The rise in Housing Benefit costs

David Webster writes:

“The DWP’s ad hoc analysis of the growth of Housing Benefit expenditure seems to me to have been presented in a misleading way. In 2000/01 HB for private rental was £2.7bn, in 2012/13 £10.9bn. (real terms) – a total increase of £8.17bn and in fact a quadrupling.

All that the note mentions is the real increase in rents, as increasing the bill by £3bn. But if the caseload had stayed the same, this would only have been £2.3bn.

The major part of the increase is due to increased caseload (i.e rundown in social renting) – £3.2bn if rents had stayed the same, and £5.9bn when the rent increase is included.”

The figures for private renting are indeed four times the size they were – double the rent, double the caseload – but they don’t account for all of the increase in HB costs.  Another part is down to the increasing levels of social rents, imposed on local authorities and successor landlords over the last ten years.  That process is not yet complete, because the level of increases needed to meet the government’s targets is greater than landlords have been permitted to charge, so further increases are in the pipeline.

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