Why the Bedroom Tax will cost more than it saves

by richardhutton

A good piece on how the Bedroom Tax will not only result in widespread homelessness, but also cost the public far more than it could possibly save:

At the weekend I saw the first BBC News article on the overall benefit cap of £500 per week.  This £500pw cap was supposed to be a national one in April yet instead the government are delaying this and having it operate in 4 London councils as a pilot.  The BBC report used one example – a single parent who wasn’t white so it’s no wonder Joe Public are ignorant of welfare issues when the state broadcaster panders to the Daily Mail view of the stereotypical scrounger!  She receives currently the report said £613 in welfare benefits and so will lose £113 per week which of course Joe Public will then assume that all single parents with 3 children get £613 per week in ‘benefits.’

Only after interviewing this person, and yes you have guessed she was not the most articulate person, so again the state broadcaster pandering to the stereotypical image, was it revealed that £335 per week of that £613 was for rent to a private landlord.  So this single parent with 3 children actually receives just £278 per week in WELFARE benefit.

Far more importantly is how the overall benefit cap of £500 per week will work as this explains why this crude cap will cost the taxpayer so much more.

The £278 per week welfare benefit is deducted from the £500 per week cap leaving £222 per week as the maximum amount left to pay for rent.  So this single parent with 3 children who is currently receiving £335 per week will see this reduce to £222 per week and means she is evicted for arrears very quickly.  Because this is not her fault and outside her control and because she has children the local council will have to place her and her children in temporary accommodation which in London will cost at least £800 per week and in some cases London councils are paying over £3000 per week for this.

I discussed this in detail in previous posts and showed this will cost over a billion pounds more per year to the taxpayer and public purse.  That is over £1000 million pounds more.  Yet the bedroom tax and the overall benefit cap are supposed to save £770m between them and so the country ends up paying MORE in benefit payments.

‘Bedroom Tax – the “Stubborn Mule” and why the public protest will fail’ By SPeye.

It’s worth noting here that the government has set its date for the national roll-out of the benefits cap – July 15th, this year. In London, rents increased during the last year. The Benefits cap has already resulted in families losing their homes – even before the Bedroom Tax / increased Council Tax come into effect; and before social security’s real value begins to decline. This is set to be replicated throughout Britain as a whole.