Councils report rise in homelessness following welfare changes

18 Feb 14
Homelessness is increasing following the government’s welfare changes and further cuts could exacerbate the situation, a poll of councils has found

Reaping the benefits, a Grant Thornton report examining the impact of the government’s welfare reforms, found authorities in England had been active in addressing the effects of changes such as the introduction of a £26,000 annual household benefit cap.

In particular, councils had worked with housing associations, the NHS and others to ensure homelessness and social disruption was minimised. 

Among the reforms introduced by ministers last April were also cuts to council tax support and the introduction of the so-called bedroom tax, which reduces Housing Benefit if recipients are deemed to have a spare room.

However, one-third of councils polled by Grant Thornton reported a rise in homelessness, a shift potentially linked to rent rises and benefit reductions. In addition, there were concerns that direct payment of Housing Benefit to tenants rather than landlords may contribute to benefit money being used for other purposes, resulting in increased arrears.

According to the survey of 83 authorities, there was no evidence that the government’s controversial bedroom tax had led to people downsizing to smaller properties. This is due to a lack of alternative housing in some areas and therefore reduction in Housing Benefit serve only to increase household financial pressures, the report concluded.

Paul Dossett, Grant Thornton’s head of local government, said early indications were that the impact of reform on local authorities had not been as great as expected. 

‘However, this could be the calm before the storm,’ he warned. 

‘Some worrying signs are emerging, particularly around rising rental arrears, homelessness and reliance on food banks, which may be linked to the reforms and could put further pressure on authorities as the reforms are phased in.’


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