A large proportion of tenants hit by the bedroom tax have so far failed to pay the resulting shortfall in their rent.
Several of the UK’s largest housing associations have this week revealed thousands of tenants have not covered their rent since the controversial policy was introduced on 1 April.
The bedroom tax cuts the benefit payment of working-age social housing tenants with spare bedrooms. In some parts of the country, up to half of affected tenants have not paid anything at all to cover the average £14-a-week shortfall.
This has sparked fears that landlords’ income streams and ability to borrow cheaply to build new homes could be hit if the trend continues.
Liverpool-based Riverside Group said around half of its 6,193 affected households receiving full housing benefit have not paid anything at all to cover the shortfall, while a quarter contributed something but did not pay their rent in full. Just one in four affected tenants paid the full amount.
James Tickell, director of consultancy Campbell Tickell, said: ‘These are the first signs of a significant threat to housing associations’ income streams.’
Hugh Owen, director of policy and communications at 54,000-home Riverside, said: ‘Such a significant amount of people paying nothing proves there is a real issue of affordability.’
He added that some of the non-payment may be due to delays in setting up direct debits or to tenants awaiting decisions on discretionary housing payments and that a clearer picture will emerge after several months.
Guinness Partnership said a third of 3,000 affected tenants have not met the shortfall. Simon Dow, chief executive, said: ‘If a third of our residents are not able to pay the whole of their rent, then obviously there would be a significant increase in arrears… as well as a crisis for the household.’
Yorkshire-based, 25,000-home Incommunities said 601 of 2,414 affected households had not paid anything to cover the shortfall. Wakefield and District said 42 per cent of 5,000 affected households have not paid their rent, while two-thirds of the 7,350 tenants of Glasgow and Cube housing associations had underpaid.
Spectrum Housing Group said 259 of 1,151 affected households failed to pay any of the shortfall at a cost of £17,000 in income - a result it described as ‘better than expected’.
Yesterday the government announced it is extending six pilot schemes examining the impact of direct payment of housing benefit to tenants under universal credit. This will give the pilots an extra six months to assess how the bedroom tax and other welfare reforms are influencing rent arrears.
Tuesday, August 27, 2013
DHP top up
A thirty five million boost to discretionary housing payments will not relieve the worst effects of the bedroom tax, housing sector figures have warned.
The government announced the additional DHP funding – which provides cash for local authorities to help those affected by the policy pay their rent – on Tuesday.
The same day, a legal challenge over claims the policy discriminates against disabled people was dismissed by the High Court.
Judges ruled that its effect on disabled people was not disproportionate, in part due to DHP provision.
However Birmingham Council, an interested party in Tuesday’s case, said the additional cash ‘merely papered over the cracks’.
John Cotton, cabinet member for social cohesion and equalities, said: ‘At the current rate our original allocation of £3.8 million will be fully spent by around November.’
Abigail Davies, assistant director of policy and practice at the Chartered Institute of Housing, said: ‘Discretionary housing support is meant to be for short-term issues not for situations that will be with people for life.’
Sam Lister, policy officer at the CIH, added that the announcement of extra cash could make it harder to overturn Tuesday’s ruling on appeal because the judgement said the original DHP level was enough to stop the policy being disproportionate.
Tuesday’s announcement takes this year’s funding for DHPs up to £185 million, due to drop to £120 million next year.
Emily Bird, policy leader for the National Housing Federation, said: ‘The provision of additional DHP doesn’t change the fact that the policy is unworkable and unfair.’
Lord Freud, minister for welfare reform, said the additional DHP funding would help councils offer support to vulnerable tenants.
Inside Housing revealed last month that English councils received more than 13,000 extra applications for DHPs in the month following the implementation of the bedroom tax.
The government announced the additional DHP funding – which provides cash for local authorities to help those affected by the policy pay their rent – on Tuesday.
The same day, a legal challenge over claims the policy discriminates against disabled people was dismissed by the High Court.
Judges ruled that its effect on disabled people was not disproportionate, in part due to DHP provision.
However Birmingham Council, an interested party in Tuesday’s case, said the additional cash ‘merely papered over the cracks’.
John Cotton, cabinet member for social cohesion and equalities, said: ‘At the current rate our original allocation of £3.8 million will be fully spent by around November.’
Abigail Davies, assistant director of policy and practice at the Chartered Institute of Housing, said: ‘Discretionary housing support is meant to be for short-term issues not for situations that will be with people for life.’
Sam Lister, policy officer at the CIH, added that the announcement of extra cash could make it harder to overturn Tuesday’s ruling on appeal because the judgement said the original DHP level was enough to stop the policy being disproportionate.
Tuesday’s announcement takes this year’s funding for DHPs up to £185 million, due to drop to £120 million next year.
Emily Bird, policy leader for the National Housing Federation, said: ‘The provision of additional DHP doesn’t change the fact that the policy is unworkable and unfair.’
Lord Freud, minister for welfare reform, said the additional DHP funding would help councils offer support to vulnerable tenants.
Inside Housing revealed last month that English councils received more than 13,000 extra applications for DHPs in the month following the implementation of the bedroom tax.
The cost of welfare
The cost of welfare is set to rise by an extra £1.5billion a year due to the rocketing cost of rent and the hated Bedroom Tax.
Figures from the Commons library show the amount of housing benefit paid to private landlords will rise from £7.9billion to £9.4billion.
And it is forecast to increase still further over the next three years.
Labour MP Karen Buck, who unearthed the figures, said: “Despite the bluster, the truth is that in the Tories’ low-wage, high-rent Britain, housing benefit has risen rather than fallen, with the biggest pressure coming from working people needing help with housing costs.”
The Tory-led Coalition said it would cut the welfare bill but housing benefit costs have risen sharply as private landlords have pushed up rents.
At the same time some councils have been forced to rehouse victims of the Bedroom Tax from cheaper council housing into more expensive private rental properties. Labour said the policy was the “economics of the madhouse”.
The tax, introduced in April, docks the housing benefit of anyone living in a council house with a spare bedroom.
Families either have to pay at least £14 a week more or find alternative accommodation.
But putting them up in privately rented homes is proving more expensive for local authorities.
There are now 5,072,264 people in the UK claiming housing benefit, a rise of more than 40,000 on this time last year.
To add to the misery, tenants have seen their rents rise by an inflation busting 3% on average in the past 12 months.
Figures from the Commons library show the amount of housing benefit paid to private landlords will rise from £7.9billion to £9.4billion.
And it is forecast to increase still further over the next three years.
Labour MP Karen Buck, who unearthed the figures, said: “Despite the bluster, the truth is that in the Tories’ low-wage, high-rent Britain, housing benefit has risen rather than fallen, with the biggest pressure coming from working people needing help with housing costs.”
The Tory-led Coalition said it would cut the welfare bill but housing benefit costs have risen sharply as private landlords have pushed up rents.
At the same time some councils have been forced to rehouse victims of the Bedroom Tax from cheaper council housing into more expensive private rental properties. Labour said the policy was the “economics of the madhouse”.
The tax, introduced in April, docks the housing benefit of anyone living in a council house with a spare bedroom.
Families either have to pay at least £14 a week more or find alternative accommodation.
But putting them up in privately rented homes is proving more expensive for local authorities.
There are now 5,072,264 people in the UK claiming housing benefit, a rise of more than 40,000 on this time last year.
To add to the misery, tenants have seen their rents rise by an inflation busting 3% on average in the past 12 months.
Four out of Five disabled individuals won't get DHP
Why will 4 out of every 5 disabled households will not be awarded Discretionary Housing Payment?
The reasons why are simple:
So 4 out of 5 disabled tenants will not be awarded DHP to pay for their bedroom tax
The reasons why are simple:
- 1. Government say there are 660,000 bedroom tax households in total
- 2. These 660,000 households get £500m taken away from them with the bedroom tax
- 3. 420,000 of these 660,000 bedroom tax households are disabled households
- 4. Therefore bedroom tax takes £318m from these disabled households.
- 5. Government gave councils £25m for bedroom tax DHPs
- 6. Government announced further (conditional) £35m of DHPs
- 7. Total bedroom tax DHP is £60m (£25m + £35m)
So 4 out of 5 disabled tenants will not be awarded DHP to pay for their bedroom tax
Money siphoned by corrupt council staff in Bedford
A COUNCIL which suspended 31 staff to investigate their behaviour only ended up axing five of them permanently.
Since the creation of Bedford Borough Council four years ago the behaviour of 31 staff was investigated at a cost of £250,000 to the taxpayer.
On top of the five subsequent dismissals, 12 employees went on to resign while a further three were later made redundant.
Only 11 of those who were investigated still remain employed by the council.
The £250,000 was spent on the salaries of the suspended staff who stayed on full pay while they were investigated.
In total 26 staff were paid to stay at home while under investigation, despite eventually being cleared of any wrongdoing.
A Bedford Borough Council spokesman said:
There are two reasons for suspension. The employee has committed an act of potential gross misconduct which means remaining in the workplace cannot be tolerated. Or, a disciplinary investigation may be impeded by the person remaining in the work environment.
Investigations are undertaken as speedily as possible. However, some are complex and therefore take longer. The staff concerned are not on gardening leave, they are suspended from work.
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