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Westminster Council is considering moving hundreds of families 130 miles away to live in Nottingham or Derby.

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The council has asked temporary accommodation provider Smart Housing Group to look at options outside Westminster to accommodate homeless housing benefit claimants.

The government has introduced weekly housing benefit caps of between £250 for a one-bedroom flat and £400 for a four-bedroom property – sums that would not cover private rent in large sections of Westminster.

The Smart Housing Group document states that by looking at a number of factors including property availability, accessibility from London, and employment opportunities, “the most viable area… would be Nottingham and Derby”.

The company suggests re-housing “150 properties within the next 12 months or so” with an option to “increase this number to closer to perhaps 500 properties”.

Opposition Westminster Labour leader Cllr Paul Dimoldenberg said: “There is absolutely no doubt that thousands of families from across London will find the only option they have of a home is to move hundreds of miles from London to a town or city with which they have no connection and where they have little prospect of a job.”

Westminster housing boss Cllr Ben Denton said vulnerable residents would be treated as a priority to live within the borough.

He said: “As hard working families are squeezed out of the housing market and with the demand for social housing vastly outstripping supply, the council is looking at providing fair and realistic options for applicants wishing to live in central London.

“To address this rising demand we and many other London local authorities are looking at temporary housing alternatives outside of the city both in neighbouring boroughs and elsewhere, particularly for those applicants with minimal connections to Westminster.”

A Department for Work and Pensions spokesman said: “There is absolutely no reason for people to be moved far away from their communities - apart from the very expensive areas in central London around a third of private rented properties are still affordable to benefit claimants.

“Even with our reforms, housing benefit will meet rents of up to £21,000 a year and we have a discretionary fund of £190 million to help families in difficult situations.

“Our reforms restore fairness to a system that was left to spiral out of control.”

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