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Councils given £10m to soften housing benefit blow Councils given £10m to soften housing benefit blow
(about 1 hour later)
The government is to give £10m to local councils to soften the blow of changes to housing benefit.The government is to give £10m to local councils to soften the blow of changes to housing benefit.
Number 10 denied it was a climbdown and said the controversial reforms would still go ahead.Number 10 denied it was a climbdown and said the controversial reforms would still go ahead.
It comes after reports Work and Pensions Secretary Iain Duncan Smith was ready to rethink the policy after pressure from MPs.It comes after reports Work and Pensions Secretary Iain Duncan Smith was ready to rethink the policy after pressure from MPs.
The proposed cap could force people out of their homes where rent is higher, some MPs and charities have argued.The proposed cap could force people out of their homes where rent is higher, some MPs and charities have argued.
The government is planning to cap the amount of housing benefit that can be paid out to families in a four-bedroom home to £400 but Lib Dem and some Conservative MPs, particularly those with inner London constituencies, have expressed concerns.The government is planning to cap the amount of housing benefit that can be paid out to families in a four-bedroom home to £400 but Lib Dem and some Conservative MPs, particularly those with inner London constituencies, have expressed concerns.
Ministers are adamant there will be no concessions on the principles of the reform bit the Department of Communities and Local Government is to grant £10m from its homelessness budget to local councils' funds to ease the consequences of the change. Ministers are adamant there will be no concessions on the principles of the reform but the Department of Communities and Local Government is to grant £10m from its homelessness budget to local councils' funds, to ease the consequences of the change.
The money will go to councils' "discretionary funds" - a pot of money that councils can use for special cases. This is not just expected to be used in London, the BBC understands. The money will go to councils' "discretionary funds" - a pot of money they can use for special cases. It is not expected to be aimed at London alone, the BBC understands.
So for example, if a family's rent was more than £400 but one of their children attended a local special school, the council could, at their discretion, allow the family to stay in that accommodation and keep paying a higher rate. For example, if a family's rent was more than £400 but one of their children attended a local special school, the council could - at their discretion - allow the family to stay in that accommodation and keep paying a higher rate.
But ministers accept that many thousands of people will have to move house if the changes go ahead.But ministers accept that many thousands of people will have to move house if the changes go ahead.
Chancellor George Osborne has already allocated £60m in his June budget, a tripling of the cash for the "discretionary funds" to help the changes.Chancellor George Osborne has already allocated £60m in his June budget, a tripling of the cash for the "discretionary funds" to help the changes.
Downing Street says it is "absolutely committed" to the housing benefit reforms despite growing anger from Lib Dem and Conservative backbenchers.Downing Street says it is "absolutely committed" to the housing benefit reforms despite growing anger from Lib Dem and Conservative backbenchers.
Deputy Prime Minister Nick Clegg has said it is not fair that people who go out to work receive more help with their accommodation than the unemployed.Deputy Prime Minister Nick Clegg has said it is not fair that people who go out to work receive more help with their accommodation than the unemployed.
Government figures suggest 32% of housing benefit claimants are not on out-of-work benefits - about 680,000 people. This is a greater than the number of claimants who are on Jobseeker's Allowance, which is about 650,000.Government figures suggest 32% of housing benefit claimants are not on out-of-work benefits - about 680,000 people. This is a greater than the number of claimants who are on Jobseeker's Allowance, which is about 650,000.
'Hardship and distress''Hardship and distress'
Lib Dem backbencher Tim Farron indicated to the BBC that MPs plan to force a Commons vote on the issue, following reports that the government was planning to make the changes without primary legislation.Lib Dem backbencher Tim Farron indicated to the BBC that MPs plan to force a Commons vote on the issue, following reports that the government was planning to make the changes without primary legislation.
Another Lib Dem rebel, Torbay MP Adrian Sanders, said he was seeking a meeting with Mr Duncan Smith and was confident of gaining concessions from the work and pensions department.Another Lib Dem rebel, Torbay MP Adrian Sanders, said he was seeking a meeting with Mr Duncan Smith and was confident of gaining concessions from the work and pensions department.
He said the changes were not just unfair on those living in cities, as London MPs have claimed, but also on people like his constituents who were in receipt of Local Housing Allowance, a benefit based on average rents in the local area which is facing the axe as part of the planned changes.He said the changes were not just unfair on those living in cities, as London MPs have claimed, but also on people like his constituents who were in receipt of Local Housing Allowance, a benefit based on average rents in the local area which is facing the axe as part of the planned changes.
He said the reforms would result in people being evicted because they were not able to pay their rent, which would lead to them claiming housing benefit at a higher rate.He said the reforms would result in people being evicted because they were not able to pay their rent, which would lead to them claiming housing benefit at a higher rate.
"The whole thing is completely and utterly unrealistic and it is going to cause hardship and distress," Mr Sanders told the BBC News website."The whole thing is completely and utterly unrealistic and it is going to cause hardship and distress," Mr Sanders told the BBC News website.
The planned reforms would also remove the "safety net" for single people aged under 35 who were suffering from mental illness, added Mr Sanders, as it would force them to give up their flats and houses for shared accommodation.The planned reforms would also remove the "safety net" for single people aged under 35 who were suffering from mental illness, added Mr Sanders, as it would force them to give up their flats and houses for shared accommodation.
Sources told the BBC Mr Duncan Smith was listening to MPs, especially those in and around London who had raised issues, and had already met the capital's mayor Boris Johnson.Sources told the BBC Mr Duncan Smith was listening to MPs, especially those in and around London who had raised issues, and had already met the capital's mayor Boris Johnson.
'Draconian''Draconian'
Liberal Democrat deputy leader Simon Hughes has held talks with his party leader, Nick Clegg, over the plans.Liberal Democrat deputy leader Simon Hughes has held talks with his party leader, Nick Clegg, over the plans.
Mr Hughes has described them as "draconian" and vowed to try to block them in Parliament.Mr Hughes has described them as "draconian" and vowed to try to block them in Parliament.
In the Commons, Mr Clegg denied that large cities would be "cleansed" of poor people following cuts to housing benefits.In the Commons, Mr Clegg denied that large cities would be "cleansed" of poor people following cuts to housing benefits.
He said the suggestion, made by Labour's Chris Bryant, was "deeply offensive to people who have witnessed ethnic cleansing".He said the suggestion, made by Labour's Chris Bryant, was "deeply offensive to people who have witnessed ethnic cleansing".
Other critics of the plans to cap benefits say they would penalise the long-term unemployed genuinely seeking work. Other critics of the plans to cap benefits, announced in the government's Spending Review last week, say they would penalise the long-term unemployed genuinely seeking work.
The changes were announced in the government's Spending Review last week. The review also included a cut of 50% on the amount spent on new social housing - but the government hopes to make up the shortfall by allowing housing associations to charge close to the full market rate for rent.
It also said spending on new social housing would be cut by 50% - but hoped to make up the shortfall by allowing housing associations to charge close to the full market rate for rent. 'On the hoof'
Lib Dem housing minister Andrew Stunnell said the coalition would deliver 150,000 new social homes by the end of its five-year term.
"Our housing programme will deliver more social housing in the next five years than Labour did in their 13 years," he told MPs in a Westminster Hall debate.
The National Housing Federation had estimated that only one in four social housing tenancies would need to be at 80% of market rent to ensure the 150,000 target was met.
But the former Labour Minister for London, Nick Raynsford, said setting social rents at 80% of the market level would destroy mobility.
"Existing tenants who would have thought above moving to a smaller home will not want to if they realise it will lead to a loss of security and a rent increase."
As more homes were underoccupied it could lead to a shortage of larger social homes, he said. The 80% market rent in his own Greenwich constituency would lead to social rents of £300 a week, which would be unaffordable.
"We're seeing all the hallmarks of policy being made up on the hoof," he told MPs.
But Conservative MP Mark Field, whose Cities of London and Westminster constituency includes some of the country's most expensive properties, said the policy would free up larger family accommodation.
Young middle class people had become excluded from city centres which had now become the home to either the super rich or the very poor, he said, adding: "That is not a healthy state of affairs."