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The cost of piloting the benefit cap

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Haringey LBC is one of four London boroughs that from next week will be a pilot for the government’s benefits cap.

The rationale behind the cap is simple: housing benefit has doubled in a decade. At an annual cost of nearly £23bn, it represents more than 10% of the welfare budget.

But £18bn of welfare cuts are being justified by exceptional tabloid cases, when the reality is that millions of ordinary families will lose out.

As leader of Haringey Council, I see many examples of the arbitrary nature of the cap. Those living in private homes where rents are higher are affected, while next-door neighbours in social housing may not be.

In Haringey, around 1,000 local households will be affected. The first 50 will be capped in the very first week of the pilot, 150 in the second week and the remaining households over the following fortnight.

Some families will be almost £400 a week worse off, driving them from their communities or forcing them to downsize into cramped conditions.

We won’t move anyone out of Haringey during the pilot. But covering the initial rent shortfall will cost in the region of £2m to £3m and would run to £7m per year - this is not sustainable in the long-term. When the cap is rolled out nationally, local authorities will face difficult decisions about where to house families.

Officers from our housing, customer services and benefits and local taxation are working together to help residents to prepare for the changes, and we are working closely with the local Citizens Advice Bureau.

We have written to families likely to lose out and are visiting them to talk through their options face-to-face. Staff at our housing support hub are also on hand to support residents and we’ve raised wider awareness through poster campaigns and our residents’ magazine. We’re also working with our partner pilot boroughs and testing IT systems to try to ensure the process runs as smoothly as possible.

But beyond what we do to prepare, the wider debate must address the link between the supply of affordable housing and the rising benefits bill. Rents continue to increase, people cannot afford to get on the housing ladder and the cost of welfare is soaring.

Not enough new affordable housing is being built. Councils are rightly demanding greater freedom to deliver new housing, but it’s vital that this is backed by greater government support so the right mechanisms can be put in place to deliver new homes and address the housing crisis.

Claire Kober (Lab) is leader of Haringey LBC, one of four London boroughs testing the benefits cap from this month

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