Friday 25 July 2014

Shock news: Bedroom Tax isn't working(!)

I'm signed up with to receive alerts of any press releases relating to social security matters: when they publish reports they are normally keen to let people know straight away. Oddly enough, though, they made no mention of a report they published on 15th July. The report's name is 'Evaluation of Removal of the Spare Room Subsidy: Interim report'. The 'Spare room subsidy' is, of course, what other people call the 'Bedroom Tax'.

The report is not an opinion document: it just gathers facts and presents them. The facts, though, are damning. It's not surprising that the government wasn't very happy about it.

(Remember, first, that what the bedroom tax does is this: in effect, it reduces the amount that counts as rent for Housing Benefit purposes by 14% if you have a 'spare' bedroom, or by 25% if you have two or more 'spare' bedrooms. If you want more details, check out my information on it at

The report found that five months into the scheme, only 41% of tenants had paid the full shortfall: 39% had paid some, and 20% had paid nothing at all towards the bedroom tax.

For those who did manage to pay some or all of the increase, how did they manage this?
57% of claimants reported cutting back on housing essentials;
26% said that they had had to borrow money (mostly from family and friends, but also using credit cards and payday loans);
10% had used savings;
9% had been given money from family members;
Let's just stop there for a moment, and note, firstly, that you're in trouble if you've got no family members with spare cash, and, secondly, that those with savings will soon not have any.

Moving on again, what about taking the government's suggested route, downsizing to a suitable property. Unfortunately, the report records that only 4.5% of affected tenants have done this. But maybe this is just because people are reluctant to move? Well, no. It turns out that in local authority areas where only a few people are affected by the bedroom tax, many more (up to 16%) are able to downsize.  In other words, as the report puts it, 'this suggests that landlords with the highest proportion of affected tenants will have more difficulties in meeting the demand for downsizing'.

Furthermore, it is reported that although 19% of affected tenants had registered for downsizing, social landlords said that 'they had not yet been able to accommodate most of those who wanted to move to a smaller home'.

Unsurprisingly (at least to me) only 1.4% had moved to the private rental sector; where the discrepancy between the rent charged by the landlord and that met by Housing Benefit tends to be even higher. Don't forget, for example, that single adults under 35 can only get enough Housing Benefit to cover living in a room in a shared house.

Apart from there being nowhere to move to (as we've now established), why didn't people want to move? Many of the reasons are easy to imagine, but here's one that hadn't occurred to me (nor, I imagine, to the government): 'knowing that they would soon cease to be affected by the [bedroom tax] - for instance because a child would turn ten or 16 and would require their own room'. Yes. It makes lots of sense to move to a smaller property when in a year's time you'll be entitled to the home you've just left...

The report also looked at of Discretionary Housing Payments (DHPs), the extra housing benefit available for claimants with additional needs, who ask for it, and whose requests are granted by their local authorities. A key concern raised was that some claimants were refused because disability benefits they were getting  (i.e. Disability Living Allowance, Personal Independence Payment, etc) were treated as extra income that reduced their need for help. A further concern was that more than half (56%) of the claimants surveyed who had not applied for a DHP were unaware of them.

Finally, what about the main declared purpose of the bedroom tax (freeing up properties for large families who needed them)? 41% of social landlords surveyed said that they were having difficulty filling their larger properties. Landlords and local authorities also reported that waiting times for smaller properties had increased: don't forget that many of the people on these waiting lists will be there precisely because they are trying to do what the government wants them to do, downsize, and therefore will be forced to pay the bedroom tax for longer.

What do the main political parties want to do about the bedroom tax?

The Conservatives want to keep it, obviously, although even some of their number are expressing concerns. Somewhat startlingly (to me, anyway), Norman Tebbit has come out against it. The Huffington Post, for example, reports his comments: 'I worry about what Labour chooses to call the bedroom tax. Because so often what is a spare room is in fact a vital part of the looking after an elderly person. It enables their relatives to come, it enables carers to be there...I think we introduced that rather without thinking it through very well, and I think that's costing us.'

Labour want to scrap the tax: in fact they have an online petition about it. It's only fair to point out, though, that the previous labour government brought in the first bedroom tax, by limiting Housing Benefit to claimants renting in the private sector according to how many bedrooms they needed (amongst other factors). It was called the 'local housing allowance', was brought in in 2008, and is still in force. Furthermore, Hansard clearly indicates that it was the Labour government's intention to extend something similar to the social rented sector.

The Liberal Democrats have recently stated that they are committed to reform the bedroom tax. They say that they plans 'will see those already in the social rented sector only lose their benefit if they are offered a suitable smaller home and turn it down' and 'would also permanently exempt disabled adults'.  This isn't in line with their previous statements. The Huffington Post eloquently illustrates six opportunities when Nick Clegg could have opposed the bedroom tax but, instead, defended it. The Lib Dems don't exactly have an perfect record of keeping pre-election promises. 

Take your pick...

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