Is the ‘Bedroom Tax’ bedding down?

by Ken Gibb

There has been quite a bit of media interest and reportage on a paper I did for the Welfare Reform Committee of the Scottish Parliament. This was added to with my appearance yesterday (November 5 2013) giving evidence to the Committee on the report. The paper is linked below:

The evidence to the committee is on a link in one of the pages on this website.

I provide a summary below of the main points but a first a little context.

First, my brief was to explore the evidence thus far about the impact of the under-occupation charge. This involved looking at the research and policy literature on impacts, both prior to April 2013 and thereafter. Second, I tried to make sense of the limited empirical or quantitative material that has ben circulated. Because we recognised that this might only take us so far, I also carried out interviews with seven landlords to get a sense of how they thought the charge was impacting on their tenants in different parts of Scotland and different housing contexts.

Second, it became pretty clear early on that this is such a hot topic and so much work is underway that the profile of the ‘bedroom tax’ story changes certainly weekly and sometimes daily. Even in the three weeks or so since the report came out there have been several additional strands – with new analysis from, among others, the University of York about DWP assumed savings from the charge, from the Scottish Housing Regulator on arrears, from the Scottish Federation of Housing Associations, plus research by the BBC.

Third, as is stated in the report, we simply do not have a complete picture of what is going on. This is because:

  • The incidence of the charge is dynamic and there is considerable churn as people move in and out of its effects, and as people enter and exit tenancies. The same applies to arrears.
  • Arrears are also affected by the signup for, and availability of, Discretionary Housing Payments, now topped up to the max by the Scottish Government.
  • DWP on-line benefits data, which is better in England, has not yet reached the same resolution in Scotland – though I am led to believe it shortly will do.
  • We instead rely on a series of partial, snapshot, sampled and otherwise segmented data that does not take account of these dynamics.
  • This is particularly the case for making sense of how many properties became vacant that are one bed in a given year. Working out how many under-occupiers can be ‘downsized’ each year and how long it would take to clear the backlog, is fraught with difficulty – even of those affected actually wished to move.

The picture will improve but would be best if Government and the regulators in Scotland would work together to build the database we need which is one that matches households to properties and where vacancies would be measured by property size. The COSLA/Scottish Government survey remains our best sense of incidence – but it is a snapshot of 98% and not a stable picture over time.

With regards to the other main findings, the most interesting material is I believe in relation to the interviews with the seven landlords from different housing associations and council housing departments – operating in very different contexts. The main conclusions of this part of the work was as follows:

“The views of officers from a range of social housing providers indicate that the reality of the under-occupancy charge on the ground is varied, challenging and changing. There are important differences between councils and housing associations, between towns and rural settings and between tight and looser labour markets. The incidence of the charge varies across providers as does arrears. DHP and linked support from councils and the Scottish Government has been critically important in many places and its uncertain future underscores its importance to managing the under-occupation charge in future years. Different kinds of client seem to be disproportionately affected in the range of settings the landlords work in. It does seem however that single people and those with illness and disability are those principally exposed”.

“Those who are actively responding to the charge are doing so by paying it, by seeking DHP support, by trying to get off benefits and my terminating their tenancies and looking for housing solutions elsewhere. However, there is little demand to downsize, even if there is little actual one-bed property turning over in any of the organisations consulted. The pull factors that keep people in their homes and existing settled communities outweigh the push driver of the charge”.

“The other striking point from these discussions concerns the universal recognition of further difficult challenges in the shape of ending direct payments to landlords, the end of local Housing Benefit services, the huge financial inclusion challenges ahead and the specific problems facing those of working age in social housing relying on ESA and DLA. It is ironic that much of the important professional learning delivered as a result of implementing and dealing with the consequences of the under-occupancy charge locally – will in part be lost by the very nature of succeeding welfare benefit reforms”.

It is only seven organisations but these were, in the main senior staff, some specialist in welfare benefits. One could not fail to be struck by the sense that (a) many people were unwilling to move for understandable support network reasons and (b) that the interplay of successive waves of welfare reform will have cumulative adverse effects on the often highly disadvantaged and that it is still early in this process of change.

The evidence session was intense but thoroughly fair. There was a lot of interest in this idea that many of those affected by the under-occupation charge on balance did not want to move because of ties to their present home, adaptations, local support, etc. or indeed the absence of reasonable alternative housing solutions. These critical behavioural questions about how those affected actually respond to the new situation is for me the key area of knowledge we need to understand better going forward.

A key area of political dispute in Scotland concerns bedroom tax arrears and whether evictions associated with the charge should be ruled out (as some councils have already declared). In the report and in evidence I suggested caution about this development and the need for further debate or consultation.

I am worried about the signal this sends out (particularly given that in future direct payments will be ended via the universal credit). I also think that as a consequence  much more investment is required in financial inclusion, budgeting and money advice. Landlords work effectively where they deal proactively with tenants in financial difficulty, taking account of specific contexts and dealing with the situation on a case by case basis. This is potentially a more effective way of actually tackling the source of issues and should be supported and resourced. In the long term I believe better client-focused arrears management and financial inclusion coaching will work better for precarious tenants. We should of course always seek to avoid evictions as far as is possible – but there are worse things ahead than the bedroom tax in the form of further welfare reforms in terms of their effects on the financially vulnerable.