Government expected to agree to fund families who could be made homeless at sensitive time in children's education
The government is expected to make a series of concessions in the coming days on it controversial �26,000 household benefits cap to win over wavering Liberal Democrat MPs.
Iain Duncan Smith, the work and pensions secretary, is expected to agree that a discretionary fund should be established to ease the burden on families who could be made homeless at a sensitive time in their children's education.
The move comes as Labour seeks to work with the Lib Dems - whose former leader Lord Ashdown voted last week to exempt child benefit - on agreeing a local rate for the cap.
In a letter to Nick Clegg, the shadow work and pensions secretary, Liam Byrne, says a local cap could ensure that 20,000 people avoid being made homeless by the changes.
"Under the government's proposals, there is a very real risk that 20,000 people will be made homeless, and that this bill will fall on council tax payers," Byrne writes. "The government's own modelling suggests this could end up costing more than it saves. A local cap solves this problem."
Duncan Smith has rejected a variable cap, though he said he was happy to discuss regional rates for benefits across the country. He also insisted that the government would seek to overturn six defeats in the House of Lords when the welfare reform bill returns to the Commons on Wednesday. Sources in the Department for Work and Pensions insisted there would be no concessions, though they pointed out that Duncan Smith has always made clear that the changes would be introduced in ways that would not cause hardship.
There are growing expectations that Simon Hughes, the Lib Dem deputy leader who has voiced concerns about the cap, will be won over by a new "discretionary fund". Hughes has expressed fears that the cap, which includes housing benefit, could force thousands of families out of their homes in London and the south-east.
The discretionary fund would allow councils to exempt some families from the cap for a limited period of time if, for example, a child was due to sit examinations. The fund, which would only apply to existing recipients, would be modelled on the system that was set up after Hughes voiced fears last year about the impact of the housing benefit cap.
The cap, which will mean that no working household will be allowed to receive benefits of more than �26,000, is due to come into force in April 2013. This means that councils will have around a year to introduce the changes, assuming that the House of Lords does not delay the welfare reform bill for a prolonged period of time. The government is threatening to force the bill through using the Parliament Act if peers hold out, but this would lead to a delay.
The Lib Dems have argued that showing discretion for a limited period of time could avoid families moving into expensive bed and breakfast accommodation if they are forced out of their rented home but need to remain in the same area for their child's schooling.
The government is also looking at the introduction of a grace period for people who suddenly lose their jobs and are immediately hit by the cap. Lord Freud, the welfare reform minister, said he would look at this after Lord Best, a crossbench peer, called for a grace period of 26 weeks. Best withdrew his amendment after the assurance from Freud.
In his letter to Clegg, Byrne says that varying local rates for the cap should be set by an independent commission. He writes: "We believe that a local cap would be a better fit. Let's be honest, a one-size-fits-all national cap simply would not work in practice. The high level of rents in London is forcing up the national average to a level that does not make sense in many parts of the country. For the same reason, a regional cap would clearly not be right. We need a local cap right for each area."
Source: http://www.guardian.co.uk/politics/2012/jan/29/benefits-cap-concessions-welfare-reform
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