Laura Sharman 27 February 2020

Housing benefit reform a ‘false economy’

Councils have been left carrying the financial burden of reforms to housing benefit, new research has revealed today.

A new paper from economists at the University of Warwick has found that since 2011, for every pound the Government has saved in housing benefit, councils have been forced to spend 53p more on temporary housing.

The researchers also found the cuts have had ‘substantial’ human costs such as an increase in evictions, individual bankruptcies and homelessness.

They found that forced evictions in the private rented sector rose by 22% after the cuts were implemented, with the number of households living in council-provided temporary accommodation increasing by nearly 18%.

Dr Thiemo Fetzer of CAGE said: ‘Our study shows that this has been a very costly social policy choice both in the short term and in the long term.

‘In the short term councils have had to increase spending to meet their statutory obligations in addressing and preventing homelessness. As councils have limited means of raising revenues, let alone issue debt, they are left with cutting services elsewhere to pay for these extra costs.’

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