Housing organisations and charities have expressed growing concerns over the Government’s welfare reforms and the so-called ‘bedroom tax’ in particular. The latest research comes from the Scottish Federation of Housing Associations (SFHA). It shows that rental income for associations across Scotland could be at risk as a result of the welfare cuts for tenants. The organisation warns that this could threaten both services to tenants and the ability to build much needed homes.
The report says that the vast majority of housing associations and co-operatives in Scotland see welfare reform as a threat to tenants’ incomes, and consequently a risk to rental income. Nine out of ten housing associations and co-operatives in Scotland predict that rent arrears will rise as a result of the introduction of Universal Credit. The SFHA is concerned that non-payment risks eroding housing associations’ income and their capacity to continue providing vital services for low income and vulnerable people in Scotland.
Dr Mary Taylor, the SFHA’s Chief Executive, explained that tenants in the affordable social housing sector would face real hardships as a result of welfare cuts, which will impact upon vulnerable people and those living on low incomes. “This measure doesn’t just target the unemployed,” she said. “It will hit people in low paid work as well as the disabled – people who are already struggling to get by at a time when fuel and food costs are on the rise and jobs are scarce. At worst these changes may result in an increase in homelessness.
“The under-occupancy penalty (“bedroom tax”) is unfair on tenants. Any increase in rent arrears could put funding for housing associations and co-operatives at risk, with a knock-on effect on their ability to build the homes that are urgently needed today.”
The research suggests that many tenants will have difficulty in finding the funds to pay the under-occupancy sanctions, which can amount to an additional £600 a year. These cuts are estimated to impact upon some 105,000 Scottish households. Although the SFHA research shows that housing associations and co-operatives are supporting tenants to downsize where possible, there is a lack of smaller and especially one bedroomed properties in the affordable social housing sector.
These concerns are also reflected by work carried out by the Scottish Council for Voluntary Organisations (SCVO). Its new survey of charities suggests that “fear and ignorance collide to create chaos” in the wake of the welfare cuts. It reports that a lack of awareness and a negative public attitude towards those on benefits are major obstacles for charities taking on welfare reform.
More than three quarters of the charities, including advice bodies, older people’s charities, youth groups, local mental health support projects, housing associations and disability groups from across Scotland, did not feel there was a good level of service for benefits and welfare advice in their local authority areas at present. And nine out of 10 of the charities said that they expect to see more people turning to them for help this year.
Martin Sime, Chief Executive of the SCVO, explained that “a welfare system that leaves people broken and scared is a wolf in sheep’s clothing. While the general public remains in the dark about the devastating impact of welfare cuts, the outlook for people living in poverty and fear in Scotland is bleak.
“It’s left to charities and voluntary organisations across Scotland to pick up the pieces, but there is also a job to be done in bringing this issue out into the open so that the devastating impacts of cuts are not conveniently swept under the carpet.”
There are also concerns that the reforms may not lead to the savings the Government expects. The leading housing charity, Shelter Scotland, believes it has evidence that the ‘Bedroom Tax’ will cost the taxpayer in Scotland’s cities more money, not less – despite assurances from the Westminster Government that it will save money.
The charity points out that the tax will force those who can’t afford the shortfall to downsize or run up arrears. It believes that, as a result of the chronic shortage of one-bedroom social houses, many will have to turn to the private rented sector. But rent for a one-bedroom property in the private sector is on average much higher than rent for a two-bedroom social property. This would leave the tax payer with a bigger bill to pay as the newly private tenants would qualify for full Local Housing Allowance (LHA) as they would no longer be assessed as under-occupying.
Graeme Brown, the organisation’s director, described the ‘bedroom tax’ as ill-conceived. “The simple fact,” he explained, “is that there are just not enough one-bedroom social homes for people to downsize to. This is going to force households to either make up the shortfall themselves, run up arrears and face possible eviction or move into the private sector where rents are much higher.
“It’s a no-win scenario. The householder loses their home and the public purse has to pay more to help with their housing costs in the private rented sector. It’s time the Westminster Government reversed this ‘draconian’ reform and sent the bedroom tax to ‘never-never land’ where it belongs! That is why I am urging Scotland’s Housing Minister Margaret Burgess MSP to set up an emergency summit of social landlords to agree measures for protecting Scotland’s tenants from the ‘Bedroom Tax’.”