Guide to Major Welfare Reforms Being Introduced and Planned for Introduction

London is characterised by mixed and diverse communities. For me – and I suspect millions of other Londoners, it is what makes London a great city. These mixed and balanced communities are also a major contributor to London’s economic and cultural success.

The maps below show the extent to which the welfare policies being introduced by the government will change the face of London and dramatically reduce the number of neighbourhoods that are affordable to Local Housing Allowance (LHA) recipients by 2016.

More on my thoughts about the threat of ghettoisation here.

2010

The map below shows that in 2010, before reforms were introduced, 75% of London neighbourhoods were affordable to those supported by LHA.

Policies Already Introduced in April 2011

Policy
For new claimants, Local Housing Allowance (LHA) rate reduced from median (roughly around 50%) to the bottom 30% of local area rents and a cap placed on the maximum amount of LHA payable for each property size introduced. LHA weekly rates will not be allowed to exceed

  • £250 for a one bedroom property;
  • £290 for a two bedroom property;
  • £340 for a three bedroom property; and
  • £400 for a four bedroom property

Impacts
New claimants living in properties that are more expensive than the bottom third of the local market, initially hitting inner-London harder than anywhere else.

Policy
Abolition of the five-bedroom rate.
Impacts
All new claimants who would previously have been eligible for the five bedroom room rate, in particular, large families.

Policy
Abolition of the £15 weekly excess for claimants whose rent is lower than the amount of LHA they receive.
Impacts
Everyone, hitting new claimants immediately and existing claimants nine months after the date of the anniversary of their claim

Introduced in January 2012

Policy
LHA changes extended to include all existing claimants up to nine months after the date of their claim, causing a staggered impact.
Impacts
Claimants living in properties that are more expensive than the bottom third of the local market.

Policy
Age limit for Shared Room Rate entitlement increased from 25 to 35 years. Applicable one year after last assessment.
Impacts
Everyone under 35 currently living in a one bedroom property. Exceptions granted for former rough sleepers who spent three months or more living in a hostel and received support.

From 2011

The reforms introduced in 2011 and 2012 transform London, with inner-London being hit hardest.

From January 2012 the proportion of affordable neighbourhoods in inner-London will drop from 67% to 35% – meaning 65% of neighbourhoods are unaffordable to those supported by LHA. Outer-London affordability drops from 79% to 59%.

April 2013

Policy
Connection between LHA rates and market rents broken, LHA rates now linked to the Consumer Price Index, which had traditionally risen at a lower rate than the Retail Price Index and, last year, substantially lower than rent. Benefit will therefore continue less and less rent, meaning that actual proportion affordable to LHA recipient will drop well below the bottom 30% of homes.
Impacts
Everyone in the private rented sector claiming Local Housing Allowance.

Policy
Reduction in housing benefit for under-occupying social housing.
Impacts
Those in social rented homes with spare rooms, particularly those requiring rooms for regular visitors such as the frail, those with non-resident carers and those with children at university.

Policy
Introduction of a £500 a week total benefit cap for out of work households.
Impacts
Everyone out of work and on benefits, particularly hitting families hard in high rent areas. Exemptions apply to households where someone receives Disability Living Allowance or is a war widow.

2016

The additional policies introduced in April 2013 will mean that at least 80% of inner-London will be unaffordable to LHA-supported households by 2016.

With only 44% of outer-London neighbourhoods now affordable – not necessarily available – thousands of families will not be able to live in outer-London at all.

 

% Affordable in 2010

 

% Affordable in 2011

% Affordable in 2016

City of London

80

0

0

Camden

61

23

11

Greenwich

83

48

38

Hackney

79

50

19

Hammersmith and Fulham

66

40

6

Islington

79

21

3

Kensington and Chelsea

49

0

0

Lambeth

62

37

26

Lewisham

98

77

49

Southwark

65

37

36

Tower Hamlets

51

37

17

Wandsworth

58

26

11

Westminster

43

9

3

All Inner London

67

35

20

Barking and Dagenham

100

100

91

Barnet

71

50

30

Bexley

99

86

64

Brent

90

64

38

Bromley

51

27

25

Croydon

82

64

55

Ealing

89

74

47

Enfield

98

90

73

Haringey

81

56

49

Harrow

78

54

39

Havering

77

70

49

Hillingdon

91

69

48

Hounslow

71

57

50

Kingston

86

48

29

Merton

68

48

40

Newham

100

88

76

Redbridge

71

42

28

Richmond

48

24

18

Sutton

95

71

42

Waltham Forest

98

58

27

All Outer London

79

59

44

All London

75

51

36

Source of maps and statistics: Cambridge Centre for Housing and Planning Research

Nicky Gavron is a member of the London Assembly and Labour Group spokesperson for housing and planning

What do you think? Please leave a comment.

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About nickygavron

Former Deputy Mayor for London, London Assembly Member, Chair of Planning Committee, and Labour Spokesperson for Housing and Planning
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