66,000 households hit by lower Benefit Cap

Yesterday the first set of quarterly statistics showing the impact of the lower Benefit Cap were published and they include several interesting revelations. Z2K has consistently opposed the cap since its first introduction in 2013. We do not accept that it provides greater work incentives, as most of those affected are unable to work in the first place, and the evidence shows it simply serves to further impoverish low income households, with many made homeless as a result. These latest figures confirm this.

Unsurprisingly, given that the lower cap has brought many more households within scope, the total number capped has increased dramatically from around 20,000 in November 2016 to 66,135 in February 2017.  However, this figure is well below the total of 88,000 forecast by DWP in its Impact Assessment back in August.  And it is substantially below the 120,000 suggested when the legislation lowering the cap was going through Parliament. 

The statistics also reveal that nearly three-quarters of those now capped have been hit because the cap was lowered from November 2016 onwards.  As expected, the cap is now hitting many more people outside of London – up from 60 per cent last November to 77 per cent in February.  However, even in London an additional 8,390 households have been affected who were not previously capped.  Hackney, Brent, Ealing and Enfield have all seen increases of more than 500 capped households in their borough taking them to a total of around a thousand cases each.

Perhaps most striking is that, despite a whole new cohort of claimants being brought into scope, the percentage of those who are in receipt of Job Seekers Allowance (and who are therefore required to be actively seeking work) is still only 16 per cent – 10,830 households.  More than half (51 per cent) are in receipt of Income Support (usually lone parents with very young children) and a further 15 per cent are in receipt of the Work-Related Activity Group of Employment Support Allowance (ESA) because they are deemed too sick or disabled to be in work at the moment.

All these percentages are almost exactly the same as they were back in November and indeed what they were back in May 2015, so the percentages of those newly-capped must be very similar.  We believe that the fact only one-in-seven of those hit by the cap are actually in a position to move into employment if they are able to secure it, is one of the main reasons it is not acting as a “work incentive” in the way ministers and their backers in the right-wing press claim.  The IFS has shown conclusivelythat capped claimants are only 5 per cent more likely to move into work than others.

These new statistics would have been a real boon to the Work & Pensions Select Committee, which had just opened an inquiry into the Benefit Cap.  That inquiry has been put on hold by the General Election, but we really hope it will be reconvened when the new House of Commons is elected and the select committees re-established.  In the meantime, the written evidence by advice agencies from around the country tells the story of how much financial misery and pain the cap was already causing some of the nation’s poorest even before it was lowered.  No wonder committee Chairman, Frank Field MP has already concluded:

Once again we see a benefit change purported to push people into work, while the evidence points to the contrary effect.

Z2K couldn’t agree more.  It is vital that MPs of all political persuasions step-up their scrutiny of this pernicious policy in the years ahead.

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About Marc Francis

Marc is Z2K's Policy & Campaigns Director. He was formerly the Housing & Neighbourhoods Policy Advisor at Save the Children and Public Affairs Manager at Shelter, leading successful campaigns against the long-term use of Bed & Breakfast accommodation for homeless families and for a Tenancy Deposit Scheme to be included in the Housing Act.

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