Families hit by benefit caps could spark ‘tidal wave of migration'

The east London borough of Newham was parachuted into the media spotlight last month when it emerged that the council sent more than 1,000 letters to housing organisations across the country, asking them to lease homes to 500 families in exchange for cash.

The authority argued that the government’s new cap on housing benefit had forced its hand, blaming the unmanageable gulf between capped local housing allowance rates and London rents (see box). But while it was Newham that occupied the headlines, the effects of the cap on housing benefits are being felt across the capital and further afield.

Around 2,000 families in the central London borough of Westminster found their private sector rent exceeded the caps when they were introduced in April last year.

Families account for between 90 and 95 per cent of those seeking help from the Westminster-based NextDoor Project, which has been guiding more than 200 affected households through their options since the housing benefit cuts started to take hold.

Options for families
James Goldstone is deputy project manager at the project, which is run by the charity Zacchaeus 2000 Trust. He says the options for families include making up rent shortfalls through applying for discretionary housing payments from the council; plundering their other benefits; uprooting their families by moving somewhere cheaper in London; squeezing their children into a smaller home; or presenting themselves as homeless, which can mean being placed in temporary housing in cheaper east London boroughs such as Barking and Dagenham.

Goldstone adds that families’ priority tends to be to stay local and that overcrowding is an all-too-frequent consequence. “We find that if anybody wants to overcrowd, that is when they kind of drop off the radar,” he says. “They feel like they’re doing something wrong and keep quiet out of fear that social services could get involved. Or they might take large amounts of their child benefit to make up the rent and go hungry.”

Goldstone says there is often resistance from families when they are advised to look for housing beyond Westminster. “We’ve got people from Iraq, Egypt, the Middle East and Algeria and their whole process of getting from that country to here was fairly traumatic,” he says. “They associate moving some-where else with that very painful time in their lives. There’s very much a sense that outside Westminster is unsafe. And they’ve heard that the BNP (British National Party) is fairly popular in places like Barking and Dagenham and fear that being one of several hundred ethnic minority people being moved there could create problems for them.”

Despite this resistance, Barking and Dagenham’s director for housing strategy, Ken Jones, has seen a steady stream of around 100 households, mainly families, into his borough over the past three months, moving into temporary housing secured by inner-London councils. The influx has been sufficient to eat into the supply of temporary accommodation that Jones needs to house the borough’s own homeless families and his department’s use of bed and breakfast accommodation has rocketed – 170 households are accommodated in this way, compared to just 30 this time last year.

Jones warns that this influx can-not be sustained in a borough that already has a severe shortage of school places. He predicts a “tidal wave of migration” of housing benefit claimants out of London, adding that his own borough may have to consider moving families out of the capital. “All of this will have disastrous social consequences,” he warns. “More and more families will be displaced.”

The Newham case suggests that Jones’ fear is fast becoming reality. But the response from some of the recipients of the council’s letters suggest there is likely to be widespread opposition to such proposals.

Gill Brown, chief executive of Stoke-based housing association Brighter Futures, warns: “We have a shortage of primary school places at the moment, so if these families came to Stoke, they would struggle to get their children into local primary schools in certain parts of the city.”

“Our children’s centres are under a great deal of pressure, because of the cuts. And there are no jobs here. People [being transferred here] would actually be condemned to fairly lifelong unemployment and become increasingly dependent on local services.”

And in Cheshire, the same letter sent to Peaks & Plains Housing Trust encountered a speedy route from desk to bin. Tim Pinder, chief executive of the Macclesfield-based housing association, says an extra 500 families from Newham would just “make things worse for everybody”, by increasing the strain on an already limited supply of housing.

“It just seems really crude to uproot people more than 200 miles away to completely unfamiliar places,” he says. “The areas of greatest deprivation here are the very areas where we have our housing stock and where people being relocated would move to. It’s unlikely to help the local situation in terms of people feeling that their over-stretched services have to be shared with people from Newham.”

Increased vulnerability
Pinder does not envisage rosy outcomes for the east London children involved in such a transfer. “The disruption to education and their social networks would be pretty difficult to repair,” he says. “We have very low levels of black and ethnic minority populations here and from a ‘children in the playground’ point of view, any difference is going to be picked up, whether it’s accent, colour or cultural difference. I would have thought any child moving to a new school or area like this is going to be more vulnerable.”

Children’s services directors are on alert for any signs of fresh migration into their areas as a result of the benefit caps, says Colin Green, who chairs the Association of Directors of Children’s Services’ families, communities and young people committee. “It will impact not just on social care, but also on schools,” says Green, who is director of children’s services in Coventry.

“We [in Coventry] are very short of reception places and would find it very difficult to meet the need if significant numbers of more people arrive. There’s concern that the families who move may be among the most vulnerable and that they will arrive without their local [support] networks, which potentially increases their vulnerability.”

The impact that the housing benefit cap is having on child poverty is hard to measure accurately at the moment. But Kate Bell, London campaign co-ordinator at Child Poverty Action Group, believes the cap will be partly to blame if analysts are proved right in their forecast that child poverty will increase from 2013 onwards.

And there is widespread concern that families’ hardship will be exacerbated by further caps soon to be imposed on the total amount of benefits households can claim, which will be restricted to £500 a week for couples and families from April next year (see box).

The government has commissioned research into the ongoing impact of the housing benefit changes and an interim report is due in the summer.

A Department for Work and Pensions spokesman says: “Welfare reform is absolutely necessary to encourage financial independence, reduce benefit dependency and restore fairness to a system that was left to spiral out of control.

“There is no reason for people to be moved far away from their communities. Apart from the very expensive areas in central London, around a third of private rented properties are still affordable to benefit claimants and housing benefit will meet rents of up to £21,000 a year.”

Meanwhile, Goldstone is doing what he can to guide families through some stark realities in Westminster. “People who are using their child benefit or other benefits to meet the rent shortfall will suddenly find they have no money left to feed and clothe their children when the cap on overall benefits for workless households is introduced next April,” he predicts. “It’s not going to be one cataclysmic event which strikes one day. It’s more like a slow motion car crash.”


Changes to benefits

• The caps to local housing allowance rates were announced in the government’s emergency budget in June 2010.
• In April 2011, caps were introduced to ensure that the allowance cannot ?exceed £250 a week for a one-bedroom home, £290 for a two-bedroom home, £340 a week for a three-bedroom home and £400 for a home of four ?bedrooms or more.
• The government has also set local housing allowance rates at the 30th percentile of rents in each local area rather than the median, restricting claimants to the cheapest 30 per cent of homes.
• Of the households affected by the changes to local housing allowances, 450,000 include children.
• The Department for Work and Pensions (DWP) argues that these changes are necessary to curb its spiralling expenditure on housing benefit, which doubled from £11bn to £22bn in the decade to 2010.
• As part of the Welfare Reform Act, the government is also capping the total amount of weekly benefit that workless families can receive from April 2013.
• Single households will be restricted to combined benefits of £350 a week and couples and families to benefits totalling £500 a week.
• London Councils, the umbrella body for London authorities, predicted in November that 133,000 households in London would be unable to afford their rent as a result of the caps to overall benefits or local housing allowance.
• Shelter predicted in 2010 that the housing benefit caps would leave up to 54,000 children in households with less than £100 after housing costs to cover all other expenses for a week. The charity estimated that a further 33,000 children would be in households with less than £50 a week after housing costs.