A report published this morning by the Scottish Federation of Housing Associations (SFHA) — “Bedroom Tax: early impacts” — suggests that tenants across Scotland are having to find an average of £11 a week more for rent because of the “bedroom tax”. The research into the impact of the tax so far has found that social landlords were already seeing dramatic increases in rent arrears. They’d also seen many applications for emergency financial help within weeks of the start of the reforms.
The SFHA’s chief executive, Dr Mary Taylor, said the reforms were exacerbating the challenges faced by the social rented sector. Scottish government funding for investment in new affordable homes had already been cut by over half. She believes the survey of social landlords will highlight the case for funding from the Scottish Government.
Dr Mary Taylor
Chief Executive, SFHA
Speaking at a conference entitled Reform or Re-Form in Glasgow today, she told leaders from across the social housing sector the SFHA had been “surveying housing associations and co-operatives across Scotland about their experiences of helping tenants who cannot meet the shortfall created by the under occupation sanction to access discretionary housing payments (DHPs). This is one of the best measures of the early impact of the “bedroom tax” on tenant incomes and the finances of housing associations. We are seeing affected tenants race to access the limited £10 million available in Scotland[i] for discretionary payments, which is unsurprising given the “bedroom tax” alone is expected to reduce Housing Benefit income for claimants by nearly £50 million in 2013/14, according to DWP’s own estimates.
“Our research also shows that housing associations are already experiencing an increase in rent arrears, since the introduction of the new welfare reforms. This could compound the already significant financial challenges faced by social landlords, since the Scottish Government cut funding for investment in social housing by 53%. If housing associations and co-operatives are going to be able to meet government targets to build new, energy efficient homes, then the Scottish Government must restore the funds cut from social housing. New supply of affordable social housing cannot be sustained on less than half the funds originally budgeted.”
The report shows that the shortage of smaller properties means that few tenants have the opportunity to avoid the under-occupation restriction by downsizing, and are left with having to find an extra £11 per week, on average, for rent. It adds that the situation was likely to worsen, with nine in 10 landlords surveyed anticipating rents will increase in in the coming financial year.
Margaret Burgess MSP
The Scottish Government’s Minister for Housing and Welfare, Margaret Burgess MSP, believes the impact of welfare reform for both tenants and landlords in Scotland has been significant. “Despite Westminster’s cuts to our capital budget,” she said, “the Scottish Government has taken every opportunity to increase its investment in housing. By the end of April we had allocated £200 million additional funding for housing supply, bringing total investment to almost £860 million in the three years to March 2015. This substantial boost to funding will support jobs in the construction sector and provide many more sustainable homes. I welcome the steps SFHA members have taken to bring forward projects to make use of these additional resources so that more homes can be delivered as quickly as possible.”
In the view of James Tickell, Director of Campbell Tickell, a consultant on the housing sector, these are tough times for housing associations, “but tougher by far for the tenants and communities they serve. Good governance is vital at such a time – Boards need to be risk aware and strategic, but at the same time grounded in the reality of everyday life. The decisions they make can affect the lives of thousands, hopefully for the better, but sometimes not. Board membership is a serious job, needing serious skills and commitment. New kinds of partnership between Board members and senior staff are emerging, with strong challenge matched by strong support, and better co-working on core issues. There is a real momentum to the governance journey of housing associations in Scotland, and the SFHA will have a key role in maintaining direction of travel and momentum.”
In a statement, the Department of Work and Pensions said that it was working with agencies on putting the right budgeting support in place for those that needed it. It added that there were many alarmist claims about benefit changes but the facts are that the reforms will improve the lives of some of the poorest families and universal credit will make three million households better off.
