Greenwich Council is attempting to dodge the costs of the Benefit Cap by launching a ‘workfare lite’ scheme for struggling parents affected by its introduction.
The benefit cap means that no-one out of work can now receive more than £500 a week in social security benefits. This has left tens of thousands of parents in London facing imminent homelessness as Housing Benefits, the payment which makes up the bulk of most benefit claims and lines the pockets of landlords, is included in the cap.
The Labour run Council have announced they will exploit a loophole in the bungled new measures which means that anyone working over a certain number of hours a week will not be subject to the cap. Those affected by the cap are to be offered full time, or in many cases part time temporary jobs.
Parents who refuse to take up this job offer, which will include single mothers with babies and toddlers, will almost certainly lose their homes. The jobs will be paid at at living wage say the council, which is at least a mild improvement on the workfare style scheme Labour have threatened should they be returned to power.
But just like Labour’s workfare, which will force anyone on benefits over a year into a minimum wage job, this employment will end after six months. In other words Greenwich Council are simply delaying the inevitable. And just like other workfare schemes, those working under threat of homelessness will be used to replace other roles at the council and undermine working conditions for everyone.
The Council have said this option is cheaper than having to accept those affected by the cap as homeless and therefore being legally responsible to house them. And they are correct. For every dismal penny the cap might save the government it will cost local authorities a fortune putting up homeless families in shoddy temporary accommodation for months, if not years on end.
Several local authorities have without doubt been shafted by the cap, which predominantly affects London Labour boroughs with large working class populations. Greenwich will no doubt claim this is the best they can do. But it is a sticking plaster for a truly desperate situation for many families, and a disaster for those with very young children.
Predictably to anyone following welfare reform, Greenwich Council’s move will end up costing the government more than if they had done what was intended of them and exported the families outside of the capital. Iain Duncan Smith’s bungled legislation means that someone working enough hours to be eligible for tax credits can now be eligible for more in benefit payments then someone out of work due to sickness, disability or unemployment.
A single parent with two children working part time on London’s alleged living wage could receive around £515 in benefits (or £550 on minimum wage) including Child Benefit, Tax Credits, and Housing Benefits – but crucially that parents must be earning 16 hours a week or that benefit is capped at £500. If those hours drop to 14 for any reason, as is not uncommon in part time low paid work, parents on the minimum wage will lose not just two hours wages, but £50 a week in benefits.
Astonishingly, it would therefore be in a parent’s financial interests to pay an employer to allow them to work another couple of hours a week!
Of course the other side of this is that parents don’t have to actually do those hours, but just make sure they get them on the books. And here lies the answer to Greenwich Council’s problem if only they look.
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