Bedroom tax linked to sharp increase in rent arrears

6th July 2013

Scotland Housing.
Survey reveals pressures on councils due to UK Govt welfare reforms.

The UK Government’s “disastrous” welfare reform programme has led to a sharp rise in rent arrears and a rise in emergency housing payments across local authorities, Deputy First Minister Nicola Sturgeon said today.

New data collected by the Scottish Government and COSLA shows that UK Government changes to housing benefit have added significant financial pressures on Scottish councils.

The research showed that all, but one, of Scotland’s local authorities with housing stock, had seen an increase in rent arrears. Three quarters of councils said that the bedroom tax is directly responsible for the increase in arrears.

Of that rent now due to be collected from tenants affected, 60 per cent of councils reported receiving 40 per cent or less and 80 per cent of councils reported receiving 50 per cent or less (based on responses from 20 of the 26 councils with their own housing stock).

Ms Sturgeon said that it was ‘absolutely imperative’ that the DWP review and evaluate the impact of their welfare reforms as a matter of urgency.

Last month, research showed that local authorities had received 22,000 requests for emergency Discretionary Housing payments by the end of May. Nineteen local authorities saw a 400 per cent rise compared to the same period last year. And by the end of May, 22 per cent of the £10 million funds made available in Scotland for DHPs by the Department for Work and Pensions had been allocated.

Ms Sturgeon said:“This new data shows a drastic increase in the number of people applying for emergency funding to help them deal with the impact of the UK's disastrous welfare reform programme.

“Local authorities across Scotland are having to deal with the appalling aftermath of the bedroom tax, which is hitting our most vulnerable citizens, including a high proportion of disabled people, extremely hard in these challenging economic times.

“The Scottish Government and COSLA have had little indication from the UK Government about how they intend to review the impact of the bedroom tax to date - even though it is clear from this research that it is driving up rent arrears and requests for emergency funds.

”That is why we have made a commitment to the people of Scotland that we will scrap the bedroom tax following a successful referendum vote next year. This will be done within a year of independence and we will have the practical arrangements in place to ensure that this happens.

“Working with our partners in local government we have provided £40 million to protect households from the 10 per cent cut in successor arrangements to Council Tax Benefit. We have also allocated funding to support people affected by the bedroom tax with an additional £7.9 million for advice and support services, of which £2.5 million is ring fenced for social landlords.

“We cannot mitigate the full impacts of the UK Government’s cuts to the welfare system without full powers over welfare or access to all our resources – but we will continue to oppose the bedroom tax. It is unfair and divisive policy that hit some of our most vulnerable groups hardest, and it undermines and jeopardises the work this Government is taking forward to create a fairer, more successful, and prosperous Scotland.”