Magazine article Public Finance

Higher Council House Rents 'Will Increase Benefits Bill'

Magazine article Public Finance

Higher Council House Rents 'Will Increase Benefits Bill'

Article excerpt

The Housing Benefit bill is likely to soar after Chancellor George Osborne confirmed that rents for new social housing tenants will rise to 80% of the market rate, Public Finance has learnt.

The measure, contained in the October 20 Spending Review, was part of a 50% cut to the social housing budget. Osborne claimed the move, alongside £4.4bn of capital funding, would enable the government to build 150,000 affordable new homes over the next four years.

But Karen Buck, shadow work and pensions minister, told PF that the step was 'extraordinarily inconsistent' with the coalition's drive to cut the Housing Benefit bill and increase incentives for work.

'Very high rent can only be a disincentive for work,' she said. People living in social housing and looking for work would need to find much higherpaid jobs, she warned. In some cases, rent Increases could be as much £200 a week, Buck said.

Some 65% of social home tenants are already on benefits.

Buck added that a large proportion of housing costs would be shifted from the Department for Communities and Local Government to the Department for Work and Pensions. …

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