London borough accused of ‘social cleansing’

The impact of the government's benefit cap hit the headlines today when details emerged of Newham Council's request to a housing association 160 miles away in Stoke to provide rented homes for families priced out of the east London borough.

Chief executive of supported housing provider Brighter Futures Gill Brown told the BBC's flagship radio news show Today:

"I think there is a real issue of social cleansing going on.

"We are very anxious about this letter which we believe signals the start of a movement which could see thousands of needy people dumped in Stoke with no proper plan for their support or their welfare."

Mayor of Newham Sir Robin Wales told the BBC that benefit cuts meant that people from wealthier parts of London were seeking homes in Newham, leading to a lack available and affordable homes for people on its waiting list. He said the council had written to 1,179 organisations across the country asking for help, and cited as a contributory factor the benefit changes that now limit Local Housing Allowance (LHA) to the level of the lowest 30 per cent of rents in an area, and plans to cap benefits from 2013.

Newham's letter asks providers to lease suitable homes from private landlords or lettings agencies and let them to homeless families nominated by Newham. The provider will receive direct payment from Newham of 90 per cent of the Local Housing Allowance, plus £60 a week.

Housing Minister Grant Shapps responded [4:15 into clip] that the housing benefit system, even after reform, is still very generous and that Newham were playing politics in the run up to local and mayoral elections. He claimed that over a thousand homes were available on the Rightmove website within a five mile radius of Newham, and that his guidance on rehousing of homeless families in the private rented sector made it clear that the welfare needs of the families must be taken into account.

The controversy raged throughout the day:

• The National Landlords Association told the Telegraph that there is a shortage of private rented homes in Newham which will only be exacerbated by the council's plans to introduce a borough wide landlord licensing scheme.
• The National Housing Federation observed that 'the Government's welfare cuts will increase the pressure on local authorities to seek accommodation for its homeless residents far further afield'.
• Sinead Butters, chair of the NASH group of housing associations in Staffordshire and chief executive of Aspire Housing, said “There will no doubt be stark choices ahead for both housing providers and tenants, but NASH feels very strongly that relocating those on housing benefits to already overstretched communities is not the solution."
• Shelter urged the Government to consider the damage inflicted on families by cuts to housing benefit.
• Shadow Housing Minister Jack Dromey told the Telegraph that up to 40,000 families could be forced to move costing the tax payer £240m.
• The Labour Party in Westminster revealed that the council is considering an offer from the Smart Housing Group to re-house dozens of homeless housing benefit claimants to Derby and Nottingham.

By the end of the afternoon Conservative Home had published a letter from Shapps to the BBC Director of News questioning whether Radio 4 were right to run the story in the period before the local and mayoral elections.