More than 1,750 children in Croydon will be hit by the Government's latest cap on welfare benefits, the council has warned.

Altogether 653 households in the borough are set to lose out for the first time when the cap reduces to £23,000 from £26,000 next April - a change that Croydon Council has predicted may leave hundreds of families homeless or struggling to make ends meet.

Dozens of those might even have to move out of London, bosses believe.

But while the authority believes it can help people hit by the cap for the first time, according to a report prepared for a cabinet meeting next week, the forecast is far bleaker for those already affected by the current benefit cap.

Out of the 305 families affected by the £26,000 cap, which was introduced in 2013, 215 face a "significant risk of eviction" under the latest round of cuts, and will require council intervention to avoid them becoming homeless, the report says.

These families face further cuts of £58.31 per week to their benefits.

The council expects that 90 of these families will be forced to move outside of London and the south east to find affordable accommodation.

Councillor Alison Butler, cabinet member for housing, said there was some emergency funding to deal with those affected by the cap in emergency cases, but that the council would "start working with families before the changes come in" to minimise impact.

She added: "We don't want to frighten people, but we don't want to cover up." For some families, moving out of the borough may be the only option, she admitted.

Conservative Chancellor George Osborne has committed to slashing £12bn from the national welfare budget by 2020.

Chris Philp, Conservative MP for Croydon South, who in July voted in favour of the reduced welfare cap, said: "This is not the first time the benefit cap has been introduced, and we had these kind of predictions then, and they proved to be unfounded. I think it's partly political scaremongering by the council.

"The truth is, the way to lift poverty is through employment and work."

A Croydon Council team dedicated to helping those affected by welfare cuts has dealt with nearly 6,000 people since 2013.

Other changes set to be introduced before 2017 include reducing the amount of time possible to backdate housing benefit claims from six months to one month, and limiting child benefit payments to two children.

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Chris Philp, Conservative MP for Croydon South

Jad Adams, director of homeless charity Croydon Nightwatch, believed the planned cuts would only exacerbate what he saw as a growing housing crisis in the borough.

He said "The great cause of homelessness in Croydon is a lack of affordable housing, and any reduction in benefits make landlords even more reluctant to take tenants who are receiving benefits, because the tenants would have to make up the shortfall."

Fatima Koroma, who runs the Croydon Food Bank, said: "Every time they do something with benefits, the numbers go up for us. It was the same in 2013 when this first happened.

"It's going to impact a lot more people. I'm more concerned about the families - they're already affected and it's just another nail in the coffin. Everyone's just waiting to see what's going to happen."

A Department for Work and Pensions spokesman said: "The benefit cap provides a clear incentive for people to move into work and ensures we have a welfare system that is fair for those who need it and those who pay for it.

"We continue to spend around £24bn on Housing Benefit each year and have already provided local authorities with £500m of funding to support people transitioning to our welfare reforms, with a further £800m to be provided over the course of this Parliament."

Will you be affected by the benefit cap? Get in touch on 0208 722 6388 or email