From the BBC news website: 'The number of households that will be affected by a new £500 a week benefit cap has fallen by over a quarter, the Department for Work and Pensions says.The government initially estimated that 56,000 households would see their benefits reduced by the policy, losing on average around £93 per week.It now expects 40,000 households to be affected.
The department said the change came as more people sought help to get into work.'
From ITV: 'Iain Duncan Smith has claimed that the benefit cap has already pushed more people in to work before it starts in four London boroughs on Monday. 'The benefit cap sets a clear limit for how much support the welfare state will provide – the average wage for working households. But it's also a strong incentive for people to move into work and even before the cap comes in we are seeing thousands of people seeking help and moving off benefits. '
It seems Mr Duncan Smith is saying that the estimated number of people affected by the cap has fallen because claimants have changed their behaviour, moving into work in response to the prospect of benefits being capped. This is not the first time he has made this claim http://www.newstatesman.com/blogs/economics/2012/07/telegraph-and-mail-s... As on the previous occasion, he has absolutely no evidence to support it. The difference this time is that he is contradicted by his own department.
Here is the explanation for the reduced estimate given by the department's analysts in their report http://statistics.dwp.gov.uk/asd/asd1/adhoc_analysis/2013/Ben_Cap_Update...
'An Impact Assessment was published 16th July 2012 within which the estimated
number of households that will be impacted by the cap in 2013/14 was 56,000.
Since this publication the disregard for housing costs of Supported Exempt
Accommodation was announced in the Autumn Statement. There have been a
number of further policy changes, such as changes to benefit uprating and
methodological improvements that have also reduced this estimate. In addition to
this there have been underlying caseload changes, due to normal benefit
caseload churn, reducing those potentially in scope for the cap.
A scan of household benefits in December 2012, a comparable time period to the
data used for the July Impact Assessment, estimates the number of households
that will be impacted is now around 40,000.'
So the department believes the reduction in the estimate is explained by policy changes which directly affect the number of people falling foul of the cap, methodological changes and 'normal benefit caseload churn.' It does not suggest that behavioural change played any role. That seems clear.
What is not clear is why a minister should feel entitled to spin the department's findings in a way which flies in the face of what the department has in fact said.
[Update 20.25 Nicola Smith from the TUC has pointed out that IDS appears to be conflating two different pieces of DWP analysis. The first is the one discussed above; the second is the results from JobcentrePlus engagement with clients they believe may be subject to the cap http://www.dwp.gov.uk/docs/benefit-cap-statistical-data.pdf . Of 82,000 clients contacted by Jobcentre Plus over the period May 2012 to March 2013, 8,000 moved into work. This does not of course tell us how many would have moved into work anyway, as I pointed out in the New Statesman blog cited above the last time figures on this were released. DWP acknowledges this: 'The figures for those claimants moving into work cover all of those who were identified as potentially being affected by the benefit cap who entered work. It is not intended to show the /additional/ numbers entering work as a direct result of the contact.' (Their emphasis.) So neither piece of analysis warrants Mr Duncan Smith's claim that the cap has led to a change in client behaviour. ]