28 Mar 2013

Bedroom Tax: some home truths


The ‘bedroom tax’ will fail to solve overcrowding and could even boost the benefit bill, not cut it, says a report out today from the National Housing Federation.

It examines claims by the Government that the under-occupation penalty, the so-called ‘bedroom tax’, will tackle overcrowding, encourage more efficient use of social housing and save the taxpayer £465m a year. Based on the Government’s own data, The Bedroom Tax: Some Home Truths, raises serious doubts that the measure will meet those aims.

It says that by adopting a national “one size fits all” approach to tackle overcrowding, the policy is also targeting those parts of the country least affected by the problem and could potentially cost the taxpayer money if those people told to downsize actually did.

The report found that:

  • In the north of England families with a spare room outnumber overcrowded families by three to one (1) so thousands will be hit by the bedroom tax despite there being no local need for them to move. The mismatch between people living in overcrowded homes who need to swap with those who have a spare room works only on paper and nationally. In reality, to make it work you would have to move thousands of families thousands of miles.
  • If those people do choose to move there are simply not enough smaller social homes available for all 660,000 households affected by the bedroom tax to move to, and
  • If everyone affected did decide to move, many would have to go into the more expensive private rented sector, which would mean in some cases housing benefit claims could actually increase.
  • Meanwhile, if disabled people in adapted properties moved into smaller homes this could also cost the taxpayer millions more in costly home adaptations. Some 77 per cent of people on Disability Living Allowance live in the social housing sector and two thirds of the people hit by the bedroom tax are disabled. Around 100,000 households live in properties adapted for their needs, some through local authority grants at an average cost of £6,000.

David Orr, chief executive of the National Housing Federation, says:

“The bedroom tax is an ill-conceived policy which will hurt the most vulnerable people in our society. It will cause financial hardship for hundreds of thousands of families and cause huge upheaval around the country.

“The Government’s assumed savings are questionable and this policy could ultimately cost the taxpayer more in the long term. It takes no account of the fact that there are not enough smaller homes in the social sector available for people who are under-occupying to move into. For them, the only options will be to take the financial hit or to move into a smaller home in the private sector, which could lead to higher housing benefit claims. The real solution to the housing crisis is to build more homes and bring down the cost of housing to reduce the benefits bill.

“The Government must repeal this ill-conceived policy, but at the very least right now it must exempt disabled and other vulnerable people from these cuts.”

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