The Tory Government’s welfare benefits cuts have affected over 26,000 people in Croydon, losing a total of over £31m in welfare benefits from April 2013 to April 2017, according to a report to the Cabinet on Monday 20 February.
Yet more cuts are due to happen, as George Osborne’s July 2015 budget statement announced £12bn cuts in welfare spending are made between 2016/17 to 2019/20.
Main changes and impacts for 2016/2017
Single people aged under 35 in temporary accommodation will lose a total of £329k.
There are 1,400 tenants in emergency accommodation, of which 695 are now in receipt of Universal Credit (UC). The result has been a reduction in rent collection levels from 91% to 59%.
1,250 of the 14,000+ Council tenants are now in receipt of UC. As a result the rent collection level has dropped from 98%. to 72% for UC claimants, contributing to 38% of overall arrears although it is only 8.92% of our tenants.
Working households claiming universal credit used to receive a work allowance of £222 per month for a couple with children and £263 for a single parent. From April 2016 this was reduced to £192.
From November 1,044 people (599 on Housing Benefit and 445 on Universal Credit) have lost £3,000 because the benefit cap was reduced to £23,000. The average loss for the 599 has been £74.19 per week.
‘162 people are losing more than £100 per week and are facing a significant risk of eviction. 90 of these will require a move to homes outside London and the South East; the remainder will need other interventions to prevent homelessness. 526 households with 1,604 children in Croydon will be affected by the cap.’ (para. 3.4)
The Gateway Service
The Council has set up a number of different support mechanisms working with partners. Between last April and this January the Council’s Gateway service has:
- helped over 5,403 households with range of different financial and housing support
- maximised income for 2062 Croydon residents by £7.8 million by ensuring people are claiming welfare support to its maximum
- prevented homelessness and sustained housing for 1761 households by awarding discretionary payments of £2,132,541
- supported 229 households affected by the Benefit Cap through budgeting, employment, income maximised and sustainable housing options
- supported 1,580 people with personal budgeting
The crisis of rising rents
Rising rents are making the situation more desperate.
- ‘Between 2011 and 2015 rents of one bedroom flats in Croydon rose by 14% and rents of two, three and four bedroom homes rose by 20%. Thus the 13,781 housing benefit claimants of working age renting privately in Croydon will face difficulties in remaining in their homes.’
- ‘Landlords could be less likely to accept housing benefit claimants as new tenants, as the Local Housing Allowance only enables them to afford rents in the bottom 25% of the market, and for one and two bedroom homes even less.’
- ‘The loss of private tenancies is already the fastest rising cause of homelessness.’
- ‘Household sized housing association homes let at ‘affordable rents’ may no longer be affordable to applicants on benefits.’
‘Market rent continues to increase in Croydon at around 3.2% per annum whilst the Local Housing Allowance (LHA) is frozen until 2020. There is increasingly a shortfall in supply at the 30th percentile and Croydon is increasingly unaffordable for procurement of adequate temporary accommodation.’ (Para. 5)
The estimated annual loss of revenue to the Council is £2.8m.
Housing Benefit administration subsidy has been reduced from £3,215,742 in 2013/14 to £1,666,594 in this financial year.
The current UC caseload is predicted to rise from 12,929 in December to 17,238 at the end of March.
- cases with Housing Costs (from 7,757 to 10,342
- cases in Private/HA Accommodation from 5,838 to 7,783; cases in Emergency Accommodation from 643 to 857;
- cases in HRA/Council Accommodation from 1,276 to 1,701
The report outlines the Council’s lobbying to try and reduce the worst effects.
The report can be read here: