Autumn Statement - no help for capped families 

The Chancellor’s decisions to uprate benefits in line with inflation and to restore local housing allowance rates to the 30th percentile of rents were welcome, despite coming wrapped in punitive rhetoric, and accompanied by yet another ramping up of benefit sanctions. Increasing benefit rates and support with rent costs will make a difference to many families continuing to struggle with rising prices, who approach this winter terrified about how they will get by. But, sadly, these changes will provide absolutely no help to the over 85,000 households affected by the benefit cap, who will receive not one penny more.

The benefit cap places a fixed - and arguably arbitrary - limit on the social security support households can receive, affecting those not currently working or working less than the equivalent of 16 hours at the minimum wage. There are exemptions for households containing an adult or child in receipt of certain disability benefits. The benefit cap severs the link between need and entitlement in our social security system: a household will have their total need for support assessed, and if this comes out above the level of the cap (currently £22,020 per year for families with children, or £25,323 for families in London) they will simply receive less than they need. There are wide variations in the amounts that households are capped, but the average is £53 a week, a loss keenly felt by those already struggling to survive below the poverty line. 

While prices continue to rise, families affected by the benefit cap are effectively exempted - by design - from the help offered in the Autumn Statement. Others will be capped for the first time: for example, the increased Local Housing Allowance support will push some families into the cap, and so prevent the additional support from reaching them. The cap quite literally operates as a block on families getting the help they need - and it disproportionately affects those who need this help the most: families with children, single parents and larger families. 

Our research into the impact of the benefit cap on families with three or more children shows the damage that this policy is doing, and the ways in which it pushes people deeper into poverty, harming everyone in the household. Just last week, we interviewed Lucy, the mother of three young children - a six-year-old and four-year-old twins. In addition to her caring responsibilities, Lucy suffers from both physical and mental poor health which make paid work difficult. Because of the benefit cap and the repayment of a universal credit advance, the family currently receives £1,800 per month. The monthly rent on their private accommodation - a house which has had persistent problems of both mould and rats - is £1,375. This leaves just £425 per month for utilities, food and all other expenditure. Since the weather began to turn colder, Lucy finds she has nothing left and is increasingly reliant on charity and food banks to survive. 

Worse still, the landlord has recently announced that he will be pushing up the rent in the new year to £2,000 a month. As there is no way the family can cover this, he has served them with an eviction notice. Lucy has been bidding for years on council properties but without any success, and she’s been told that she might as well give up on finding another private property within her range. She is still searching - “I don’t want to go to court and have nowhere to go” - but she says “right now, I feel so low”. 

Last year, in the government’s 2022 Autumn Statement, they made a surprise decision to uprate the benefit cap at the same time as they uprated benefit levels in line with inflation. This was the first increase to the level of the benefit cap since it was introduced a decade ago. When implemented in April, this made a huge difference to Lucy’s family - it meant “months of not using food banks”, as she put it. But while prices have continued to rise, the uprating of the cap turned out to be a one-off, not repeated this autumn. Further, the core problem of the cap - that the support available can simply fall well short of a family’s essential needs, including their housing costs - remains. One justification given for the cap was that it would prevent landlords from raising rents and raking in extra cash from housing benefit support. But in practice, in a housing market where demand vastly outstrips supply, the consequences fall not on landlords but on vulnerable families.

While talking tough on benefits, the chancellor also underlined his commitment to a safety net for those in need. But the continued existence of the benefit cap means that this safety net has huge holes designed into it, holes that have got steadily larger as rents and prices have risen. Failing to uprate the benefit cap with inflation was a major omission in the Autumn Statement. But what we really need to see, and urgently, is the complete abolition of this pernicious cap, a policy which has no place in any country that takes the work of reducing and preventing poverty seriously.  

The project has been funded by the Nuffield Foundation, but the views expressed are those of the authors and not necessarily the Foundation. Visit nuffieldfoundation.org