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Benefit cuts will mean 'people may have to move' - admits Lord Freud (<


Welfare minister Lord Freud has admitted that people "may have to move" as a result of housing benefit changes.

The admission comes as the Department for Work and Pensions (DWP) has announced it has commissioned an independent consortium to carry out a two-year review to evaluate the effects of recent Local Housing Allowance changes.

In answer to a starred question in the House by Lord Kennedy, who asked what the are implications of housing benefit reform for the geographic distribution of low income families, Lord Freud said: "My Lords, our published impact documents specify average losses by local authority.  We expect that a very small proportion of people may have to move as a result of the Housing Benefit reforms, with a minimal impact on the geographic distribution of low income families.

"My department has commissioned a consortium of leading research organisations to comprehensively evaluate the effects of recent Local Housing Allowance changes."

Among major reforms to housing benefit, April saw the introduction of a cap on the maximum payments from £250-a-week for a one-bedroom property to £400 for a four-bed home.

Existing claimants will see changes from January 2012. A £26,000-a-year cap on total household benefits will be rolled out from April 2013.

April also saw changes to the way the Local Housing Allowance – used to determine housing benefit payments – is calculated. Rather than being based on the median of rents in the area – or the 50th percentile, it will instead be set at the 30th percentile. In other words it will produce lower amounts.

The announcement of the £400-a-week limit on housing benefit sparked outcry earlier this year, with some MPs warning of an exodus of poorer families from expensive areas of London and other cities. London Mayor Boris Johnson warned he would not accept the “Kosovo-style social cleansing” of the capital.

The consortium, leading the DWP review, is led by Ian Cole from the Centre for Regional Economic and Social Research (CRESR) at Sheffield Hallam University. The research, which looks at the impacts of the changes at a national and local level and its effects on local housing markets, will produce initial findings early in 2012, with a full interim report by late spring and a final report in 2013.

Ian Cole,  Professor of Housing Studies in CRESR at Sheffield Hallam University and leader of the Consortium, said: "The changes to Local Housing Allowance are central to the Government's welfare reforms and I'm delighted to be leading this independent assessment which will look at the initial impact they will have on both landlords and claimants over the next two years.

"The review will evaluate the impact the reforms have had in different local authorities across Britain, and I look forward to working with the Institute of Fiscal Studies,  Ipsos MORI and Professor Peter Kemp of Oxford institute of Social Policy in tracking the effects of this crucial policy reform as they unfold".

Other key team members of the review group are Peter Kemp of Oxford Institute of Social Policy, Carl Emmerson of the Institute for Fiscal Studies and Ben Marshall from Ipsos MORI.