Bedroom Tax to cost us more when people are forced into private rented sector

LEADING housing charity Shelter Scotland says 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.

Its new analysis is released the day after the charity called on the Scottish Government to make £50million available to protect Scotland’s tenants from the Bedroom Tax.

Shelter Scotland says the Bedroom Tax – where people judged to be under-occupying by one bedroom will have their housing benefit slashed by 14 per cent – will force those who can’t afford the shortfall to downsize or run up arrears.  Due to the chronic shortage of one-bedroom social houses, the charity says 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.

Shelter Scotland’s analysis shows that on average in Edinburgh, the tax payer would pay more than £100 extra in LHA each month and more than £200 extra per month in Aberdeen. In Glasgow more than £100 per month extra, in Dundee it would be more than £50 per month extra and in Inverness nearly £100 per month more. (1)

The Bedroom Tax is set to hit nearly 100,000 households across Scotland from 1st April this year as a result of the UK Government’s welfare reform plans.

Graeme Brown, Director of Shelter Scotland, says:

“This analysis shows just how ill-conceived the Bedroom Tax is.

“The simple fact 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!”

Graeme Brown added:

“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.”

Yesterday Shelter Scotland issued a three-point plan asking the Scottish Government for:

1)    a guarantee that no-one should be evicted for Bedroom Tax arrears
2)    no-one to be deemed intentionally homeless if evicted for Bedroom Tax arrears (1)
3)    make up to £50million available this year to protect social landlords from bankruptcy

The charity also wants a legislative ban on evictions for bedroom tax rent arrears to be considered if no voluntary guarantee can be agree.

The Bedroom Tax is set to hit nearly 100,000 households across Scotland from 1st April this year as a result of the UK Government’s welfare reform plans.

Ends/

High-res info-graphic available for download from here.

Notes to Editors:

1.    Aberdeen: two-bed local authority property rent per week is £69.30 compared to £120.20 LHA for one-bed private property.   Edinburgh: two-bed local authority property rent per week is £87.79 compared to £114.20 LHA for one-bed private property.  Glasgow: two-bed GHA property rent per week is £63.25 compared to £90 LHA for one-bed private property. Dundee: two-bed local authority property rent per week is £63.60 compared to £76.15 LHA for one-bed private property. Inverness: two-bed local authority property rent per week is £65.76 compared to £88.85 LHA for one-bed private property.

2.    Social housing cost is most up to date average two-bed social sector property rent level. (Source: Individual local authorities and Scottish Housing Regulator http://www.scottishhousingregulator.gov.uk/publications/performance-tables-%E2%80%93-rents

Private housing cost is based on Local Housing Allowance rate for one bed property.  (Source: Scottish Government http://www.scotland.gov.uk/Topics/Built-Environment/Housing/privaterent/tenants/money/localhousingallowance/Figures-1/2012/april)

3.    Shelter Scotland provides expert support services, online advice and a free national helpline for everyone facing housing and homelessness difficulties. For advice and support visit www.shelterscotland.org or call 0808 800 4444.

4.    Spokespeople are available for interview – call the media office on 0844 515 2442. An ISDN line is available for broadcast interviews.

5.    Follow Shelter Scotland on Facebook – http://www.facebook.com/shelterscotland Twitter – http://twitter.com/shelterscotland

6.    Shelter Scotland believes everyone should have a home. We help people find and keep a home. We campaign for decent housing for all.

Contact: Shelter Scotland

Email: mediascotland@shelter.org.uk