As primary schools struggle to cope with the disruption caused to children, a council officer declares: 'To live in Westminster is a privilege, not a right'

Teachers at Gateway primary school, in Marylebone, central London, have noticed that anxiety about the introduction of a new housing benefit cap is beginning to unsettle some pupils.

"They come to me when it is a crisis. It is quite tragic. One girl ended up coming to my room every day to say, 'Miss, have you found me a home?'" said Maggie Schneider, the deputy head.

All pupils at the school set themselves a personal challenge each term. "Mostly it's things like learning times tables. She said her challenge was to get a home … She's eight years old. She shouldn't be worrying about that."

Since the start of the year, staff at primary schools across central London (which have a much more local catchment area than secondaries) have begun working with parents to help families avoid being evicted as the consequences of the reduction in housing benefit begin to be felt.

In Westminster, the borough most affected by the housing benefit cap, some schools could see up to 43% of pupils affected by the reduction in housing benefit, according to the council's preliminary forecasts, and across the borough 17% of primary pupils could be forced to move, internal data suggests.

Although the process is only just beginning, headteachers and school governors are concerned at the disruption and say that the process of trying to support families who face losing their homes is proving time-consuming for staff.

The cap on local housing allowance payments (the housing benefit paid to people in the private rental sector), which came into effect last month, is already causing an upheaval of families in central London, as parents who are no longer able to afford the rent on their family homes struggle to find alternative accommodation. Some families have already been forced into B&Bs or homeless hostels because the housing benefit they receive is no longer enough to cover their rent. Charities and local MPs say that over the next year, other families will be forced to leave the area, will crowd into smaller flats, or will try to meet the shortfall in rent by saving on food and heating expenditure.

Louisa Lochner, Gateway primary's head, said she believed a number of families had already left the school because they knew they would be unable to pay the rent once the housing benefit was reduced. As the school has no formal way of finding out in advance which families were affected by the cut, staff were often unable to track where families were moving to and contact was lost with former pupils very swiftly.

"It's very disruptive. We put a lot of energy into making sure our children succeed. When families leave, that knowledge of their families, their learning needs is lost," she said. "The whole process is very brutal. The sense of the unknown is very traumatising for everyone."

The cap was introduced by the government as a cost-cutting measure, in the context of growing unease about a steep rise in the size of the housing benefit bill. The measure only affects tenants renting flats in the private sector, and not those living in council properties, but with waiting lists for council flats stretching into many years, large numbers of families who are on low incomes currently rely on housing benefit payments to subsidise or cover private rents.

The government has capped all housing benefit payments at £250 a week for a one-bedroom property and a maximum of £400 for a place with four or more bedrooms. Within Westminster, there are almost no three- or four-bedroom flats available within that price range.

The philosophy behind the new cap seems to be "if you can't afford to live here, don't expect to live here". "To live in Westminster is a privilege, not a right, because so many people want to live here," a Westminster council press officer explains.

The measure is being phased in gradually, as tenancies expire, and the full impact will only be clear at the end of the year. Westminster council says it expects around 2,000 families will find themselves unable to afford their current rents, though some may be able to persuade their landlords to lower it.

But further pressure on claimants will be felt once the government's planned overall benefit cap at £500 a week is introduced in 2013, making some of Westminster's council homes unaffordable for people with large families, and increasing the proportion of London unaffordable to people on low incomes. The Chartered Institute of Housing warned this year that the measures could cause the migration of poor tenants to "benefit ghettoes" in cheaper areas of the country.

Six weeks into the new system, families whose tenancies are due for renewal are scrabbling to stay in the area. Schneider estimates that 50 of Gateway primary's 700 children are already affected. She said she was spending a lot of her time writing letters to the council's housing department, to see if she could help families to stay in the borough, near the school, so that the children's education was not disturbed.

"It is very time-consuming – if you think there are 50 pupils in this situation, and each case involves four or five chats with the families, long chats, and writing letters. I am spending less time with the children and more and more on this. But it is so important because if they are not settled they will not learn."

She said she had no confidence that the time she was spending writing letters was having much success. "There's been more movement in the school than I have ever seen. Usually our population is unbelievably stable," she said.

Housing officials from Westminster recently visited the school to advise those parents living in privately rented accommodation and receiving housing benefit. They were blunt in their explanation that there was little prospect of long-term support from the council to help them stay in their homes.

"There is nothing I can say that will guarantee long-term security. It is an unpleasant thing for me to say, but that is the reality of the situation," one housing officer told a group of about 19 mothers. "Westminster has accepted that there will be a 20% reduction of the school population across the borough as a result of these changes. It is a drastic change. We have been visiting schools and nurseries to get that message out. The changes are huge, they are going to have a huge impact."

Mick Beirne, a tenancy relations officer with the council, acknowledged that parents were "very anxious" and said his department was expected to be very busy for the next two years. The longer-term effect of the benefit would be a migration of families to parts of the capital that were more affordable, he said, and the profile of this part of London would inevitably change. "If people who are poor and cannot afford to live here move out, their places, their homes will be filled by people who can afford to pay the rents," he said.

Although the government had expected the measure to push rents down, allowing claimants to renegotiate their tenancy agreements with their landlords, he thought this was unlikely. "Westminster council said it would have the effect of reducing rents, but it has coincided with an economic downturn where people can no longer get ready credit for buying, so you have a massive increase in demand for private sector rentals. What we have seen in the past 12 months is that rents have increased dramatically."

Westminster's official position is that the measure will save £39m a year, and the area's overall profile will not be radically changed by the policy's implementation because out of the 110,000 homes within the borough, 25,000 are council or housing association-run, and not affected by the change; they deny that the policy will create a Paris-style "doughnut", with poorer people pushed to the city's outskirts.

They describe the analysis of the number of school places to be affected as "speculative" and a "worst-case scenario". For those who are unable to renegotiate rents, there is an annual £3.7m discretionary fund, to give temporary support to those who need to stay.

"This is not about moving the poor out of Westminster. We have 25,000 social housing units which are unaffected by all this," said Philippa Roe, Westminster's cabinet member for strategic finance.

Ben Denton, Westminster's strategic director of housing, regeneration and worklessness, said: "Is it fair for the state to provide subsidy for people to live in places that are the most expensive? Is it correct for the state to support anyone to live wherever they want to live? That's the philosophical question. If the answer is, anyone can live anywhere, then the state and the taxpayer has to subsidise that."

But for those who are affected, working out how and where to move is a fraught process. Parents said that staff at Westminster's housing department were rude and unhelpful when they went to seek advice about how to avoid eviction.

"They just look at you like you're a crazy person," one mother said.

"When you go there, they treat you like you are nothing," another told the housing officials.

Part of the anxiety stems from the fact that the council cannot offer emergency support to those families who are no longer able to afford their rent until bailiffs have arrived on their doorstep to remove them from the property.

Sarah Hacker, chair of Gateway primary's governors, said: "It is probable that the parents who have made the school aware of their problems resulting from the benefits cap are just the tip of the iceberg, as many are too embarrassed or ashamed to talk to anyone about their situation. The system is designed to deter rather than assist in the first place and then to assist only as a last resort, ie when the bailiff's letter has arrived and the family faces eviction. The system is complex, the local authority is swamped with homelessness applications, and parents, many of whom have English as a second language, find the process frightening and incomprehensible."

Until November, Amira, 39, was renting a flat near Edgware Road for £812 a week, with her four children. She is not currently working because her youngest child, aged one, is unwell and receiving treatment at Great Ormond Street hospital, and her rent was met in full by housing benefit payments. When her landlady realised that the family would no longer be able to afford the flat when the £340 weekly cap was introduced for three-bedroom properties, she decided not renew the tenancy.

"I went to Westminster council and they said everyone will get this letter. They said you must look for a property where the rent is lower. They gave me a website to look at," she said. She was unable to find any flat for less than the cap near enough to the school.

The bailiffs came to evict the family on 14 November, and Amira spent a day waiting with the family's belongings in suitcases and bin bags in a Westminster housing office, before they were rehoused, all of them sleeping in one room in a vast B&B near Hyde Park. (Leinster House hotel is a white stucco building, which once had a ballroom where the Queen is said to have attended a debutantes' coming-out dance; the building has been chopped up into around 90 rooms for the borough's homeless.) Several of the other families in the hostel were there because of the housing benefit cap, Amira said.

The council offered to rehouse the family in Dagenham, on the eastern outskirts of London, but because this would have meant moving three children into new schools, Amira refused the offer. At the beginning of January, they were given a new, temporary, flat, an hour's bus ride from the children's school. It is not clear how long they will be able to stay there.

Karen Buck, Labour MP for Westminster North, said her office was already busy with constituents facing the prospect of eviction. She said the vast majority of privately rented homes in Westminster would no longer be affordable to those who needed help with housing costs.

"This increases the risk of homelessness both in Westminster and elsewhere and reduces the ability of low-income, working people to stay near their work," she said. Most of the private tenants who relied on housing benefit would rather have the security and affordable rents offered by social housing, but could not get access to it because there was such a dearth of availability, she added. "Council housing is a wholly insufficient housing option for people who need subsidy to keep a roof over their heads."

A few miles away in Camden, Jo Stoakes has been living in an emergency hostel with her three children since she was evicted from her basement flat by her landlord last October, when it became clear that housing benefit reductions meant she would no longer be able to afford the rent. She was paying £525 a week, but the housing benefit, after the cap, would have paid only £340, and she was unable to make up the difference.

She shares a small room with her five-year-old daughter; her 16-year-old daughter and 20-year-old son have been allocated rooms, separately, further along the institutional corridor of this council-run shelter. The children were bearing up, she said, but the strain of sharing their kitchen and bathroom with the five other families on the landing and the uncertainty of having no permanent home, was making them miserable and Stoakes had no idea when she might be able to move.

The family was offered alternative accommodation, seven miles away in Enfield, on the north-eastern edge of London, but refused it, because it would have meant moving both younger children into new schools, at a particularly critical time in her teenager's education.

"I have a daughter in school in Camden and another in school in Islington. My older daughter is doing her GCSEs and the younger one loves her school," she said. Although the hostel is crowded, most of their belongings are in storage and the squabbling over food in the communal kitchen is exhausting, she would rather remain here than move to the outskirts of London, away from her family. "I'd never been there before. I would have been so secluded up there," she said. "I am trying to be happy and make the most of what we've got. I'd rather stay here for 10 years than move to Enfield."

This determination to stay near family and schools is echoed among other families who will soon face a sharp cut in their housing benefit. Azhar, 44, who lives with her four children in a tower block off Edgware Road, is currently paying £750 a week rent. Once the cap is applied to her claim this month, she will need to persuade the landlord to lower his rent to £400, or move out.

Although the housing benefit debate is often cast by the government and the Daily Mail as a drive to prevent large, workless families from being housed in expensive townhouses in Kensington, most people who face being moved live in relatively modest flats, which are nevertheless expensive because of their central location.

Azhar's seventh-floor flat is far from luxurious and is clearly overpriced – small, furnished with broken chairs and beds, complete with damp, rotting wood by the bathroom doors, and a faulty oven – it's also very likely that the landlord will be able to fill up the flat with four students or young professionals keen to be in central London, and get more than the capped amount.

"I can't move out of the area. My children's school is nearby," she said, adding that she was debilitated by a chronic heart condition, so was anxious to stay within walking distance of the school and her GP. She left her home in Iraq after the first war, when her home was destroyed during fighting, and moved to Germany. She has been living in this block for five years. "It is very stressful. I can't sleep," she said. "I changed my home a lot of times in my life. I can't do that again. I will go crazy."

At another recent coffee morning, at St Peter's school in Westminster, its deputy head, Samantha Halliwell sat with parents, as staff from Z2K, a London anti-poverty charity, explained what parents' options were. Halliwell said the school thought 30 out of the school's 65 families could be affected by the cut.

"One family has moved to Dagenham already, still bringing their child to school. They have to get up very early, which leads to a tired child, which is not good," she said.

One couple, with three children living in a two-bedroom flat near the school, who are expecting twins in May, said they would rather continue to live in the crowded flat where they are now, than move out to somewhere cheaper, away from family, school and work. The father made a quick sketch of how they planned to fit seven people into two rooms once the twins arrived.

Though there is evidence that families are moving, it is hard to track precisely where they are going. In Camden, housing officials say people have already moved from properties south of Euston Road (the more expensive part of the borough, closer to the the centre of town) to flats in the north of the borough, which are cheaper.

Helen Jenner, director of children's services for Barking and Dagenham council, said there had been a big influx of families to the borough, which might in part be down to the early effects of the housing benefit cap. The borough is separately experiencing a rise in the birth rate, but also expects to see many more families move in over the next year.

"We are mapping for growth. We expect significant growth," she said. "The main reason people are moving here it that rents are growing elsewhere. In the borough we had spaces in schools until three years ago. Now we are becoming a much more popular borough and we have no spaces in schools." The borough opened 10 new primary school classes last year, and expect to have to find space for another 200 reception class places in September 2012.

Romin Sutherland from Z2K has been advising families that they need to think about the next stage of benefit cuts when they think about leaving their homes, so that they do not find themselves moving a couple of miles out of Westminster this year, only to be forced by the overall benefit cap to move out further in 18 months. He and colleagues were telling families to think open-mindedly about "life beyond London" in other cities, such as Manchester.

"We don't want people to move to Wembley and then find that they can't afford to stay there either. This is the first wave of a tsunami, and the second wave will come with the overall benefit cap," he said.