Section 5.7 of a “Mapping Poverty Report ” presented to Cambridge City Council’s Strategy and Resources Scrutiny Committee on Monday the 17th of November 2008 states:
The Rent Service determines Broad Rental Market Areas and sets Local Housing Allowances for them. Approximately 800 claimants could be affected by changes brought about by a Rent Service Review of our locality, with the introduction of a new Broad Rental Market Area, extending the area for the new Local Housing Allowance beyond the City. A wider area will mean the dilution of high private rents in Cambridge by lower rents charged in outlying areas. Revenue Services found that 95% of claimants had a reduction of £55 per month on average after they were referred to the Rent Service.
Councillor Cantrill explained what this means in practice using one of his constituents who was receiving of housing benefit as an example. His constituent took some work – on a fixed term contract – which meant he stopped needing state support for a period of time. When his fixed term contract came to an end he applied for benefits again, but found that due to the new Local Housing Allowances – based not on the cost of renting just in Cambridge, but on the cost of renting in the surrounding areas he was £100/month worse off.
The Cambridge region includes Huntingdon, St Neots, St Ives, Newmarket, Saffron Walden, Haverhill and Ely.
One effect of this might be to force people to leave the city, it could also discourage those receiving benefits from taking work.
Currently Cambridge Council is currently making emergency funding available to cover the difference, but the meeting was warned that this could not continue for long.
The Liberals tried to make a party political point out of this; they tried to bait Cllr Herbert, the Labour leader of the opposition in Cambridge into condemning the Labour Government which has established the Local Housing Allowance. Cllr Herbert is sometimes caught in a difficult position when his passion for representing the people of Cambridge comes into conflict with his support for the Labour Government.
“Local Housing Allowance (LHA) was introduced nationally on 7 April 2008 and is a new way of working out Housing Benefit for private tenants.”
The Cambridge area map is available from:
David Howarth raised this in Parliament on the 20th of October 2008 saying:
What does the Secretary of State have to say to the 800 people in my constituency whose housing benefit is being cut, or is threatened with being cut, because of the new absurd way in which the broad market rental areas are being calculated? I understand that he has already undertaken to review the policy, but in light of the illegality of it, as declared by the House of Lords, will he make sure that all those people who have wrongfully lost out will be fully compensated when this policy as it must do, changes?