LAMBETH: Rent hikes could force families to quit work (From This Is Local London)

LAMBETH: Rent hikes could force families to quit work

8:18am Thursday 2nd October 2008 in News By Matt Watts

Low income families could be pushed into unemployment as Lambeth Council hikes rents to pay off a projected £14m overspend.

The council has tripled rents on temporary accommodation meaning homeless residents not claiming benefits will have to pay above market rates to stay in them.

The council has admitted in a report this could encourage people to stop working, as residents claiming benefit are not affected by the increase.

Within weeks working residents staying in one- or two-bedroom flats will be forced to pay more than £300 a week.

About 200 mainly black and ethnic minority households will be affected by the move.

Lib Dem housing spokesman Jeremy Clyne said the move would catch people affected in a poverty trap and give them a strong disincentive to work.

He added: “This change will have a crippling and sudden impact on some of Lambeth’s most vulnerable families.

“It is wrong that such households should pay the price for mismanagement, incompetence and suspected fraud in the conduct of the temporary accommodation budget.”

The move is intended to maximise cash the Labour council can get off the Government for people claiming benefit in an effort to eat into its debts.

The council’s temporary accommodation fund will be an estimated £14m in the red by the end of this financial year because of a blunder in which the council paid for hundreds of temporary accommodation units that it could not fill.

The council denies any fraud following an internal management investigation.

A council spokeswoman said its proposals were long overdue and have been made to make income owed to the council “work harder” without adversely affecting tenants.

She said the new policy had already been successfully tried and tested in many other local authorities and a thorough risk assessment had been carried out to safeguard vulnerable households.

She added: "Our rent levels offer very good value for money and are considerably lower than market rents for inner-London.

“All households placed in temporary accommodation are eligible to claim housing benefit, and those on lower incomes are likely to receive close to the maximum level of benefit available.

“Additionally households who are suffering severe hardship can apply for Discretionary Housing Payments, which can be awarded by the council to households needing help with their housing costs.”