The £20k Benefit Cap to cost £41k in Liverpool – You what?!

Projecting the impacts and consequences of ‘welfare’ changes is notoriously difficult and always has been and always will be too.

Central government produces alleged impact assessments for any such change and they are, have been and always will be, inept.  670,000 will be affected by the bedroom tax became a 524,000 reality in the first figures and 22% lower than projected. It is now a further 10% lower.

The pre 1996 numbers of households affected – those who had the bedroom tax wrongly imposed for the first 11 months due a government cock-up – the DWP said would be 4,000 (between 3 and 5,000 to quote Freud and IDS) and it transpired they were in excess of 40,000 or ten times more  … and a figure I was ridiculed for in projecting and called dystopian and a scaremonger and similar.

Regrettably any such projections or estimates are notoriously difficult in which to be accurate although my record on housing benefit impacts such as the pre 1996 and the much easier and more general homeless diaspora the LHA version of HB would create are better than most and far far better than the DWP views of them.

Housing Benefit and its claimed reforms, the bedroom tax, benefit cap, LHA cap, SAR cap, LHA maxima cap and so on are very specifically and correctly housing benefit changes not the vague misnomer they invariably are labelled in ‘welfare reforms’ as they are all changes to the operation of the social security benefit called Housing Benefit in both its social tenant version of HB and its private tenant variant called LHA

My detailed work in and research of Housing Benefit over more than 20 years stand me in good stead when it comes to predicting what such Housing Benefit changes are likely to mean.  That goes for likely numbers of households affected and further by the likely impacts they give such as homelessness impact, increased arrears and so on.

When it comes to the Overall Benefit Cap the complexity of the issues and number of variables involved makes projecting the numbers involved and the impacts much more difficult to be accurate.  The latest government so-called impact assessment says between 88,000 and 107,000 households will be affected … if they do not change their ways!  A scurrilous way of describing children paying for the sins of their parent(s) which is what this OBC policy is in all reality.

This is known as nudge theory or behavioural change theory …incentivising those ‘miscreants’ who happen to receive ‘welfare’ in the pejorative political and ideological view of government to change their ways.  The bedroom tax nudges are to downsize, take in a lodger etc and well known and ALL of them only see the nudge considered in a one-dimensional way in the response of the claimant but NOT any other actors involved such as landlords.

Government consideration of their ideologically driven policies sees such policies considered in a vacuum when it comes to alleged impact assessment aka its a good idea to know what the policy change will do before you implement!

We know that for example social landlords chose to respond to the bedroom tax by tightening its allocation policies as to knowingly underoccupy a property for any benefit tenant meant an increased financial risk of arrears, and that is what happened.  It is a simple example of a landlord or other actor response and a classic example of how government’s claimed impact assessments are one-dimensional in only considering the likely claimant response.

We have also seen Severn Vale Housing Association ban all under 36 year olds as formal policy in response to the imposition of the shared accommodation rate or SAR to social tenants.  This again is both a landlord and other actor nudge and a response that the impact assessment makes no mention of or considers.

Let’s return to the OBC – the 23% and £6,000 per year reduction of the maximum ‘welfare’ any household can receive that will begin on 7 November in the 87% of the UK rented housing that is not in London – London will have a 11.5% and £3,000 per year cut in this maximum amount.

The OBC impact assessment fails to consider the landlord response and only considers the tenant Housing Benefit claimant response – and even then in very broad brush and superficial terms as it makes no assessment of the fact that the current higher OBC capped households has more claimants of the disability benefit ESA than it does of JSA.

ESA used to be called Incapacity Benefit a name that is more self-explanatory than Employment and Support Allowance (Work-Related Activities Group) or ESA wrag cohort that makes up 15.5% of all those currently capped.

These are households who have an ‘incapacity’ and who could work in up to two years time IF they are given additional support.  The same households however have to work immediately to escape the OBC being applied yet clearly cannot do due to the incapacities they have.

Such households are more accurately described as unable to work yet the government in its narrative simply calls them workless and along with those who are unemployed and those who are not expected to work.  Those not expected to work are lone parents with children of pre-school age and who make up over 60% of those currently hit by the existing OBC.

In very short, the Overall Benefit Cap actively and directly targets the benefit tenant households with the most children.  The more children you have the more likely to be capped (children outrageously paying for the ‘sins’ of the parents) and have their Housing Benefit cut as the system works by only cutting Housing Benefit and not the JSA or ESA or IS or Child Benefit or Child Tax Credits – just the Housing Benefit. Children pay for these ‘sins’ even when the parents are unable to or not expected to work!

Aside from that explaining why the OBC is a Housing Benefit change and not a ‘welfare reform’ it also means the impacts will be much more severe as this threatens the households ability to keep a roof over their heads due to the arrears build-up and eviction.

This is especially so given my estimate of the average amount of housing benefit that is cut at £75.73 per week that simply cannot be made up by finding from other subsistence level ‘welfare’ and will inevitably see a huge surge in evictions for arrears.

The government impact assessment (ahem!) takes no account of the response any landlord social or private will take to these cuts of housing benefit.  No account of the fact that social tenants now can’t afford the average £15.29 per week bedroom tax HB cut so they do not have a hope in hell’s chance of being able to find 5 times this amount in the average £75.73 per week OBC cut to housing benefit!

Social landlords will have no choice but to evict the newly benefit-capped households as each one will have an average £3,950 per year shortfall in their housing benefit which is the average £75.73 per week cut expressed yearly.

I make no comment here as to whether social landlords should or should not evict to be clear, I am merely saying it is inevitable that they will have to evict … and those they do evict will be households with the most children and all of these households will have to be picked up and rehoused by local councils given their mandated homelessness duties.

In an otherwise woeful analysis and news release from Liverpool City Council on 30 September y home council said each homeless family will cost local council budgets an estimated £400 per week or £21,000 per year just in temporary homeless housing cost … and those families will still be able to receive up to £20,000 per year in other welfare meaning they cost the taxpayer (in Liverpool) up to £41,000 per year per family.  A much higher cost elsewhere too

Yes the £20,000 per year household cap creates a £41,000 per year household benefit cost and you have read that correctly!!

All caps do is increase the welfare bill more in other areas and explains why the overall HB bill has increased by over £1 billion per year and in real terms since the four principal HB changes of bedroom tax, benefit cap, LHA and SAR cap, were introduced.

That additional £1 billion plus per year cost is the view of the Institute of Fiscal Studies or IFS which they stated in January 2015 and yet nobody believes it as they struggle with the issue of how can a cut and/or cap can lead to an increased overall cost?  The example above is one such way and only way of many ways.

To return to the Liverpool City Council example and this sees a news release issued on 30 September 2016 parroting the official government view that it will affect 840 households each with a £44 per week cut in housing benefit.  Yet the same council gave evidence to parliament which Hansard records on 20 October 2015 and 11 months ago that it would affect 1945 households.

Here is part of what Liverpool gave to the Welfare Reform and Work Bill Committee:


As you can see the numbers in the second column total 1945 and rather a lot higher than the 840 they now claim in their latest estimate issued last week


Yet even if this new 840 figure is correct (and it’s way off) this still sees 2,800 children paying for the sins of their parent(s) and having their life chances irreparably damaged by being evicted and placed in temporary homeless provision with no privacy, nowhere to do homework, probably shared cooking and toilet facilities and often means a change of school losing all their school friends and so on and so forth.  In two in every three cases it will be because their parent(s) have pre-school age children too and thus not expected to work!

Quite how Liverpool City Council expect this to affect 57% fewer households than they claimed it would 11 months go is unexplained in the article and in fact is unexplainable.

840 households out of almost 59,000 housing benefit recipients and an unknown additional number of UC claimants (who don’t appear in the HB data as they don’t claim HB) equates to 1.4% of all housing benefit recipients.  That is much lower than the latest DWP national estimate of 88,000 to 107,000 which equates to 1.83% to 2.21% – and so 1.4% for Liverpool would mean that my hoe city has way less than the national average affected when it has far more households on HB and JSA / IS / ESA than the national average in proportional terms.

Note well that previously the DWP scan said the OBC would hit 120,000 nationally which is 2.6% and prior to that said it would be in a 93,000 – 174,000 range which is 1.94% to 3.63% and so the Liverpool 1.4% figure is out of any form of reality.

It is in short delusional and when we add to that with the fact that Liverpool has 58% of all its social housing stock being the 3 bed or larger properties in which benefit capped households will live, which is 61% above the national average of 36% then the delusion on this figure becomes extremely pronounced.

The 1945 number of affected OBC households LCC informed parliament of 11 months ago was in any case a low figure.  It was in fact the absolute minimum figure and had an associated absolute maximum figure of over 3000 and LCC ‘chiefs’ believed that social landlords would not evict because of it, which is just as great a delusion as they simply have no choice but to evict.

Liverpool City Council’s deluded view as to numbers affected also sees just the increase in housing benefit cut by the reduction equating to its entire DHP budget of just under £2 million per year.  So the existing HB cut of £0.3 million in the benefit cap and £7 million in bedroom tax HB cut means that the DHP scheme cannot cope with this and also means the evictions of thousands of children is sadly inevitable.  It also means that existing DHP for bedroom tax cases will go and see many ore bedroom tax driven evictions too.

The cost to the city’s own budgets for homelessness is going to rocket and it could see a temporary homeless bill alone of way in excess of £25 million more per year and reflecting another aspect and impact of the OBC which is a massive transfer of cost and risk from central government to local government budgets that you be not be surprised to learn appears nowhere in any government impact assessment!

This could mean for a crude example that the council (and every council) has to make bin collections once a fortnight rather than once a week to compensate.

Last year I did a number of presentations on the OBC and I focused on the number of children this policy would make homeless and do irreparable damage to their life chances and to paying for the sins of the parents.  A forceful message of these are children  for fuck sake (though slightly more tactfully stated!)

Yet, regrettably and outrageously, the fact the policy potentially could lead to bin collections going from weekly to fortnightly caused more uproar in the audience!

Think on that people when you see, witness of hear about children being evicted which you will and in droves and by Easter 2017 which is next April we could easily see the current 100,000 children in temporary homeless accommodation become 500,000 or even more.


Liverpool will see 1600 evictions due to the reducing benefit cap and that is a very cautious figure.

Given we have 252 working days per year (52 x 5 less 8 bank holidays) that means over 6 evictions per day on average and every working day too all down to this one policy.

My home city has often made ‘rings of steel’ around attempted evictions by bailiffs and will always do so.  Yet can they do 6 rings of steel every working day of the year to protect children evicted from the alleged sins of their parent(s) in being unable to work and not expected to!!

Coming to every town and city near you people … unless of course you’re a sheep and my rant and raves over this are just dystopian nonsense and the DWP view is not deluded fuckwittery of the highest order.



7 thoughts on “The £20k Benefit Cap to cost £41k in Liverpool – You what?!

  1. No wonder theres no money in the kitty when Liverpool CCG , who commission services to that Mengele Hospital formally known as Alder Hey , managed to let them spend over £40 million in wages and needless operations and procedure costs , let it take thirteen years and at least thirty different ” doctors ” , ” paediatric consultants ” and ” surgeons to diagnose an iron deficiency . The LA were then able to spend a big pile of tax payers money to take the children into care to abuse . The majority of public funds is spent on these fraud doctors , fraud social workers and child abusers . This LA have put more money into paedo and sado science than they have spent on the people of Liverpool or it`s kids . They are a pile of child hating self serving filth and have been sorting themselves and ripping everyone else off for too long . All the money has gone on their fraud jobs and their child grooming and the betrayal of the people of Liverpool .They have let Scousers starve on the streets and have no home and have spent the money on themselves for their fraud SEN education and health scam . Dirty scum . .

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