What can Londons Poverty Profile tell us about Welfare Reform?

Hannah Aldridge, New Policy Institute

What can LPP tell us about welfare reform

1. 2. 3. 4.

Londons benefit claims and rates Housing costs and housing benefit in London Expected impacts Monitoring

LONDONS BENEFITS AND CLAIM RATES

Total benefit claims

Start of 2012 Income benefits 645,000 adults got an out-of-work benefit 2M families got working-tax-credits 240,000 pensioners got guarantee pension credit Other means-tested benefits Housing benefit for 854,000 families Council tax benefit for 822,000 families

Disability benefits 336,000 DLA 138,000 AA

What's unique about Londons benefits?

30% 25% 20% 15% England London

10%
5% 0% 2002 2012 2002 2012 2002 2012 2002 2012

Out-of-work benefit DLA/AA (as % aged (as % of working-age) 18+)

CTB (as % of all households)

HB (as % of all households)

Housing benefit is what really stands out in LDN

HOUSING COSTS AND HOUSING BENEFIT IN LONDON

Housing costs and housing benefit

Higher HB value required

High housing costs

Higher overall HB bill

More people entitled

Housing costs and housing benefit

London has a higher proportion of households claiming housing benefit and is growing faster Rents also much higher in London and growing faster Average HB of 132 per week in LDN (92 for England)

So Impacts will be broader and deeper in London

EXPECTED IMPACTS

Housing options: the national caps

Singles and couples without children Couple with one child and single with two children Couple with two children

Inner London is unaffordable to small families, all of London is unaffordable to larger ones

Proportion of households in PRS on LHA

10% 20% 30% 40% 50% 60% 0%

Housing options: the local caps

Source: DWP benefit data 2013 and Census 2011

Inner London Outer London

Outer London faces huge demand for low cost PRS

Enfield Barking Croydon Brent Harrow Bexley Havering Hillingdon Redbridge Barnet Lewisham Haringey Sutton Waltham Newham Ealing Hounslow Bromley Hackney* Greenwich Merton Kingston Wandsworth Lambeth Southwark Tower Hamlets* Richmond Westminster* Hammersmith* Islington Camden* Kensington*

MONITORING

Private rented housing benefit claims

Inner London 180% Outer London

170%
160% 150%

140%
130% 120% 110% 100% 2009 2010 2011 2012 2013

Curb in LHA impact of the reforms, which ones?

Change in LHA claims 2012-2013

6,000 Inner London 4,000 2,000 Outer London

0 -2,000 -4,000
Couple with Single with or without children children Under 35 Single, without children Couple with Single with or without children children 35 to 64 Single without children 65+ Overall change

Change to room rate is having the biggest impact

What the data doesnt tell us

Where are the 25 to 35 year olds? Moving home takes a long time How much more pressure can be tolerated and for how long?
Household budgets Discretionary housing payments