Housing cuts as “damaging as bedroom tax”

Bed tax

Housing sector - as well as their clients - will struggle with new cuts say leading bodies 

9th July 2015 by Robert Armour 0 Comments

New housing-related benefit cuts announced by George Osborne could have a similar effect to the bedroom tax, charities have warned.

Housing bodies say they fear more people could be pushed into homelessness and poverty after Osborne announced measures to cap benefits as well as restrict 18-21 from claiming housing benefit.

The chancellor said yesterday in his Budget statement no family outside London will get more than £20,000 in benefits paid to them – a reduction of £6,000 from the previous cap.  

At the same time he announced young people will be excluded from claiming housing benefit from 18-21.

Latest figures from the Department for Work and Pensions (DWP) shows 800 households in Scotland are subject to the current benefit cap, with housing groups saying the new limit is likely to more than double that number.

Mary Taylor, chief executive of the Scottish Federation of Housing Associations (SFHA) said she feared the measures will have a detrimental impact on communities directly, and housing associations indirectly

Short-sighted cuts like this do nothing to fix the root cause of the housing benefit bill - Graeme Brown

“The reduction in the benefit cap from £26,000 to £20,000 in Scotland will hit those who had already had their benefits capped hardest," she said. 

“Some of these households will be women and their children fleeing domestic violence who are forced to live in temporary accommodation.

“A Scottish Parliament Committee report recently highlighted existing inequality for women, which has been aggravated by the reforms."

Freezing working age benefits for four years and restricting tax credits and Universal Credit to two children, affecting those born after April 2017, will only serve to make it harder to escape the poverty trap, she said. 

“The Federation is wholeheartedly against removing the automatic entitlement to housing benefit for 18 to 21-year-olds as it will have an adverse affect on the life chances and employment prospects of 28,000 plus claimants in this group, over half of whom have young families of their own as it could, for many, place their homes at risk.

“Such cuts have the potential to be just as damaging as the bedroom tax.”

Graeme Brown, director of Shelter Scotland, slammed the move to restrict housing benefits for 18-21 year old as “shameful” and “short sighted.”

He said: “Short-sighted cuts like this do nothing to fix the root cause of the housing benefit bill – which has grown due to the chronic shortage of affordable homes, a growing reliance on the private rented sector and sky-high rents. 

“That’s why the reduction in the benefit cap doesn’t make sense as it will drive those affected by it out of their homes for not being able to pay their rent, in effect, clearing out people who rely on housing benefit from high rent areas.

“In Scotland, we need to build at least 10,000 new homes for social rent each year for the foreseeable future to tackle the shortage of affordable housing. 

“By investing in affordable housing, not only would this bring hope to the 150,500 households on council waiting lists, it would also gradually reduce the housing benefit bill, which in turn would leave more funds available for investment in housing.”