tripled the numbers to be affected by the OBC and…er… sorry I was digressing there!

Because every family with 2 parents and 5+ children (ie a large family)have a potential to be made homeless and placed in temporary accommodation because of the OBC then there must be more than 5 families who will be caught by this and therefore cost the HB bill more than £100k per year.

Cameron will not like IDS’s masterplan now will he when he realises his welfare reforms will see MORE families getting £100k per annum of HB as a direct result of the OBC.

Cameron, IDS et all like to talk the talk of the families who breed simply to get more money off the state.  You know the Wayne and Waynettas of this world that, albeit in small numbers, do exist.  Yet these are precisely the families that IDS’s OBC will have to pay £100k per year in housing costs for!!!!!!

IDS is a breeding idiot isn’t he!!!

These same breeding Wayne and Waynettas the Tories and especially IDS love to cite and especially vilify and use as exemplars of the failings of Labour welfare policy are the same ones that will see them paying out £100k per year in public purse housing benefit and at far higher numbers than the (at most) 5 they inherited from Labour!!

You just couldn’t make this up could you?  Cameron’s inept comments at PMQs will be far more than just inept because the above outline detail proves that the coalition’s welfare policies and especially the OBC will DIRECTLY create far more £100k per annum HB cases than they inherited from Labour.

The above overview is not just a deconstruction and demolition of the sanity of the OBC as one welfare policy, it is a demolition of the entire welfare policy political approach the coalition use and have used daily.  How can they cite old Labour failings when their own policies create even more failings?  The above proves their general incompetence and at the highest level with the Bullingdon Boy himself in line for direct flak!

I’ve called IDS a breeding idiot here … anyone got any idea what Cameron will call him after this?

Anyone still think a benefit cap saves money?  No…I didn’t think so!

The real rub, in summary, is that the coalition have deliberately cited past Labour welfare failings as evidence for reform.  Now we find that the Tories are even more incompetent on this Tory-set strategy and present themselves – again by their own PM set strategy – as even more incompetent!!

How did we all miss the bloody obvious? Bet ‘Call Me Dave’ wishes we had!!

MAJOR UPDATE 9 February 2013

I didn’t expect this to be proved so quickly as it has.  This week BBC London ran a piece on Westminster City Council and how it is paying…wait for it…

£12,768 per month to keep ONE homeless family in temporary accommodation.

Yes that’s £12,768 per month and a yearly figure of £153,216! 

It also included other families who’s cost in HB was £700 per NIGHT (that equates to £255k per year) and other homeless families at a public purse cost of £3000 per week (£156k per year) in temporary homeless costs paid in HB

So much for the 5 (yes that’s FIVE) families the public purse was paying out in excess of £100k per year that IDS and Cameron use to justify their reforms to housing benefit which they have done with the crude LHA cap already and about to do with the equally crude overall benefit cap (OBC) of £500pw.

The coalition policy ‘reform’ and alleged ‘cut’ or ‘cap’ has seen just 1 council alone spend £100k+ in HB on more than the rest of the country did under the old system…you know the one the Tories ‘inherited from the last lot!’

Above I say:

Last year I read a seminal article in the Guardian about the LHA caps and I have often used this to illustrate what will happen with the OBC.  A 2 parent 4 child family in London rented a PRS 4 bed property at £450 per week.  The LHA cap of £400pw came in and so a £50pw arrears situation happened and the family was evicted.  What happened next is the key.

Fortunately, the family was able to place 2 of the children with grandparents and so the 2 adults and 2 children (one of who was disabled and his mum the carer) were put in TA.  The TA was two rooms in a Premier Inn at £69 per room per night – a total of £966 per week to the public purse

I used this example from April 2012 quite a lot last year in literally dozens of posts I made about the overall benefit cap (OBC) due to begin this year.  My simple point was the LHA caps which limited HB to £250 to £400pw for 1 to 4 bedrooms in the private sector creates massive increased homelessness and homeless cost to the state AND CRITICALLY it should be viewed as a taste of what is to come with the OBC this year.

It is these LHA caps that are incredibly crude that has caused the Westminster City Council examples to happen above.  The LHA cap is why the families cited in the BBC London piece have gone from costing the state £700 per week in LHA to costing them £700 per night – a SEVEN-FOLD increase.

The LHA ‘cap’ just as with the soon to be introduced OBC ‘cap’ may seem on the surface that they save money, but the reality is they cost so much more money to the state, the public purse and to the taxpayer.  The policies are superficial and frankly bullshit in monetary terms and achieve the exact opposite of what they set out and INCREASE WELFARE SPENDING.

Note I am not ignoring the huge negative social and health and educative cost to the ‘homeless families’ here, and it is huge; rather I am keeping the argument about money which was and is the political rationale for them from the coalition.

A fundamental point is that when the OBC hits in the summer of 2103 with its national roll out we will see 170,000 families affected and that massively increases the number of ‘homeless families’ (which more correctly is families who happen to become homeless and ‘homeless families’ has a negative connotation and simply blames and stigmatises them!) across the country.

A further fundamental point is this is not a London-only phenomena and nor is it only applicable to large families as it will hit couples with 3 children right across the private rented sector who will become the new and additional ‘homeless families.’

In terms of putting a cost to the public purse of the OBC we can only estimate crudely yet it will be a significant additional cost.  The average 3 bed private rented property has a rent of £180 per week or so yet the average ‘homeless family’ cost is closer to £500 per week or about a £300pw additional cost to the HB budget.  If as I have estimated the OBC will make 100,000 new additional ‘homeless families’ in its first year than that it 100,000 x £300pw or a £30 MILLION per week additional cost.

In yearly figures the OBC is £1.57 BILLION more in housing benefit public purse costs.

If ‘only’ 20,000 new additional ‘homeless families’ are created by the OBC this is £313m more! So if I have over-estimated this by 5 times, which I havent, then it still costs more than the £270m it claims to save!

That however is just in the first year.  The systemic flaw in the OBC which sees rents rise much faster than the cap figure means each year more and more are caught by the OBC cap which means the public purse HB cost goes up more and more every year!

To the 20,000 new readers of my blog I have had in the past three weeks when I have been writing about the bedroom tax, you will see why for the past year I have been concentrating on writing about the overall benefit cap.  It is far worse than the bedroom tax and viewd simply we can reduce this to a simple statement

The bedroom tax may create homeless families, the OBC WILL DEFINITELY create homeless families!

The average bedroom tax cut is £14.66 per family per week.  The average overall benefit cap cut is £93 per week!

In summary crude caps which on the surface seem sensible and appear they will cut welfare spending achieve the direct opposite.  Whether you are a rabid right-wing conservative or a rabid left-wing communist or anarcho-syndicalist or hold any political views inbetween these two extremes doesn’t matter.  This is not a political issue it is an economic one which argues correctly and in critical detail that the cuts and caps will massively increase the welfare benefit spend.

The government is lying to you when it says these ‘welfare reform’ policies will cut welfare spending and just as the public is now seeing through the bedroom tax bull and bluster that it will reduce spending when it increases cost to the state, the overall benefit cap makes the added costs of the bedroom tax pale into insignificance.  The fact that it send hundreds of thousands of children into poverty, into squalid and unsuitable accommodation which will hamper the children’s life chances, their health, their educational attainment, their social skills and so much more is a point that needs to be made and is political but also correct.  The fact this will ultimately damage the economy in later years too should not be missed.


The BBC London report is here and worth watching

If you want to read what I have said about the overall benefit cap see here, here, here, and so many other places on my blog


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