Benefit Cap – 197,691 households with 653,566 Children OUTSIDE of London alone

The £20,000 benefit cap will hit 66,742 SRS households and 130,949 PRS households in the regions alone. A total of 197,691 households in total with 653,566 children OUTSIDE of London.

My detailed figures show an average social tenant shortfall of £75.73 per week which is £3,941 per year with the £20,000 cap figure. That’s 5 times the average bedroom tax.

The DWP the Guardian reports say just 126,000 households will be hit containing 330,000 children in the whole of Great Britain. Below I explain why that is bullshit so let’s go on with it and I have tried to make the figures as easily understandable as possible.

Note well – This is just in the regions and you need to add London figures on top of these

obc regions

The details

Here is a table showing the national picture of working age housing benefit claimants that comes directly from the official housing benefit statistics published by the DWP

obc-workingage

The latest housing benefit official figures released in May 2015 and detailing the position at February 2015 reveal that there are 4,884,965 claimants in Great Britain of which 826,597 are in London. (See tab 2 in the figures)

  1. Hence 83.08% of housing benefit claimants are NOT in London and subject to the benefit cap at £20,000 per year and 16.92% of GB housing benefit claimants are in London and subject to the £23,000 cap.
  2. We also know from the same official HB statistics that there are 1,190,566 households with dependant children headed by a lone parent (66.94%) and 587,893 households with dependant children headed by two parents or 33.06% (see tab 9 here

From the 2 bullet points above we can then create a new table which firstly reduces the total working-age numbers in Table 1 to 83.08% which gives the numbers of working age HB households in the regions;  and secondly we then adapt the figures to split up the 3 child household into lone parent and dual parent.

OBC-REGIONS B4 EXEMPTIONS

The above table also shows the maximum housing benefit each household type will receive based on a 3 bed social rent of £98 per week and a 3 bed private rent based on £150.00 per week.

We then see (in red type in columns 3 and 4) that the 75,199 number of 2 Parent 3 Child households in the regions and of working age sees:

  • 50338 in social housing who will have a weekly HB shortfall of £47.32 per week (Column 7)
  • 24861 in private housing who have a weekly LHA shortfall of £99.32 (Column 7)

Continuing on that row we see the 75,199 2P3C households will have 225,597 children in them which is [75,199 x 3]

The table also shows in the final row entitled “TOTALS” that potentially and in theory 130,867 social households will be affected and 165,758 private households affected – a total of 296,625 households that contain 998,377 children……..UNLESS they are exempt through the receipt of certain welfare benefits or receipt of working tax credit.

Remember that these 296,625 households are all of working age and this is just in the regions and excludes London and 998,377 children who will be hit by the benefit cap reduction

 

So how many will be exempt?

The Family Resource Survey published last month tells us at table 2.11 what percentage of social tenants and private tenants receive the exempting benefits (DLA / PIP, ESA, etc) and also what percentage of social and private tenants receive Working Tax Credit.

Noting that these figures are for all tenants and not just those of working age the FRS says:

obc-frs

As you can see I have been extremely generous with those exempt and overestimated the numbers exempt at 49% in the SRS and 21% exempt in the PRS

Yet this means that 51% of the SRS households are not exempt and 79% of the PRS households are not exempt from the reduced benefit cap.

That means the £20,000 benefit cap will hit 66,742 SRS households and 130,949 PRS households in the regions alone. A total of 197,691 households in total with 653,566 children OUTSIDE of London

On top of this are the figures for London which I will spare the reader who is most likely number-fatigued by this stage.

If anyone wishes to tell me why my figures are wrong then please do so and I hope to God I am wrong but I know I am not.  I have tried to keep the numbers above as simple as possible so lazy journalists and incompetent and spineless Members of Parliament can see what the impact of the reduced benefit cap to £20,000 per year will do outside of London in the 83% of Great Britain that journalists and MPs invariably overlook in their London-centric myopia.

I have ranted and rightly at Frank Field the Labour MP who is the Chair of the Work & Pensions committee which is the main scrutiny of DWP policies and he has disgracefully and ignorantly said he is really happy with the cap.

For the avoidance of any doubt my anger here is against the lack of scrutiny and lack of democratic oversight by those who should and need to look at fact and not be enamoured with austerity economics and bluntly shit-scared of appearing to be ‘pro-welfare’ for fear of being ridiculed.

That anger is not political bias although it is political and the politics of the human being who can easily see over 800,000 children made homeless and have their life chances irreparably damaged.  The policy is morally reprehensible and bloody offensive.

I am angry because those who could and should scrutinise this such as Labour who are Her Majesty’s Official Opposition are not opposing it and the last thing I want to say in a years time is I told you so.  I would much rather this policy was revealed for what its impact will be which in moral terms is truly offensive.

Last week I spoke on this subject at a public meeting and what resonated more was not the moral repugnance or indeed the huge added cost of a minimum £9 million per year to Wirral Council in Merseyside – it was the consequence of that namely – what £9 million of other services will the council have to cut to pay these additional and inescapable homeless costs?

Wirral Council will have a minimum £9 million added cost so need to cut £9 million from other services. So how many libraries will close?  How many public swimming baths ill close?  Will the once weekly bin collection now move to fortnightly?  Will meals on wheels service be lost and so on.  And how much will council tax have to increase to pay for this too.

It was these arguments which really resonated with the public audience and my home city of Liverpool with double the number of HB recipients will have at least an additional £15 million per year added cost so what services will be cut there?

This is what the benefit cap to £20,000 or £384 per week means…

YET

Today sees the front page of the Guardian swallowing hook line and sinker the DWP’s estimate of just 126k households with 330,000 children affected.  That is lazy lazy lazy journalism and offensive and damaging lazy journalism.

The Guardian state the DWP has conducted an impact assessment and they have not conducted one.  The Guardian then quotes the CAB estimate done ahead of the budget yet fails to mention this was based on a £23,000 cap not the much lower and now reality cap figure of £20,000.  Both of these point are incredibly shoddy journalism before we even get to anything approaching even superficial investigative journalism.

The CAB said for a much higher £23k cap that :

● An estimated 150,000 adults and 395,000 children will be affected by the
£23,000 cap, including those who are already capped at £26,000.

So this is much higher alone than the 126k and 330k children or the bullshit line with no substantiation figure the DWP is peddling.  And even if I am wrong then 126k households and 330k children totals 500,000 men women and children made homeless or a city larger than Liverpool all being made homeless!

The CAB data was also wrong and frankly a poor analysis as we can see from the main example they used

cab cap obc

The first to corrections are explainable by the cap figure being £20,000 not £23,000 (with a few small changes as the actual figures they used are incorrect albeit marginally)  yet nothing explains the ignorance of the fact that a lone parent with 3 children of which two are under school age would only qualify for the 3 bed rate of LHA and not the 4 bed rate as this bizarre example chooses to use.  This hardly inspires confidence in the rest of the report.

Yesterday some House of Commons papers were released  – that the Guardian incredulously calls an impact assessment! – which talked around the benefit cap issue and as to the numbers which quoted the 3 social landlord examples I used here and which gives a much higher figure than my 245,000 best estimate of households containing 800,000 children of yesterday.

I have hugely simplified the complex analyses I have undertaken as to the numbers affected above in order to explain why my figures are not scaremongering or hyperbole and why the DWP figures are a joke number to deliberately conceal the true number and for which over eager journalists who should know better have jumped into that trap with two feet.

The Guardian should correct its offensive article of today in repeating the DWP known lies and lobby for the DWP to produce a full impact assessment as I did in my post here as this policy cannot be allowed to proceed unchecked

Some finer nuanced points

The Private Landlord when they realise the full impact of the benefit cap reduction will issue Section 21 Notices to get rid of the financially toxic tenants they have.  These two months notice will be issued in January 2016 as they can take 3 months and so the private landlord will evict BEFORE the reduced caps come online in April 2016.

Yet expect the DWP to not count these figures into any correlation between the reduced cap and the massively increased homeless numbers claiming they happened BEFORE the cap was reduced!

As the majority of households to be evicted will be PRS ones local councils should expect a huge increase in homeless family presentations from January 2016 and they will need to be ready and have enough temporary homeless provision from that date and not from April 2016.

My figures of 130k PRS eviction out of a total 197k in the regions is 66% of benefit cap evictions being in the PRS yet today’s benefit capped households are 54% PRS and 46% SRS so that is a significant change as nobody doubts the PRS will evict.

Councils are not under any illusions that the PRS landlord will not evict yet few if any realise that a far greater number of evictions are assured given the rise from 54% to 66% in the PRS capped households.  Many LAs I have spoken with say social landlords will not evict and they are under huge illusion in thinking that way.

My detailed figures show an average social tenant shortfall of £75.73 per week which is £3,941 per year with the £20,000 cap figure.  There is no way ANY social tenant can afford that and social landlords will be evicting in their droves as they have no alternative.

Many social landlord in the North have an average eviction cost based on £3,000 plus the arrears amount.  The £3,000 being court costs, void loss, refit costs and any other costs besides the actual rent arrears.

I strongly suspect that social landlords will be using Ground 8 arrears evictions to evict the benefit capped social tenant household as this will see a total cost of £4,000 all found with a 10 week rent arrears figure.  That will be seen and in fact is good business practice despite Ground 8 being anathema.

Social landlords will simply pass on the financial risk to local councils and let them deal with such problem cases and especially in the 5 council areas of Merseyside which have no council housing.

This will leave the average housing association evicting just under 3% of all tenants which they can easily replace with self-paying tenants and they can and will charge out the properties at the AR model and so recoup the eviction cost within two years on average.

The same social landlords who now have 64% of tenants claiming housing benefit as a national average will then have 61% – 62% of tenants on higher risk housing benefit and still state they house the ‘vulnerable’ and of course they will have an ever-increasing rent roll to boot.

It makes absolute perfect business sense for social landlords to use Ground 8 and then re-let at affordable (sic) rent levels so any local council officer or local councillor who thinks social landlords will not evict the benefit capped household is seriously mistaken.

 

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