Housing benefit cuts “will increase homelessness”; Council loses £10.5m in unpaid rent

Cllr Jillian Creasy, leader of Sheffield's Green Party Group

The introduction of a cap on housing benefit could result in increasing social problems with serious debt and homelessness, warned Cllr Jillian Creasy, leader of Sheffield’s Green Party group today.

Commenting on a report from homelessness charity Crisis, Cllr Creasy noted that one in five Sheffield households receive housing benefit, a figure which is likely to increase as unemployment rises.

Her comments come on the same day that the Star revealed that Sheffield has lost £10.5m in unpaid council house rent over the last six years. Sheffield Homes, which manages the city’s social housing, has written off £9.26m of this figure as bad debt.

The loss was revealed following an inspection from the Audit Commission (which the coalition revealed over the weekend would be axed with the loss of 2000 jobs), which urged Sheffield Homes to improve its rent collection methods.

The report estimates that the average loss of income from the changes to housing benefit will add up to £600 per year per household.

Cllr Creasy said, “About 48,000 households in Sheffield are currently claiming housing benefit. A loss of £600 for someone earning £16,000 (after tax-free allowance) is the equivalent of an income tax rise of 3.75%. These cuts by the coalition government will leave more Sheffield people struggling to pay the rent, more falling into serious debt and more people becoming homeless.

It’s very unfair, coming at a time when many people are facing economic uncertainty or even redundancy. Once again we see the coalition government ’s cuts are hitting the poor hardest. The government could avoid these cuts by tackling tax avoidance and tax evasion by some of the wealthiest, which could raise billions of pounds a year.”

Following the coalition government’s first budget in June, the Department for Work and Pensions admitted the cap would have an impact on household income, but said, “the purpose of reform is to influence rent levels and housing choices, which is likely to mitigate the impact of these measures.”

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