Families told ‘get real’ on big housing claims - City Hall welcome George Osborne's plan to cut benefits

Published: 02 July 2010
by JAMIE WELHAM

GEORGE Osborne’s housing benefit caps will lead to “homelessness on a massive scale” and turn Westminster into a ghetto for the rich, opposition leaders have warned.

More than 5,000 families face having to find hundreds of pounds extra each week to pay expensive central London rents or move out of the borough after the chancellor announced the maximum weekly claim would be set at £400. 

In the past up to £2,000 was made available.

MP Karen Buck and Paul Dimoldenberg, the leader of the Labour party in Westminster, say the cuts pose a threat to the borough’s social mix.

City Hall has welcomed the reforms, insisting the old system created a dependency culture and families must be “realistic” about living in the heart of London.

Figures uncovered by Labour councillors reveal the weekly £290 cap for a two-bedroom property would price out 1,458 families – 87 per cent of current claimants – receiving equivalent market level housing rates.

For a three-bedroom property, the £340 limit means 656 families – 95 per cent of total claimants – would need to pay extra.

Westminster North MP Ms Buck, who was this week chosen to head up former London mayor Ken Livingstone’s campaign against the cuts across London, said: “These measures would lead to social cleansing on a huge scale, forcing people out of their homes to other parts of London, transforming communities for the worse and creating massive social dislocation.

“It is as if (former City Hall leader) Shirley Porter had been put in charge of housing policy for the whole country.”

Councillor Dimoldenberg said: “This could lead to homelessness on a massive scale, putting families out on the street or pushing them further into poverty.

“Thousands of poorer families could be forced out of Westminster.

“We are calling on the council to make urgent representations to their friends in the government to think again on this cut which could lead to huge social damage to longstanding Westminster families living on low incomes.”

The council says benefits rules have led to families “playing the system” rather than looking to move or for work. 

Ten years ago, in 2000, finance bosses paid £106million in housing benefit – a figure on track to hit £240m this year.

Councillor Philippa Roe, cabinet member for housing, said: “We have no issue with families who have been claiming these high levels of benefit as it’s the system itself that is at fault. 

“We currently have around 80 families who are claiming more than £1,000 in housing benefit, a level that is way beyond the vast majority of working households in the UK.

“When the new lower housing benefit rate is in place we believe that rents will automatically fall as landlords will not be able to charge such high sums. 

“Large families have to be realistic about living in the heart of the capital and may need to be housed outside of the borough.”

Of more than 5,000 affordable homes housing experts say are needed in Westminster, just 200 have been delivered over the past three years.

The new housing benefit limits are due to come into effect in April 2011.