Headlines: April 30th, 2001

A sharp decline in the number of Housing Benefit claimants during the past four years has enabled the Treasury to save around 6.5 billion pounds, compared with the previous government’s spending plans. The savings are largely due to a drop of almost a third in the number of private sector tenants claiming Housing Benefit.Research findings published by the Joseph Rowntree Foundation show that the decline has coincided with restrictions placed on claims in 1996. These linked the maximum rent for which benefit can be claimed to local circumstances. They also meant that Housing Benefit became payable in arrears.

Other factors identified as having contributed to the fall in claimants include lower unemployment and introduction of the Working Families Tax Credit, which has raised the income of some families above the threshold for Housing Benefit entitlement. Local authority and government anti-fraud measures are also likely to have had some impact.

The fall in the number of Housing Benefit claimants living in properties rented from local authorities or housing associations has been much smaller, at around 10 per cent over four years. This reinforces the suggestion that the 1996 restrictions affecting the private rented sector are the main reason that the number of claimants has dropped.

The report highlights the opportunity the savings provide to introduce radical reforms to simplify and improve the Housing Benefit scheme.