Housing projects helping more than 400,000 vulnerable adults face closure because of government welfare cuts, analysis on behalf of Labour suggests.
The Treasury’s decision to cap housing benefit at the level available for private rents makes many schemes unviable, according to the research carried out by housing providers.
The housing cap is part of a £12bn package of cuts from the welfare bill.
The government refuted the figures and called the claims “spurious”.
The Labour Party, which commissioned the research, said under the proposed cuts an annual shortfall of £400m would put the frail and elderly at risk of losing their homes.
In the chancellor’s Autumn Statement he said the rate of housing benefit in the social sector would be capped at the same rate as is paid to those in the private-rented sector – which he said would deliver savings of £225m by 2020-21.
But some providers of supported housing say they rely on higher levels of housing benefit to cover the additional costs of care and support needed to cater for vulnerable adults.
The analysis – carried out by the Placeshapers group of housing associations – warned that the cut represented “a major threat to the financial viability of such schemes”.
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