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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:
montmartre · 31/03/2013 14:17

moony- apparently the home ownership percentage being higher in UK is all a myth, and that the %age of home owners in other countries with similar economies are very similar, if not higher.
What is different in the UK is ppeople expecting (I.e. feeling it's their right) to make a profit from their home, rather than merely being something you onw to use and live in, hence the house price situation we find ourselves in.

I suppose you'd like a link... my source was DH, so likely either telegraph, lrb, or private eye! Grin

moondog · 31/03/2013 14:25

Interesting Mont.
I read those too but can't find anything about it.
Have family in France and have lived there myself so now about renting situation.
Im no economist but surely these rents and house prices can't continue?
It's also immoral to expect tax payers to fund buy to let landlords.
It's downright obscene in fact and that must stop.

Viviennemary · 31/03/2013 14:32

I agree with moondog. Time for the ridiculous subisidies to private landlords to stop. People earning £12,000 a year paying tax to subsidise people in rented property that costs more than that in rent. It is just not on. And I notice not a word mentioned about the new pension rules coming in where the very low paid will be forced to join a pension scheme and that will be taken out of their salaries.

infamouspoo · 31/03/2013 14:35

If you're made homeless, do you lose your kids?

BumpingFuglies · 31/03/2013 14:37

infamous the Council has a duty to house only the children, not the adults. Make of that what you will.

Leithlurker · 31/03/2013 14:46

You will not lose children ONLY as a result of being homeless. However if you are already known to SS or the children are on the at risk register. They could be fostered.

propertyNIGHTmareBEFOREXMAS · 31/03/2013 14:46

Shit, so this could all be angled towards 'legitimately' removing kids from the poor who will no longer be able to afford to feed them because of all the various cuts?!! [fucking absolutely horrified]

BumpingFuglies · 31/03/2013 14:48

It's highly unlikely though, as a SW friend explained to me. But possible Sad

propertyNIGHTmareBEFOREXMAS · 31/03/2013 14:49

I hope to God people can hang on until 2015 when this nasty lot will be dust Sad

montmartre · 31/03/2013 14:49

moony he says it was a piece in the telegraph by a housing expert. We discussed it thurs I think, so poss tues or weds.
When we lived in france we owned, not rented, though many people did rent. The controls over tenancy are so strong though- people actually have rights, as opposed to UK system where people are completely at the whim of agents, and sometimes LLs. For example, it is not lawful to evict tenants between November and March (presumably so they don't die of cold!)

There have been vast house price rises in Paris though (where we were)... tbh we made an extremely healthy profit from our purchase, and subsequent sale. There are tax structures in place though to prevent/reduce speculation- when you sell, you pay ttax on a tapered scale according to how long you've owned the property... this begins at 100%, so people cannot buy, do a place up then sell for an huge profit, as they'd lose the lot to taxation.

Hai1988 · 31/03/2013 14:51

Hi sorry haven't read the entire thread but tbh my view on it is that its a good thing.
my family are currently in a 2 bed flat and need to upgrade to a 3 bed as i already have a 8 year old boy and know i am expecting a girl soon.

its helped us out because people with bigger houses are now being encouraged to downsize because of the bedroom tax so i personally think its good.

its only right that people who no longer need big houses give them up for people who do.

moondog · 31/03/2013 14:51

Blimey.
I read it every day.
Willgo through old copies.
Interesting about tax on selling new places in France. Didn't know that althoguh family there.

propertyNIGHTmareBEFOREXMAS · 31/03/2013 14:53

Hai, your view is shortsighted at best....

'And then they came for me and there was no one left to speak out for me'

BumpingFuglies · 31/03/2013 14:53

Hai

You would be well advised to read the whole thread. Really.

montmartre · 31/03/2013 14:54

it makes absolutely no sense to remove people's children to fostercare! It costs far more to support children in cqre than it would to pay a family's hb even for a large london property.

Dawndonna · 31/03/2013 14:54

Hai What about in areas where there is nowhere for these people to go. There are huge numbers of people who need two bedroomed accommodation, are in three bedroomed, are unable to find two bedroomed accommodation and are therefore being penalised because their council or housing authority cannot help with the relevant to circumstances accommodation. You're 'I'm alright, Jack' attitude is not a pleasant one.

rhondajean · 31/03/2013 15:00

Hai you won't be entitled to a larger house till your son is 10.

Leithlurker · 31/03/2013 15:02

Hal are you receiving housing benefit?

Hai1988 · 31/03/2013 15:03

I am doing an exchange rhonda i know the housing assosiation won't rehouse me as yet, and tbh if i was staying where i was i doubt they wud fo anything when he turns 10 they are arses!

Hai1988 · 31/03/2013 15:05

Yes i am leith

AKissIsNotAContract · 31/03/2013 15:13

So won't you still have to pay this as you'll be considered as over-occupying until your DS is 10?

Dawndonna · 31/03/2013 15:13

Then Hai you will lose out. You are only entitled to two bedrooms.

propertyNIGHTmareBEFOREXMAS · 31/03/2013 15:15

This Government are NOT looking out for you, Hai. I promise you that Sad

rhondajean · 31/03/2013 15:15

Yes you will, up until he turns 10.

seriouslychocolatey · 31/03/2013 15:29

there are lots of very, very, very wrong things about this new rule and i completely agree that foster carers and those with disabilities that need the extra room should be exempt BUT I am a single mum of one DC who rents private accomodation, I work and get some housing benefit to cover my income shortfall. I have a 2 bedroom flat, my bedroom is tiny, a box room, DC's is decent size double . We come under LHA ruling. When DD leaves home fully- she's currently at Uni, I will no longer be eligible for the LHA rate for a 2 bedroom property, my choices are to top up from my income (clearly almost impossible as I get benefits therefore am on a very low income), rent my DCs room out (pointless as that pushes up my income and Dcs room will be unavailable for her when she wants to visit me or if she splits up with future partner, can't find job after uni etc etc) or move somewhere smaller. Same choices as those in social housing are now facing. We've lived here 10 years, its our home just as much as someone who lives in a council or housing association property feels its their home too. Why should my friend, who was lucky enough to get a council property by manipulating and exploiting the rules , be allowed to stay in her 3 bedroom house, with its lovely large garden when her 2 sons leave home? at tax payers expense . How is that fair? I would love to stay here, to keep DDs bedroom as hers forever so she knows she can stay when things are tough but its very unlikely I will ever be able to do that. Yes it makes me very sad. Two wrongs don't make a right but the current system in clearly unfair for many.