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Bedroom tax will be costly disaster, says housing chief

999 replies

vivizone · 31/03/2013 06:51

I don't understand how they can implement it. When a council tenant signs the tenancy agreement, if bedroom tax is not mentioned, is it not illegal to implement it at a later date?

I don't see how it is enforceable. Let's say a tenant refuses to pay/can't pay. They then get evicted - wouldn't the council still be obliged to house them after eviction, especially if they have children?

The whole thing is a mess. Why so many changes all at the same time?!

www.guardian.co.uk/society/2013/mar/30/bedroom-tax-disaster-housing-chief

Cost-cutting policy will push up benefit bill, cause social disruption and create widespread misery, say critics

Ministers came under new fire over benefit cuts last night as the independent body representing 1,200 English housing associations described the controversial bedroom tax as bad policy and bad economics that risks pushing up the £23bn annual housing benefit bill.

David Orr, chief executive of the National Housing Federation, said the tax would harm the lives of hundreds of thousands of people. It comes into force this week alongside a range of other tax and benefit changes.

"The bedroom tax is one of these once-in-a-generation decisions that is wrong in every respect," he said. "It's bad policy, it's bad economics, it's bad for hundreds of thousands of ordinary people whose lives will be made difficult for no benefit ? and I think it's about to become profoundly bad politics."

His intervention came as opponents launched nationwide protests against the tax, which will hit 660,000 households with each losing an estimated average of £14 a week.

Crowds gathered in London's Trafalgar Square yesterday to protest against the measure, and simultaneous protests were being held in towns and cities across the UK. One protester, Sue Carter, 58, from Waltham Forest, told the Observer: "I'm a working single parent with a tiny boxroom and now I'm faced with the choice between food, heat or paying the bedroom tax. People have looked after their homes, improved them ? why should they be turfed out?"

Under the scheme, which is introduced tomorrow, people in social housing with one spare bedroom will have their housing benefit cut by 14%, while those with two or more unoccupied rooms will see it slashed by 25%.

Ministers say the tax, which David Cameron calls the "spare room subsidy", will encourage people to move to smaller properties and save around £480m a year from the spiralling housing benefit bill. But critics such as the National Housing Federation (NHF) argue that as well as causing social disruption, the move risks increasing costs to taxpayers because a shortage of smaller social housing properties may force many people to downsize into the more expensive private rented sector.

The federation's warnings came as charities said the combination of benefit cuts and tax rises coming in from this week will amount to a £2.3bn hit on family finances.

Labour said analysis of official figures showed average families would be £891 worse off in the new tax year as the changes ? including those to tax credits and housing benefits ? begin to bite.

Research by the NHF says that while there are currently 180,000 households that are "underoccupying two-bedroom homes", there are far fewer smaller properties in the social housing sector available to move into. Last year only 85,000 one-bedroom homes became available. The federation has calculated that if all those available places were taken up by people moving as a result of the "bedroom tax", the remaining 95,000 households would be faced with the choice of staying put and taking a cut in income, or renting a home in the private sector.

If all 95,000 moved into the private sector, it says the cost of housing benefit would increase by £143m, and by millions more if others among the remaining 480,000 affected chose to rent privately.

As well as the move on spare bedrooms, council tax benefit will be replaced from this week by a new system that will be run by English local authorities but on 10% less funding. Pensioners will be protected under the changes but, as a result, it is feared there will be a bigger burden on poor working-age adults. Restrictions on the uprating of a number of welfare payments will also hit millions of households, homelessness charity Crisis has warned.

Chief executive Leslie Morphy said: "Our poorest households face a bleak April as they struggle to budget for all these cuts coming at once. People are already cutting back on the essentials of food and heating but there is only so much they can do.

"The result will be misery ? cold rooms, longer queues at food banks, broken families, missed rent payments and yet more people facing homelessness ? devastating for those directly affected, but bad for us all."

A Department for Work and Pensions spokesman said: "Our welfare reforms will improve the lives of some of the poorest families in our communities, with universal credit simplifying the complex myriad of benefits and making three million people better off. And by next year, we will have taken two million of the lowest earners out of paying tax altogether."

Crisis argues that homelessness is set to rise dramatically. This winter has already seen a rise of 31% in the numbers of rough sleepers across the country and a 20% rise in people seeking help with homelessness from their local authority in the past two years, according to Crisis.

ChartiesCharities are also concerned that the government-funded network of homelessness advisers in England is to be scrapped. The team of regional advisers and rough sleeper and youth specialists which have provided councils with expert guidance on meeting statutory homelessness duties since 2007 will be disbanded just as the bedroom tax comes in. Also being scrapped are the crisis loans and community care grants which provided a lifeline for people in financial crisis who needed essentials when moving to a new home.

Shadow chancellor Ed Balls said: "This is the week when the whole country will see whose side David Cameron and George Osborne are really on and who is paying the price for their economic failure."

OP posts:
skinnywitch · 02/04/2013 11:02

Dunno lottie I guess it's the same principle as buying fags when you're skint?

expatinscotland · 02/04/2013 11:05

'My friend has three children in a two bed property despite being on the list for years. I think people underestimate the amount of overcrowding in this country. Id happily move house if I were lucky enough to have an extra bedroom.'

That's not considered overcrowded if the kids are under 10. And if they are all the same gender, then not at all.

On the flip side of this, there are those who are overcrowded and continue to have more and more children to qualify for a larger home.

Homelessness is caused by more than just lack of social housing. The insecure private rental laws in this country are as much to blame, as well as the 'No DSS' and associated system.

Not a week goes by here that someone who is not on benefits, has children, private renting and needs to move on, but is experiencing difficulties finding a LL who will let to someone with children or a SAHP.

FasterStronger · 02/04/2013 11:06

'investing' in subsidised housing is committing the nation to future costs - exactly the opposite of what we should be doing.

we need fewer people dependant on others working, not more.

the railway should help grow the success of the South northwards.

expatinscotland · 02/04/2013 11:09

And the upshot is, people won't move if there is nowhere to go and private renting isn't an option for many of them due to 'No kids, no DSS.'

Dawndonna · 02/04/2013 11:12

How many times does it need to be said that the majority of those in receipt of HB are in work.
You can't keep citing out of work families and using it as a coverall.

FasterStronger · 02/04/2013 11:13

3 children sharing is generally overcrowding.

if people don't want to move within the UK, then they should receive less of a subsidy until they move.

williaminajetfighter · 02/04/2013 11:14

Wow, this is an interesting bunfight! It seems to me the differences on here really boil down to the level of government involvement people expect to have in their lives.

There is a lefty contingent on here that really do seem to believe in the nanny state and local government involved in their housing and their family life. And the other much maligned group whose argument is underpinned by financial realities and by a more libertarian approach to government.

I think its very worrying that people want and expect the government to provide housing, to know about the nuances of their family life or their child's insomnia. I really, really think we should aspire - and I certainly aspire - to as little government intervention in my personal life as possible. I would be pretty disappointed if my daughter left home and her first port of call was the local authority to provide housing for her.

I fully realize that it is not always possible and some people do need to rely on assistance from the state... but the tone of this thread is that state provision should be FUNDAMENTAL to our daily lives and a RIGHT and that the state should have a role in mollycoddling and hiding its citizens from the realities of the market economy that others must face.

pollypandemonium · 02/04/2013 11:15

Yes I think if people are having to pay for extra rooms in council property, those in overcrowded accommodation (and there are thousands) should be compensated for that or at least get a reduction in rents.

The fact that the government have made this a 'tax' is probably a sneaky way of legally getting round that.

Dawndonna · 02/04/2013 11:16

William. Try reading my much earlier post. I don't want mollycoddling, I have not been molly coddled. Take a look at how life was for me.

aufaniae · 02/04/2013 11:17

flatbread, but that is our hard earned money leaving the system to go to the private LLs. Would you not prefer it was coming back to the public purse - i.e. to us?

Fasterstronger "social housing is not profitable. it is subsidised by the state."

Is that the only reason you oppose the building of more council housing? I'm curious, if it was shown to be profitable, would you be in favour?

In fact, managed well, social housing can be profitable.
If the government embarked on a new programme of building social housing, it could easily be made to be profitable for example. Don't forget the government would be building the housing (which would be much cheaper than buying, as private LLs do), and then they hold on to the asset while rent comes in, forever, and the original asset grows in value. Just because the rents aren't the same as private rents doesn't mean they're not profitable!

"and you would never fulfil demand, as it would rise with supply."
From a business point of view, that's the worst reason not to invest in a "product" I've ever heard! You're basically saying "the demand is too great, so let's not do it!"

expatinscotland · 02/04/2013 11:18

'those in overcrowded accommodation (and there are thousands) should be compensated for that or at least get a reduction in rents.'

Bollocks! Compensated for being allocated a roof over them!? Get REAL!

skinnywitch · 02/04/2013 11:21

It is NOT a tax! It is a small reduction in benefit.

Workers get taxed. Those receiving slightly less free money from the rest of us than they were last month are NOT being taxed.

FasterStronger · 02/04/2013 11:22

aufan if it was shown to be profitable, would you be in favour?

no - because govt is not good at controlling risk. e.g. they would have bought masses of land in 2007 which would have now fallen in value. it would be another version of bailing out the banks.

subsidised housing is not a product. on market housing is a product. its like saying free food is a product.

Dawndonna · 02/04/2013 11:24

I don't receive free money from you, skinny nor does anyone else.

expatinscotland · 02/04/2013 11:28

'3 children sharing is generally overcrowding.'

It is not considered overcrowding by government guidelines, Faster, if the children are all under 10 or if the children are under 16 but the same gender.

And again, where are people supposed to downsize to if there are no smaller HA/council properties available and as long as private LLs have 'No DSS, no kids' policies? This is why so many wind up in over-crowded or homeless accommodation in the first place. They have a private LL who needs them to move on and are unable to locate a place to live that will take DSS and/or children.

And again, those who are age 61+ are exempt, so many of those affected are in fact families with children themselves, many of them disabled because disabled children are not exempted from this.

aufaniae · 02/04/2013 11:32

You can't equate free food with being a social LL!

Food gets consumed, there is nothing left.
Homes are leased. When the tenancy is over the home has (probably) increased in value, while making profit along the way.

And anyway, you've side-stepped my question - I asked if it could be shown to be profitable, would you be in favour. You've avoided answering by doubting that any government is unable to "control risk". If this is the case why support any government or opposition policy at all?!

I surmise from your answer that actually you would be in favour if it could be shown to be profitable in reality, but that your political colours prevent you from accepting that this could ever be the case. Which is a shame. It's a much more progressive idea, and would much better for society as a whole (that includes you) than the destruction that's being wreaked right now.

williaminajetfighter · 02/04/2013 11:32

dawndonna I wasn't specifically saying that you needed or wanted to be mollycoddled, what I'm saying is that there is an assumption that the state will take this approach.

Most people on MN have had a hard time at some point in their lives, difficult childhoods, trauma, financial difficulties and the like. When I had to move around the country for work, live in a bedsit, move out of my house when my partner lost his job etc it wasn't easy but I never for once expected the government to care or intervene.

But what I was trying to say and what others are saying is that there is a contingent of people who have had to downsize, shift kids around bedrooms, move house etc because of the reality of market forces or general life changes. But they did it and probably have to deal with it everyday. And it sucks.

Yet others are meant to be shielded from those realities and treated differently?

expatinscotland · 02/04/2013 11:34

In fact, those who have 3 children and a 3 bed home are affected by this reduction if those children are under 10 and/or all the same gender and under 16. Their entitlement is for a 2 bed now. And in some authorities, all rooms aside from kitchens and bathrooms are considered sleeping spaces.

skinnywitch · 02/04/2013 11:36

I don't receive free money from you, skinny nor does anyone else.

No, of course not. It all comes from Labour's Magic Money tree. Grin

Dawndonna · 02/04/2013 11:36

Yes, William, those with disabilities. Not unreasonable, that's what a caring society does, it protects its weakest members.
I am in a fortunate position. I do not claim anything other than carer's allowance. I have enough, I own my own house. My dh gets DLA. It doesn't mean I don't or won't care about those less well off than me.

FasterStronger · 02/04/2013 11:38

aufanie - just so you are clear - no. I don't think you are financially realistic. Nice ideas. but IMO dreadful in reality.

skinnywitch · 02/04/2013 11:38

8dawndonna* - genuinely, who do you think is paying for all these benefits?

CecilyP · 02/04/2013 11:40

'My friend has three children in a two bed property despite being on the list for years. I think people underestimate the amount of overcrowding in this country. Id happily move house if I were lucky enough to have an extra bedroom.'

That may be your friend's local situation but but it is not the situation here. We, as a family of 3, were allocated an enormous 2nd floor 3-bedroom council maisonette on a not particularly popular estate because there was insufficient demand for this type of accommodation from families who would fill it. In a same-sized home at the other end of the landing was another family of 3. While there is tremendous demand for 3 bedroom houses in our town, there is not much demand for 3 bedroom flats and maisonettes. Families with 3 children living in 2 bedroom flats do not want to move to 3 bedroom flats, they will hold on until they get a 3 bedroom house. (Actually, are you sure that isn't your friend's situation?)

Also on the estate were single people in two bedroom flats - not people whose families had move on but single people who had been allocated these flats because there is very little one bedroom accommodation available, and one-bedroom bungalows and ground floor flats will generally be reserved for older people and those who can't manage stairs.

While it might be a good idea to encourage people who are genuinely underoccupied to downsize, I can't see how the goverment can reasonably deem a family with an 8 year old girl and a 9 year old boy, or a family with 2 teenage boys, in a 3 bedroom house to have a spare bedroom. Also many of our council's newer homes have been built with one double and 2 single bedrooms, so I am not sure how this would work out with the bedroom tax.

CouthySaysEatChoccyEggs · 02/04/2013 11:41

Actually, most people I know on benefits WOULD be happy to work for Tesco on NMW.

Unfortunately, my Tesco store has not has a single job advertised for 14 months and counting.

Why?

Because people on JSA are working there on 'workfare' programmes. For their £71 JSA. Forced to do 14+ hour shifts, overtime at the drop of a hat, even if they are DISABLED AND SIGNED OFF WORK CLAIMING ESA - because people on ESA, a disability benefit, can be sent on INDEFINITE 'workfare' placements (those on JSA can only be sent for 6 months...), BEFORE they are classed as fit to work.

So their GP or consultant has deemed them unfit for ANY work, yet here they are, being made to work for their ESA.

And if Tesco has a ready supply of workers from ESA and JSA that it doesn't have to pay for, and in fact receives a bonus to 'use' workfare people, why would they advertise for any paid workers?

Go into your local Tesco. If you see any staff wearing a white shirt and a black jumper, then they are on a 'workfare' placement. They aren't meant to admit that though - as their 'provider' (A4E and the like) makes them sign confidentiality clauses...

You count how many staff are wearing those clothes in your local store. That equates to the sane amount of jobs at NMW that have bern removed from the local economy, leaving less PAID jobs for those job hunting...

These people would all be happy to work in that store for NMW - but they aren't even getting that!

Dawndonna · 02/04/2013 11:44

I'm paid by the government to look after four disabled people skinny. In the same way that a nurse/fireman/public servant is paid. It's just I get significantly less than they do for working as many hours. I also save the government an absolute fortune, a fact that is not taken into account when having a go at those on benefits. I also pointed out that I am in the fortunate position of not having to access dwp benefits other than carer's allowance.

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