The hon. Lady makes a very valid point; one of the main absurdities of the housing benefit system is that there is so little incentive for local authorities, whether in London or across the country, because they can get the money back from central Government. That situation has to change.
Westminster council estimated the worst-case costs at £8.1 million, reflecting the expense of the long-term temporary accommodation contracts that the council was encouraged to enter into under the previous cap regime. Many would welcome the Government's implementing the new caps and mitigating the associated risks. In particular, places such as Westminster need the guidelines around local connection to be changed. Under the existing guidelines, local authorities affected by the caps are required to try to house people in their vicinity. I think that Westminster city council is particularly concerned that the courts will find against it if it tries to house families out of the borough, leading to additional costs and more uncertainty and family disruption.
The guidelines need greater flexibility, and the Minister must recognise that there are specific issues in London, for boroughs of all political complexions, that need to be thought through. We need to ensure that local authorities can, to an extent, house out of borough when it has not proven possible to find temporary accommodation in the area at the new capped rates.
There is much more that I would like to say, but I appreciate that other Members wish to contribute so I shall end my comments with these thoughts. Given that the proposals are due to come in over the next few months, in the run-up to the next financial year, I wish to say only that many Members on the Government Benches welcome the review of the housing benefit system, the flaws of which have been glaringly obvious to all of us who deal frequently with housing cases. I accept that there will be differences across the House as to how the changes should take place. If the case for change is successfully made, we will require a much closer working relationship with the boroughs, and clear and frequent communication with London Members, who will be receiving ever more letters from anxious constituents in the months ahead, so I hope the Minister will pledge to ensure that there is proper communication, which will be essential.
It is also vital that the most vulnerable in our communities are properly reassured. If they are not, we risk undermining the most compelling aspect of the case for reform, which is that the measures should primarily be about fairness, with the hard-working being rewarded and the truly vulnerable being properly and fully protected.