£2.4m cost of housing 16 families

The government has capped local housing allowance

The government is spending more than £2.4m every year on housing for 16 families in London, an internal inquiry has found.

The Department for Work and Pensions (DWP) began the review after the case of an family of eight living in a seven bedroom house in Acton, west London.

Their rent of £2,875 per week was paid by housing benefit.

The inquiry found another 15 families living in six or seven-bedroom homes around paid for by housing benefit.

The properties include homes in the boroughs of Kensington and Chelsea and Brent.

'Ludicrous rents'

Minister James Purnell, who ordered the review, announced last month he would introduce a cap on local housing allowance (LHA) which was used to pay for the properties.

On Tuesday, he urged councils to prepare for the cap, which will come into force in April, stopping families on benefits being housed in properties with more than five bedrooms.

A DWP spokeswoman said: "In the interim, in order to avoid ludicrously high rents, DWP and the Rent Service will monitor such applications extremely carefully and advise authorities of rates on a case-by-case basis."

She said councils should help tenants in excessively large, expensive houses to find smaller properties or negotiate lower rent.

Mr Purnell said: "It was not fair that a small handful of people were living in houses that most working families could only dream about.

"That is why we acted quickly and decisively to make the system fairer. I am asking councils to work with us ahead of the April rule change, as this situation has to stop."