Analysis of official data suggests that changes in claimant numbers may have more impact on Housing Benefit expenditure than government proposals.
*An updated analysis of this topic is available in Housing Benefit Claimant Numbers and the Labour Market: Modelling and analysis*
The coalition government has announced changes to Housing Benefit in the Emergency Budget and Spending Review that are projected to save £2.25 billion p.a. by 2014/15.
The analysis presents three plausible scenarios for the possible numbers of claimants and the impact this could have on Housing Benefit expenditure over the Spending Review period. The results suggest that:
- There is a striking difference between the numbers of Housing Benefit claimants in the scenarios. Small changes in the underlying assumptions on unemployment and economic inactivity lead to large changes in both the number of claimants and overall Housing Benefit expenditure.
- In one scenario Housing Benefit claimants could increase from the current level of 4.8 million to 5.3 million by 2014/15. In another scenario the number of claimants could fall to 4.0 million, well below government forecasts.
- The difference in claimant numbers could lead to a variation between the scenarios of £2.6 billion in annual Housing Benefit expenditure by 2014/15. This is in contrast to the government’s projected savings of £2.25 billion for 2014/15.
This research highlights the impact of claimant numbers on Housing Benefit expenditure. The results of this analysis suggest that changes in the number of claimants could have a bigger impact on Housing Benefit expenditure than all of the proposed government changes.