100 day survey reveals pressures on councils from bedroom tax
A survey of all local authorities in Scotland carried out by COSLA, reveals the very significant financial pressures being placed on councils because of welfare reform changes to housing benefit by the UK Government after their introduction 100 days ago.
In Highland, as at 31 March, 724 tenants affected had rent arrears, with the total value of arrears at £173,491. By 28 June, 821 tenants were in arrears, with total arrears of £198,470. The introduction of the spare room subsidy has clearly increased both the number of tenants in arrears and the level of debt, a spokesman for The Highland Council confirmed.
Under occupancy changes made under the Welfare Reform Act 2012, which came into effect on 1 April, reduce housing benefit by 14% for those with one ‘extra’ bedroom and by 25% for those with 2 ‘extra’ bedrooms. These changes apply to councils tenants and tenants of registered social landlords – the so called ‘bedroom tax.’
The changes are already leading to sharp rises in rent arrears. Of that rent now due to be collected from tenants affected, 60% of councils reported receiving 40% or less and 80% of councils reported receiving 50% or less (based on responses from 20 of the 26 councils with their own housing stock).
With the exception of one, all local authorities with their own housing stock reported an increase in rent arrears with three quarters of councils reporting that non-payment of rent now due following under occupancy changes, is directly responsible for the rise in arrears.
There has also been a sharp rise in requests for Discretionary Housing payments for those in particular housing need. Scottish councils received over 22,000 requests by the end of May. For most councils, this is over 4 times the numbers of requests received in the same period last year. At the end of May, DHPs had been awarded to 44% of applicants, with 22% of the £10m funds made available in Scotland for DHPs by the Department for Work and Pensions, already spent.
Commenting on the findings of the survey, COSLA President, David O Neill said: “It will be exactly 100 days tomorrow since the under occupancy changes were introduced and I derive no pleasure whatsoever in seeing that our predictions about the dire consequences of this ill-conceived policy are starting to be borne out.
“We always said that any saving to the UK treasury would be reflected in additional costs and financial pressures for tenants and councils. Unfortunately that is exactly what is now happening.
“Councils are being required to reduce housing benefit payments only to see rent arrears rise sharply and tenants experiencing distress. At the same time as housing services are being undermined by a threat to our income streams.
“The UK Government need to urgently reconsider this horrendous policy and I shall be re-emphasising this yet again when I meet Lord Freud at the end of this month.’’
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