12/10/2012 By Rhiannon Bury, Inside Housing

More than 171,000 single parents could be forced to move home if housing benefit is axed for under-25s.

The startling figure emerged as social landlords warned chancellor George Osborne’s plan to cut a further £10 billion from the welfare bill by 2016 will hit their businesses and the communities they serve. Mr Osborne’s plan includes cutting housing benefit for people under 25, which the government hopes will save around £1.9 billion.

Mr Osborne told delegates at this week’s Conservative Party conference in Birmingham: ‘How can we justify giving flats to young people who have never worked, when working people twice their age are still living with their parents because they can’t afford their first home?

‘Figures from the Department for Work and Pensions reveal that 45 per cent of the 385,000 under-25s who receive housing benefit are single parents and 65,770 are in employment.

Kate Webb, policy officer at housing charity Shelter, which opposes the move, said: ‘The way [the government is] positioning it is that it’s all about young school leavers but the statistics show that a lot of these households are young families.

‘It’s very hard to see how moving back to their parents can work.’

Caroline Davey, director of policy at charity Gingerbread, which helps single parents, said: ‘The government is describing this as single under-25s not in work but these are adults living on their own raising children. We think it’s really unacceptable and lacks the understanding on the ground for families like that.’

David Orr, chief executive of the National Housing Federation, said the move could make many young people homeless while landlords such as Moat warned an increase in arrears could reduce associations’ capacity to build homes.

The government is expected to find the remaining £8.1 billion cuts by restricting additional benefits for people who have children when they are not in work, and implementing a two-year benefit freeze.

In April 2011, it switched the measure for calculating benefits from the retail prices index to the consumer prices index – a move which will save the government around £11 billion a year by 2015/16.

Sam Lister, policy and practice officer at the Chartered Institute of Housing, warned the government could also be forced to cut benefits for older people to achieve the savings it is targeting. ‘The government has to start making inroads into payments for older people – any slack in the working-age households has been driven out already,’ he said.