The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, said:
“The DWP says it can’t accurately predict the effects of its housing benefit changes either on individuals or on the housing supply. Instead it will rely on a ‘wait and see’ approach and monitor changes in homelessness, rent levels and arrears so that, where there is a need, it can intervene and respond.
“But even small reductions in housing benefit can have a severe impact on the finances of the poorest people. The Department must decide in advance exactly what actions it will take in response to increases in homelessness or rents.
“It is not clear whether the additional £390 million which the DWP has set aside to fund Discretionary Housing Payments over four years will be enough for local authorities to manage the impacts of the changes. This figure was not based on any rational assessment of need.
“At the time of our hearing, far too many of those who stand to be directly affected were worryingly unaware of the reforms and what they will mean for their finances.
“Claimants need to understand how their finances will be affected both by Housing Benefit and wider welfare changes. They also need to know what action they might take in response, for example, working extra hours or taking in lodgers.