Field's rent shake-up for millions

MINISTERS will this week herald the start of a new social security revolution by targeting the pounds 12bn worth of benefits paid to help young single people, poorer families and pensioners meet their rent.

In a move designed to change the culture of dependency, social security minister Frank Field, a key figure in New Labour's welfare strategy, will point the way to a new deal on housing in his long-awaited Green Paper.

Tough measures to combat up to pounds 1bn-worth of Housing Benefit fraud will be allied to longer-term efforts to replace the benefit completely. That would lead to the most dramatic shake-up for millions of tenants and landlords in decades. Around four million households currently depend on the benefit.

A committee, which will report after this week's Green Paper, is likely to recommend a complete overhaul of the system whereby those who qualify for income support automatically have their rent paid by local authorities. Ministers argue that, because the Treasury reimburses the money automatically, fraud is rife.

One controversial option is for those in need to receive a housing voucher. If their accommodation costs more than the value of the voucher, they would have to meet the difference. However the Treasury prefers the idea of a tax credit, at least for those in work.

The decision to identify Housing Benefit as a central problem reflects both its cost - around pounds 12bn a year - and growth. In real terms the bill for the benefit has risen by an average of 11 per cent per annum for the past six years.

Those claiming benefit come from all age groups - although many older people who are entitled to the benefit fail to apply.

The paper on welfare reform, which will be launched on Thursday by Mr Field, contains seven themes and is designed to emphasise that citizens have responsibilities as well as rights. The Government will include more than 20 measures by which its critics can judge progress.

Mr Field will propose a crackdown on fraud, with the Benefit Fraud Inspectorate, which audits local authority spending on Housing Benefit, to be beefed up. Agencies which administer benefits will be encouraged to pool information on claimants in order to close the net on those claiming fraudulently, and on those who can work but choose not to.

Local authorities will be given greater incentives to detect housing fraud. The last government's efforts, which let councils keep a proportion of cash saved through detection, will be stepped up.

The moves are part of a wider strategy to provide "social housing". The Government wants to encourage the private rented sector and the building of new cheaper homes - one means of doing which could be the release of more of the capital receipts held by local councils as a result of house sales under the Tories.

The document will stress the need to protect the most vulnerable in society and pull back from suggestions of "affluence" testing of benefits. One source said it would reassure several groups, including the disabled, who feared a broader attack on Disability Living Allowance.

Field's reforms, page 4