A report by the National Association of Citizens' Advice Bureaux says that the housing benefit system is in disarray with long delays in payments, as well as sizeable shortfalls in the amount of housing benefit claimants receive compared with the rent they have to pay.
The evidence, prepared as a response to a government review of housing benefit, will be published this week, and is likely to add to pressure on the Government over its welfare policies. Last week Tony Blair suffered his biggest ever backbench rebellion over plans to cut benefits for the disabled.
Senior Labour MPs believe housing benefit will be the next battleground in the Government's plans for welfare reform. Alistair Darling, Secretary of State for Social Security, wants to scrap housing benefit and bring in a market-based system.
Although the association also wants the system reformed, it warns that a flat-rate benefit, which the Government plans to introduce, could drive more people onto the streets. Its research, which includes cases dealt with by 500 advice centres in England and Wales, found that landlords were beginning to refuse to let to housing benefit claimants because of delays in payments.
The report also finds that town halls were evicting council tenants who had not paid their rent - even though the reason for the arrears was that the same council had not yet paid out housing benefit.
The plight of under-25s who are allowed to receive only the cost of a bedsit regardless of their actual rent, was also highlighted. In one case a young man renting a one-bedroom flat for pounds 76 a week found his benefit restricted to pounds 42.50. As a result he had accumulated arrears of pounds 240 and was evicted. When other landlords found that he was under 25 most refused to accept him.Reuse content