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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:
Xenia · 02/04/2013 12:24

undercover makes good points particularly point 3.
It is hard for anyone to get used to less whatever their situation. However the severely disabled who cannot share a room are exempt despite the impression given on the thread. www.independent.co.uk/news/uk/politics/disabled-exempted-from-bedroom-tax-8530285.html

I think what annoys those who get no housing benefit at all or any state help with their lives or families and pay a lot of tax and have not had pay rises for 5 years and indeed often pay cuts is that they cannot themselves afford more bed rooms and indeed often have 3 children a room and even mixed sexes or share a room with their children and yet state benefits claimants are allowed much more and have all these "rights" that children of certain sexes must not share, parents not to share with chidlren etc etc. It just seem overly generous particularly when coupled with the fact there is still not a benefits cap and when it comes in it is the massive sum of £26,000 a year (or £34,000 of before tax income)

Anifrangapani · 02/04/2013 12:25

It is the housing associations who will have to administer it. Most LAs are no longer registered providers.

PeneloPeePitstop · 02/04/2013 12:26

Skinny that experience really isn't valuable at all when it shrinks the jobs market the way Workfare does.

There were practically no retail seasonal jobs last Christmas because of it.

FasterStronger · 02/04/2013 12:29

Penelope - BTL landlords' lenders insisting that the rent is set at 130% of mortgage as a condition of loan, for example

that's not so they make a 30% profit. the bank only cares they can cover the bills - so the bank thinks they need a rent of 130% the mortgage to break even.

VictorTango · 02/04/2013 12:29

The thing that gets me most is that people on this thread who don't realise this affects the wrong people.

So a couple who don't work with three t18 years olds who also don't work won't be affected and can remain in their 4 bed council house rent free.

A disabled child who needs a spare room for a career could be affected. How is this right?

skinnywitch · 02/04/2013 12:30

But penelope, earlier in the thread people were arguing vehemently that no one on benefits could possibly take seasonal work anyway? Hmm

PeneloPeePitstop · 02/04/2013 12:31

Xenia if the situation is that desperate then how come the govt doesn't insist on the £70 billion in tax that some corporations haven't paid? It's just been written off.

If the situation is that desperate then why do MPs have an allowance just for food alone that totals quarter of a million pounds a month between them? And this on top of transport, housing allowances and subsidised restaurants and bars. This on top of an already generous salary which has just increased.

If the situation is that desperate then maybe the gravy train for MPs should be derailed!

PeneloPeePitstop · 02/04/2013 12:34

So it's acceptable to strangulate the jobs market which is already in a dreadful state to punish the feckless?

Ok then.

It's not just seasonal work being affected. I just have the most noticeable example.

Another good one is the woman who was made redundant from Poundland. She signed on, got put on the work scheme and had to do workfare for her JSA - at Poundland. Exact same branch she used to work at!

CouthySaysEatChoccyEggs · 02/04/2013 12:38

Work experience for WHAT work? If all the supermarket jobs are being done by revolving 'workfare' placements, exactly WHERE are the supermarket jobs that they have experience of going to come from?

Nope, some of them in my local store are on their THIRD 6 month placement now.

Don't be so ridiculous, skinny. If you were running the store, and were offered a financial bonus for taking in workfarers, saving you on your wage bill, you'd have to be stupid to refuse. It's be terrible business sense.

No help to those on their third placement in the same store because none of the supermarkets here have had ANY advertised jobs for 14 months...

pollypandemonium · 02/04/2013 12:38

George Osborne on the news now.

Yes, we have the biggest deficit in Europe, because we bailed the banks out, not because we have loads of benefit scroungers

pollypandemonium · 02/04/2013 12:39

He keeps bleating on about a 'fair' welfare system.

What about a fair banking system, a fair tax system?

Dawndonna · 02/04/2013 12:39

Exemptions will only apply in relation to certain disabilities.
From Xenias Independent clipping.

Dawndonna · 02/04/2013 12:41

and today the poor are further shafted

CecilyP · 02/04/2013 12:41

1. When a council lets a home for less than the market rent, this is a subsidy. Perhaps that would be clearer if the councils charged a market rent and then paid free money to the tenant equal to the current subsidy. That is economically identical to what is happening. The government is simply reducing the amount of free money for claimants in houses that are too big for their basic needs. It is right that taxpayers money is spent carefully. There is no social contract that makes it fair for taxpayers to subsidise people's spare bedrooms when they don't necessarily even have one of their own.

No, a market rent has to include a profit for the landlord (and that can include landlords who have bought at recent high prices. Councils do not have to make a profit on the rents they charge and they also own large numbers of properties that were built relatively cheaply many years ago. (Council's have benefited from house price and general inflation in exactly the same way as owner occupiers have.) It is perfectly possible to charge an economic rent, well below market rent and not have to subidise that rent.

3. It's harsh to take a cut in a subsidy you have become used to but the alternative is worse. The alternative is for the country to gradually bankrupt itself to the point where we cannot pay any benefits or pensions at all (or buy drugs, or pay public sector workers, or import food etc).

You are conflating 2 things; being on benefits and being a council tenant. The majority of council tenants will be on full rent and not be affected by these changes. Council tenants on benefits in the 'right' sized property will not be affected by these changes. The only people who will be affected will be people on benefits deemed to be in homes that are too large - some will be in homes too large by anyone's standards while others will be in homes that seem perfectly reasonable for their size of family. When you are living on basic level of benefits a cut in your income really going to be very, very hard for some people. They are hardly going to be able to save for the removal costs to move to a smaller home.

2. When the 85,000 one bedroomed homes (or however many there are) are all gone, THEN people can justifiably complain about being asked to downsize to places that are not available.

How silly. Do you really think councils have 85,000 vacant one bedroom homes for single people and couples. And do bear in mind the council rent for a one bedroom bungalow in a nice area is probably more than rent on a 2 bedroom flat on a rough estate.

CecilyP · 02/04/2013 12:43

Cecily - have you ever heard anyone not in receipt of social housing say they had to get a larger property than needed as it was all that was available?

Not exactly, but those lucky enough to be able to buy may choose somewhere small in a desirable area or somewhere large in a cheaper area.

FasterStronger · 02/04/2013 12:46

a market rent has to include a profit for the landlord no it doesn't - no one is guaranteed a profit.

FasterStronger · 02/04/2013 12:47

Not exactly, but those lucky enough to be able to buy may choose somewhere small in a desirable area or somewhere large in a cheaper area

and renters on low incomes who don't qualify for HB? what are their choices?

skinnywitch · 02/04/2013 12:49

What about a fair banking system, a fair tax system?

I'd got for that. Flat tax rate for all. That's pretty fair.

IneedAsockamnesty · 02/04/2013 12:52

And because nobody else has corrected the figure up thread by prolly.

Its age 10 if the sibling is a different sex not 8.

And going directly from the guidance sheets issues to each LA regarding disabled children.

They do not have to be exempt from the rule but they do have to be assessed the main focus of the assessment will be on disturbance to a sibling who would normally be expected to share.

Its quite telling that this requirement has happened as a result of some families taking a LA to court the court finding in there favour then the LA appealing it and keeping that up for quite a long time can't remember off the top of my head if they dropped the appeal after being told they would lose or did lose.

skinnywitch · 02/04/2013 12:54

10? really??

Gosh, I know loads of privately owned homes where children of that age are sharing.

Really is one rule for some!

CecilyP · 02/04/2013 12:54

a market rent has to include a profit for the landlord no it doesn't - no one is guaranteed a profit.

Obviously not, but most private landlords would seek to make a profit, and some make a very handsome profit which you read about in articles about successful entrepreneurs, while there are others who you don't read about who bought their houses years ago and make even more profit.

and renters on low incomes who don't qualify for HB? what are their choices?

Sadly, they are pretty limited, but I thought if their income was low enough they would qualify for HB.

FergusSingsTheBlues · 02/04/2013 12:55

Is ANYbody here actually thinking about the overcrowded or the homeless...y´know the people its supposed to help?

There are plenty disabled people, kids with ADHD, Aspergers etc all roughing it in BnBs. You can argue vulnerability non stop but nothing is more vulnerable than a child being raised in a BnB.

Plus, most people downsize in their later years anyway - because they HAVE to - its not a new concept. People don´t fall apart if they have to move houses you know.... Ive moved several times for work reasons etc both as a child and an adult. I had one elderly neighbour on her own in a four bed that she couldnt afford to heat, while next to me there were three kids and two parents in a one bedroom flat.

CecilyP · 02/04/2013 12:56

It is the housing associations who will have to administer it. Most LAs are no longer registered providers.

Sorry, I was thinking locally; our council is still a landlord.

CouthySaysEatChoccyEggs · 02/04/2013 12:58

To answer the question about food - local farmer's market? In the middle of an estate? There's usually a Co-op or a Tesco Express with highly inflated prices, and sod all else. Maybe a chip shop.

So any shopping requires bus fares. For the adult AND any DC's over 5 - because you don't get free bus travel for DC's outside London. And only buying what you can carry. A 5k bag of potatoes would limit the other food you can carry. You have to think that that's how they have to get their cleaning products too. Washing powder is HEAVY. They can't afford to shop around because bus fares become too expensive.

And to answer another point made - anyone with 3 or more DC's in Social Housing will, the majority of the time, have children sharing a room.

I share a room with my 2yo, who has disabilities.

My 9yo DS2 and my 11yo DS1 share a room 10 X 11ft.

Most people I know have DC's sharing rooms. In fact, I can't think of anyone I know in Social Housing that doesn't.

To answer the next point : As my DD is unlikely to EVER earn enough to live independently, she will still be at home for YEARS.

There will come a point where I have a 24yo DD, a 20yo DS1, a 16yo DS2, a 9yo DS3, and myself at home.

Technically, at that point, I would become 'entitled to', under the NEW rules, a 5 bed house. But that doesn't mean I will get one - for starters my LA HAS no 5-bed houses. The largest stock IS 4-beds.

So I will STILL have people sharing. This is the same all over. Though they may be 'entitled' to an extra room, it's not available. Doesn't mean I want to drive other people into further poverty to try to get that extra room - my DC's accept room sharing as it's the norm.

IneedAsockamnesty · 02/04/2013 12:58

Skinny.

You know lots of family's where over 10's are sharing a bedroom as there normal sleep area with siblings of the oppersit sex?

Are there not laws against that?