Plans to cap housing benefit payments at £400 a week have been delayed by nine months after the Government agreed that some families would need time to find a new home.
The move will ease tensions within the Coalition Government, amid outcry from critics including a number of Liberal Democrat back benchers that families could be driven out of inner cities.
Boris Johnson, the Conservative Mayor of London, was forced to apologise after comparing the plan to
“Kosovo-style social cleansing”.
And Simon Hughes, the deputy Lib Dem leader, had threatened to vote against the measures.
In a written ministerial statement, Iain Duncan Smith, the Work and Pensions Secretary, announced that the cap which was due to come into force in April would be delayed until January 2012.
He said: “Clearly it is essential that existing customers have sufficient time to adjust to their new circumstances.”
To offset the cost of the change, cuts to housing benefit rates for new claimants will now come into force in April, rather than October as planned. The cap will apply to new claimants from April 2011.
Under regulations put before Parliament, housing benefit payments will be capped at £250 a week for a one-bedroom home, £290 for a two-bed property, £340 for a three-bed house and £400 for four beds or more.
The reforms are designed to save £2 billion from the £21 billion annual housing benefit budget by 2014/15.
As part of the bid to drive down the cost of state support for private sector tenants, councils will be given new powers to pay housing benefit direct to landlords who agree to reduce their rents.
Ministers also announced a further £50 million over the next four years to support local authorities negotiate lower rents and help those who do need to move.
From April 2011, claimants with disabilities or long-term health conditions who need overnight care will become entitled to an additional bedroom space for a non-residential carer.
Douglas Alexander, Labour’s shadow work and pensions secretary, said: “Labour will maintain the pressure for further changes to this ill-thought through housing benefit package.”
TUC general secretary Brendan Barber added: “This does little to lessen the impact of these very deep cuts in housing benefit.”
By Rosa Prince, Political Correspondent, Telegraph