December 7 2013 Latest news:
by Flora Drury
Wednesday, October 23, 2013
The first major study into the effects of the benefit cap has revealed just 10 per cent of Haringey residents affected have managed to find work - outlining a series of flaws in the government’s controversial policy.
What is the benefit cap?
The government has “capped” the total amount of welfare benefits any working-age household with children can receive at £500 per week, and at £350 per week for child-free households.
It applies to all working-age households, apart from those entitled to working tax credit, who receive a disability-related benefit, a war widow/widower, anyone in receipt of war disablement pension or anyone recently unemployed (within the past 39 weeks) after a period of 12 months’ continuous employment.
The research - put together by Haringey Council and the Chartered Institute of Housing - reveals just 74 of the 747 households affected by the cap in the borough successfully gained work in the period from April to August, while just 11 increased their working hours sufficiently to avoid the cap.
The aim of the cap was to make sure that no benefit-dependant household would receive more money than the average working household. The policy was also intended to encourage households into at least 16 hours of employment per week and make savings within the benefits budget.
While the research does show evidence to suggest the cap is changing attitudes towards work in Haringey, it lists a number of major barriers which are preventing people finding jobs.
These include a lack of job-seeking skills, as well as the availability and affordability of childcare, or even simply knowing how to access childcare.
The report says the benefits cap is saving Haringey taxpayers £61,374 per week - which equates to just 1.18 per cent of the borough’s overall benefits bill.
But in real terms the council and government are still paying out for many of the households through the discretionary housing payment (DHP) rather than other benefits funding.
This has cost Haringey Council £960,000 to date.
This can be added to the bill for the increase in intensive support for benefit claimants affected by the cap and the “imminent” increase in evictions for those who are now unable to pay their rent.
The findings have led Haringey Council leader Cllr Claire Kober to claim the policy “has failed in its main objectives” to make the benefits system fairer.
Cllr Kober said there was still “a long way to go before anyone could claim the benefit cap is working”.
She said: “This research shows that the benefit cap has failed in its main objectives.
“Only a few households have been able to get back into work and, while the government may be making some savings, the real costs are just being passed to local councils already under enormous financial pressure.”
Chartered Institute of Housing chief executive Grainia Long echoed her words and suggested the government needs to get a grip on the spiralling cost of housing in order for it to get a hold on the benefits bill.
She said: “There have been whispers that the government is considering lowering the cap or increasing the amount of hours people must work to avoid it.
“Unless ministers commit to increasing support for people looking to get back into work and funding for childcare this would be very dangerous.
“Ultimately, the government must do more to tackle the UK’s housing crisis.
“The reason that the housing benefit bill is so high and that so many people are affected by the benefit cap is that we are simply not building enough homes to accommodate our growing population.”
A spokesman for the Department of Work and Pensions said: “This research relies on early and limited data from a single council and completely ignores the fact Jobcentre Plus has helped 16,500 claimants nationally into work who were potentially affected by the benefit cap.
“We do not recognise this report as providing a sound or reliable picture of the reform.
“The benefit cap is helping to return common sense to the welfare system by placing a fair limit of £500 a week on the amount a household on benefits can receive.”