Benefit Cap Review

Iain Duncan Smith Excerpts

Monday 15th December 2014 Written Statements

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

Today I am publishing the Command Paper Cm 8985 “The benefit cap: a review of the first year”.

This review is published in line with the statement made by the then Minister for Employment on 1 February 2012. The document draws on a suite of evaluation commissioned by my Department, with key findings peer reviewed by the Institute for Fiscal Studies, or on its behalf by independent researchers.

The review also draws on the benefit cap official statistics and evidence previously published by my Department.

The extensive new evaluation material is attached to this statement and will also be published today on the gov.uk website.

The review brings together and summarises the messages across all of the evaluation publications. Key findings include:

There is consistent evidence of positive employment-focused behavioural change for claimants affected by the cap, including lone parents and carers. It is clear that the priority of claimants affected by the benefit cap is to find work and they are succeeding in doing so.

Many claimants were encouraged to find work as a result of the cap. Capped households were 41% more likely to go into work after a year than a similar uncapped group of households (those with benefit income just below the cap level). Among lone parents and families in London there was an even greater likelihood of capped cases moving into work than similar uncapped cases.

The benefit cap is a popular policy, 73% of the public support it in principle and 77% of the public agree that it is fair for households with no-one working to receive no more in benefit than the average amount working households receive after tax.

Very few capped households have moved house and where they have done so, the vast majority have moved locally. The benefit cap has led to little, if any homelessness and local authorities have coped well with its introduction.

I enclose below a brief description of each evaluation report:

Benefit cap: Analysis of outcomes for capped claimants

Analysis of administrative data carried out by departmental analysts and peer reviewed by the Institute for Fiscal Studies. This document examines the historical estimates of those in scope for the cap and effects of the benefit cap by comparison of outcomes of capped claimants and comparable groups. Evidence is presented on movement into work (proxied by Working Tax Credit exemption), moving house and movement out of scope for the cap.

Post-implementation effects of the benefit cap



An Ipsos MORI longitudinal telephone survey of capped households identified from the October 2013 Single Housing Benefit Extract (SHBE). The first wave of the survey was carried out with 1,200 claimants in February 2014, and the second in August-September 2014 with 468 of the same claimants. This work examines the behavioural change over time on employment, finances and housing.

In-depth interviews with people affected by the benefit cap

A Cambridge Centre for Housing and Planning Research (CCHPR) report based on interviews with 50 households affected by the benefit cap These households were identified from the same source as the Ipsos MORI surveyed claimants. This work explores coping strategies of households and changes in behaviour around work and well-being, mobility and household structure, income and well-being, and beliefs and expectations. It provides contextual information around themes explored in the survey.

Supporting households affected by the benefit cap: Impact on local authorities, local services and social landlords

This report by CCHPR draws on work in 10 case study local authorities (LAs); a survey of social landlords; and consultation with major lenders to the Housing Association sector. A variety of LA staff were interviewed in May-August 2013 and again in September 2014 in case study areas; 26 landlords were interviewed in 2013 and again after one year in these areas alongside 47 local agencies (including CAB and voluntary organisations); and variety of lenders were interviewed and provided written responses to the consultation in October 2013 and 2014. It provides information on how local services have been affected and how they are working with capped claimants.

Attachments can be viewed online at:

http://www.parliament.uk/business/publications/written-questions-answers-statements.