Tower Hamlets housing benefit bill increases by 118 per cent in 10 years

Robin de Peyer Wednesday, July 25, 2012
4:42 PM

The housing benefit bill for Tower Hamlets has increased by 118 per cent in the last decade, figures from the Department for Work and Pensions show.

In 2001-02 the government spent £116.5m a year on housing benefit for the borough’s residents - but in 2011-12 this figure had increased by £138m to £254.6m.

The figures indicate that Tower Hamlets has been hit particularly hard by the increase in rent costs in London in recent years. The average cost of renting a two bedroom house or flat in London gone from £1,429 in April 2006 to £1,865 in April 2011.

Some increase in expenditure on housing benefit will have been triggered by the economic downturn, which resulted in more people claiming a range of benefits. Tower Hamlets’ population size may also have been a factor, after growth of 26.4 per cent between 2001 and 2011, the highest of any local authority in England and Wales.

However, an increase of 118 per cent is indicative of the problems facing many residents of the borough, as rents continue to go up.

Kay Boycott, Director of Campaigns, Policy and Communications at housing charity Shelter, said: “With the housing benefit bill now a staggering £20 billion a year and showing no signs of slowing, short-term plans to cut spending without addressing the root cause of the high cost of housing will simply not succeed.

“Now is the time for a holistic, long-term approach which sees housing benefit and house building as means to the same end: ensuring that ordinary families can meet their housing costs.

Tower Hamlets’ outlay on housing benefit does not compare favourably to other London boroughs. Neighbouring Newham saw its bills go up by 95 per cent in the same period, and in Hackney there was an 85 per cent increase.