A report suggests that the government’s benefit cap will find it difficult to meet its aims of encouraging people to work and its ability to save taxpayers’ money.
The benefit cap which affects the amount of benefits that non-working people aged between 16-64 can receive has been piloted in four areas in the UK, and will begin to roll out across the rest of the country soon. The cap also sees that couples and lone parents will receive a maximum of £500 a week and single people will be limited to £350.
The Chartered Institute of Housing have looked at one of the four pilot areas, Haringey. They have said that just 10% of 747 households affected were known to have found jobs and almost half of these people got extra funds from the council to make up for the money lost.
However, the Work and Pensions minister, Mike Penning has said that the report was “flawed”, reports the BBC.
The research by the CIH has shown that the amount lost by the households ranged from 15p to £374.50 a week and 51% of the households lost between £50 and £199 each week. Larger families seemed to have lost the most and 2,300 children were affected by the cap.
Whilst the research found that whilst attitudes toward employment are beginning to change, there were numerous barriers in the way of claimants finding work, for example a lack of affordable childcare.
Nearly half of capped households claimed Discretionary Housing Payments from the council to help them pay their rent, which the CIH said “both shunts costs between national and local government budgets and masks the true impact of the cap until those discretionary payments run out”.
Chief executive of the CIH Grainia Long said: “The government said the benefit cap would save money and encourage people into work, but this report shows it is far from achieving both of those aims in one of the worst affected areas. There have been whispers that the government is considering lowering the cap or increasing the amount of hours people must work to avoid it. Unless ministers commit to increasing support for people looking to get back into work and funding for childcare this would be very dangerous.”
Claire Kober, leader of Haringey Council, said: “Only a few households have been able to get back into work and, while the government may be making some savings, the real costs are just being passed to local councils already under enormous financial pressure. People still need a lot of support to get training or back into work and spiralling housing costs mean there is a long way to go before anyone could claim the benefit cap is working.”
The DWP says that the research did not take into account the number of people that were helped to find a job before the cap came into place. Mr Penning says, “This research relies on early and limited data from a single council and completely ignores the fact Jobcentre Plus has helped 16,500 claimants nationally into work who were potentially affected by the benefit cap. We do not recognise this report as providing a sound or reliable picture of the reform.”