Total housing benefit payments decreased in 2014

The total expenditure for housing benefits decreased by about £150 million in 2014. This comes at a time of increasing rents being faced by many families across the UK. So while the government made cutbacks to the programme last year, and the Tories promise more cuts if they win the upcoming election, many families are still struggling to pay their rent on a monthly basis.

Even though the total cost of the housing benefit scheme decreased last year, it is still almost 5 percent higher (or £1.6 billion in total) than it was four years ago. So tens of thousands of families still have been able to receive access to social housing as a result of the benefit. But fewer individuals may be able to qualify in the future if further reductions occur.

What lead to reductions?

The cutbacks made in 2014 were from various steps taken. One was stopping the fraud that has been occurring in the scheme. While there has been some progress there, it is estimated that the government still lost £1.4 billion last year as the result of improper claims and families committing fraud on their applications. The waster in the system is still very high, but the government has made efforts to stop this from occurring, and that includes giving local council’s more authority to address this crisis in partnership with the Department of Work and Pensions.

However, much more needs to be done here. While there have been some improvements in reducing errors and fraud in 2014, DWP as well as the watchdog agency Commons’ Public Accounts Committee feels they can find at least £400 million more in future savings. This will in effect bring the amount of waste back to 2011 levels. One easy step will be to improve the calculation of benefit payments, as over £100 million is lost in errors made by staff.

Other reasons for the reductions in benefit payments in 2014 include DWP reforms. One of the biggest was the spare room subsidy, or bedroom tax. They have also made other reforms such as adjusting caps on benefit payments. While the exact figures are hard to determine, it is thought that this has saved billions. Even with the cap having been cut back to £25,000 a year, some MPs want to go further. They want to limit benefit payments to £23,000. This will continue to save more money for the central government.

The government has promised more savings in this programme. Many ministers feel the amount being spent on housing each year is unsustainable. So they are promising potentially billions more in reductions over the next several years. The Tories in particular are stressing this, but no matter who is in the future coalition, people living in poverty need to plan for this.

This reduction in housing payments is also being combined with other welfare reforms. The overall aim of the government is to make this housing benefit accessible to more people and deal with emergencies, rather than have people depend on their cheques each month.