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Government faces benefits challenge

The Government is facing a legal challenge to its package of housing benefit cuts, due to be implemented on April 1 and save around £2 billion a year.

The Child Poverty Action Group (CPAG) is seeking judicial review of the reforms, arguing they breach equality laws and will transform the benefit from a truly national scheme into an "engine of social segregation".

Campaigners believe the changes, announced by Chancellor George Osborne in last year's Budget and spending review, will effectively result in the "social cleansing" of parts of London by pricing them out of claimants' reach.

London Mayor Boris Johnson has estimated that more than 9,000 London households and over 20,000 children may have to leave their homes as a result of new caps which will limit housing benefit claims for private sector tenants to £400 a week for a four-bedroom property, £340 for three bedrooms, £290 for two and £250 for one.

Less than one third are expected to be able to find alternative accommodation nearby, meaning that more than 14,000 children could be forced away from their home area, according to evidence submitted to Parliament by the Mayor's office.

More than one in 10 claimants in London - around 17,400 households - will lose out as a result of the caps, with an estimated average loss of £81 per week.

Meanwhile, large families will no longer be able to claim housing benefit on properties with more than four bedrooms.

Lawyers from Doughty Street Chambers, acting for CPAG, will argue that the changes are contrary to the fundamental purpose of the housing benefit scheme, which was originally intended to be a national scheme to prevent homelessness, and they will say they breach equality laws because ethnic minorities and lone parents will be disproportionately hit.

A spokesman for the Department for Work and Pensions said: "We can confirm that CPAG are applying for a judicial review.

"However, it's absolutely vital that we take urgent steps to manage the housing benefit expenditure, which has been spiralling out of control for a decade."

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