Mayor calls for urgent lifting of benefit cap

24 May 2020

 

*Number of low-income households in London having their benefits capped has doubled to 44,300

*Households already at the cap are missing an average of £320 per month in Government support

*Sadiq says that temporarily removing the cap would stop tens of thousands of families being excluded from COVID-19 support measures

 

The Mayor of London, Sadiq Khan, has today called for the Government to urgently lift the benefit cap after new research revealed that tens of thousands of low-income Londoners are being excluded from COVID-19 support measures.

 

New research by Policy in Practice, commissioned by City Hall, has shown that those subject to the benefit cap are not receiving hundreds of pounds of Government support each month – mostly increases in benefits that are supposed to help them pay their rent.

 

The Government places a limit on how much people can receive from the welfare system and the research found that the number of London households at this limit doubled to 44,300 in April after the Government said it was increasing benefits. It’s predicted that this could rise to 63,700 by next year as more people are forced to make a claim.

 

The Government introduced a number of changes to the benefits system that are meant to help households deal with the impact of coronavirus, including a £20 per week rise in the Universal Credit and Tax Credits personal allowance, and an increase in Housing Benefit for private renters to cover the cheapest 30 per cent of market rents. However, the Government did not lift the limit on the total amount of benefits many households can receive, meaning that tens of thousands of low-income Londoners are unable to benefit from these increases in support at a time when they need it the most. This leaves them potentially unable to pay their rent, and subject to rent arrears which could leave them at risk of homelessness.

 

The research found:

  • 44,300 households in London are having their benefits capped – double the number before April, with a 105 per cent rise in outer London and 80 per cent rise in inner London.
  • 22,300 households have seen no increase in support since March, as they were already at the benefit cap, and are now missing out an average of £320 per month in support. For private renters with children this is £532 per month.
  • 22,000 further households are now at the cap and are missing an average of £185 per month in support.
  • The number of households at the cap could rise to 63,700 by 2021 as the number of households who need benefits increases.

 

The report warns that local authorities will be unlikely to be able to fill these gaps in welfare support. The Mayor has provided £5m to the London Community Response, which is funding voluntary and community organisations, including those providing emergency support to Londoners, but is calling for the Government to urgently lift the benefit cap at this time so that households can get the emergency increase in benefits that is meant to help them.

 

The Mayor of London, Sadiq Khan, said: “It’s appalling that tens of thousands of Londoners are be excluded from vital financial support during these challenging times because the Government has not lifted the cap on benefits. They claim to be standing by those who rely on these benefits, but by failing to raise the benefit cap they are actually preventing thousands of low-income families from accessing this crucial support. This will leave families unable to pay their rent and other essential bills, and ultimately at risk of homelessness. That’s why it’s so important that the Government urgently lifts the cap on benefits so that low-income households can get the support they need.”

 

Deven Ghelani, Director and founder, Policy in Practice, said "The benefit cap no longer meets its original purpose of encouraging people into work. With people out of work due to Coronavirus and trapped by high housing costs it makes sense to suspend it at least for the duration of this crisis."

 

Caitlin Wilkinson, Policy Manager at Generation Rent, said: “The benefits cap was already pushing families in London into severe poverty before the pandemic hit. Now thousands more Londoners are relying on the benefits system, the cap means they will not have enough to cover rent and makes them vulnerable to eviction when the Government’s ban comes to an end next month. We know that the majority of landlords are demanding that tenants pay the rent in full, leaving them with no option but to get into debt or skip essential bills such as food. Secure housing is essential in the fight against coronavirus, but as it stands the Government’s welfare policy means this is out of reach for many of London’s private renters.”

 

ENDS

 

Notes to editors:

 

‘The interaction of COVID-19 measures and the Benefit Cap on low-income Londoners’ is published here http://policyinpractice.co.uk/wp-content/uploads/The-interaction-of-COVID-19-measures-and-the-Benefit-Cap-on-low-income-Londoners_pub.pdf

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