Government spent £5M preparing defunct policy to stop housing benefit for young people

Ministers spent £5 million preparing a policy that affected 90 people in its first three months before it was scrapped, according to new figures.

Last month Work and Pensions Secretary Esther McVey announced a U-turn on the policy to remove automatic entitlement to housing benefit for 18 to 21-year-olds, which was introduced in April 2017.

In a written parliamentary question, shadow housing minister John Healey asked for estimates of the cost incurred by Jobcentres, the Department for Work and Pensions and any other public agency in preparing for the roll-out of the now aborted policy.

Minister Kit Malthouse replied: “The preparation costs associated with the removal of the automatic eligibility of 18 to 21-year-olds to claim Universal Credit for housing costs are estimated to be £5 million.”

Around 10,000 young people were originally expected to be hit by the move to end automatic entitlement for the housing element of Universal Credit, which was announced by David Cameron and George Osborne in 2014.

After warnings from homelessness charities ministers introduced a series of exemptions to the policy, with parents, carers and those who could not live with their parents still able to claim.

Figures published in January showed in the first three months of the policy, just 90 people had claims turned down – some 4% of 2,090 that applied.

The policy was originally expected to save an estimated £95 million, though savings estimates were then revised down to £65 million by the end of 2019/20.

A DWP spokeswoman said: “We have always said we will keep Universal Credit under review and this change will make sure young people have the support that they need to get started with their working lives, and assure them that if they secure a tenancy they will be entitled to receive support.

“Universal Credit is expected to generate around £7 billion in economic savings when it is fully rolled out.”

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