Bedroom tax bill could force rents up for social housing tenants

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Move to outlaw bedroom tax evictions will have a negative impact on the very people it seeks to protect, according to a leading housing group.

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23rd January 2014 by TFN Staff 0 Comments

THE Scottish Federation of Housing Associations (SFHA) made the call as a private members bill to protect social housing tenants from eviction was lodged by Labour MSP Jackie Baillie.

Maureen Watson, head of policy at the SFHA, said while Baillie’s proposal was motivated by the best intentions, it would in practice exacerbate the already serious impact of welfare reforms on housing associations and cooperatives across Scotland.

Instead she called on the Scottish Government to mitigate the full impact of the tax financially, ending the need for legislation.

The bill aims to amend the Housing Act 2001 preventing social landlords using bedroom tax rent arrears as grounds for eviction, restricting them obtaining payment decrees for these types of debts.

However the SFHA argues that this leaves landlords to pursue them as an ordinary debt, which, in effect, may never be clawed back, and therefore has the potential to force rents upwards for all tenants.

In a report out this week, the SFHA said the overall cost of the bedroom tax for Scottish housing associations and cooperatives will be £79.1 million over three years, a cost which was never built in to the business plan of any housing association.

Watson said: “Nine months in, the actual costs to landlords of the implementation of under occupation restrictions are becoming clearer.

The bill aims to amend the Housing Act 2001 preventing social landlords using bedroom tax rent arrears as grounds for eviction

“If the burden of the bedroom tax was to be fully funded by the Scottish Government it would, at a stroke, sweep away the main areas of concern with the proposed bill, and indeed there would be no need for the bill to be progressed further.”

However Jackie Baillie said while she recognised  the concerns raised by the SFHA, she said the  Scottish Government had refused to fully mitigate the impact of the bedroom tax.

“The Scottish Government could remove this unfair tax at a stroke by spending just a fraction of their budget to protect the investment budgets of councils and housing associations,” she said.

“Indeed, if the Scottish Government agreed to provide the £50m there would not be any need for my bill.”

The Scottish Anti-Bedroom Tax Federation secretary Gail Morrow said she fully backed the bill.

She rejected the call that housing associations were under pressure saying they could mitigate the costs by using reserves as many were “very profitable”.

The Scottish Government could also do more, she said.

“We support the measures outlined in this bill and welcome any respite for those affected,” she said

“This campaign has already won over £40m from Holyrood to help mitigate the bedroom tax."

“If the SNP are truly against this Tory tax, then they could stand against it and allow us to work together to defeat this callous attack on social housing.”

It comes as Labour criticised the latest figures showing an “alarming level” of underspend in the discretionary housing payments’ (DHP) budget, the financial support for people struggling to pay their rent because of the bedroom tax.

DHPs are made by councils to housing benefit claimants who qualify for support.

Figures show that 45,772 households in Scotland claimed almost £15.4 million during the eight-month period from April to November last year, with an average award value of £336.

However Labour said that more than half of the overall budget – £18.3m – is still to be allocated before the end of the financial year on 31 March.

“While we welcomed the extra £20 million allocated by the Scottish Government in October, this was too little too late for vulnerable council and housing association tenants,” said Baillie.