New research on under-occupation reveals full impact of Welfare Reform Cuts
New research on under-occupation reveals full impact of Welfare
Reform Cuts
New research published today by the Housing
Futures Network, paints a vivid picture of the likely impact of the
Government’s ‘bedroom tax’ on local neighbourhoods. The Government
is proposing to reduce housing benefit for working age social
housing tenants deemed to be under-occupying their homes in
accordance with a very strict bedroom standard, an average cut of
£14 per week for those affected.
The research, co-ordinated by the Cambridge
Centre for Housing and Planning Research, looks in detail at the
effect of the cuts in four neighbourhoods across the country –
inTranmere/Rock Ferry in Wirral, Lewisham in London,
Chorley in Lancashire and Low Ford in Sunderland.
In a briefing issued to MPs ahead of
Wednesday’s House of Commons debate on amendments to the Bill, the
HFN has revealed:
- The reductions will have
a significant impact on household incomes, affecting some
of the poorest in the country. For single people on Job Seekers’
Allowance this reduction – of around £14 per week - would represent
nearly 30% of disposable income, after allowing for other
household bills.
- The cuts will have a
significant impact on tenant behaviour. Contrary to
Government expectations, up to a third of affected tenants may seek
to move. However in most areas, social landlords have a very
limited supply of one bedroom properties, and in some
neighbourhoods, it would take between six and eight years to
accommodate those looking to downsize. A more likely move is into
the private rented sector, where rents and benefit levels are
higher – which could cost the Government more.
- Those who can’t move or want to stay
put will be in danger of running up rent arrears. Over
four in ten households affected could end up in arrears. At the
neighbourhood level this will have a very significant impact on
local management budgets, prejudicing the delivery of important
services. Scaled up to national level social housing providers
could face an annual loss of income of £171 million – the
equivalent of the grant required to build over 8,000 new affordable
homes each year.
Speaking on behalf of the HFN, Hugh Owen
(Director of Policy and Communication at Riverside) said: “the
research shows the devastating impact this proposal is likely to
have on local communities and economies. The policy is poorly
targeted, meaning that the wrong people could move. Those who need
a bit of extra space and flexibility to support family life will
have to move or face a significant cut to their income, whilst
older people wanting to downsize, won’t get a look in”.
The Government’s main aim in introducing these
changes is to cut the benefit bill, but Hugh Owen warned “the
Government’s savings depend on tenants staying put and facing the
cuts, whereas our research shows that up to a third may move
instead, possibly more when arrears start to mount. Faced with a
lack of smaller social housing, some may have no choice but to move
into the more expensive private rented sector where, ironically,
rents and benefit levels are higher’.
The HFN is calling on MPs to accept an
amendment made to the Bill by the House of Lords in December. This
would ensure that eligible tenants would receive benefit to cover
the rent of a spare bedroom above the Government standard, unless
suitable alternative accommodation for downsizing is available.
About the Government’s
proposal: The Welfare Reform Bill will enable the
Secretary of State to introduce, via regulations, size criteria for
working-age housing benefit claimants living in the social rented
sector.
It is the Government’s intention that from
2013, social housing tenants will have their benefit restricted
depending on their household circumstances and the size of the
accommodation they occupy. This will be based on a comparison of
household entitlement – defined by a “bedroom standard” - to the
size of the dwelling size occupied. A standard percentage reduction
will be applied to housing benefit of 14% for tenants with one
spare bedroom and 25% for those with two or more.
About the Housing Futures
Network:The Housing Futures Network was
established in 2008 to examine the future of social housing in the
UK. Its members are four of the largest housing providers in the
country; Affinity Sutton, Gentoo, Places for People and
Riverside.