Tenants and Housing Associations Must Not Pay for Welfare Reform Bill

The SFHA is urging action from the House of Lords to avoid tenants and housing associations bearing the brunt... of the UK Government's Housing Benefit proposals, as the Bill reaches its second reading in the House of Lords today (Tuesday 13th September 2011).

The SFHA is recommending a number of changes before the Bill becomes law.

In a briefing sent to Scottish Lords, SFHA highlights the following concerns:

• Our opposition to the under-occupation penalty - penalising tenants who live in a property judged to be too big - even if there is no suitable alternative.

• Our call for the option for direct payment of Housing Benefit to the landlord to continue - this helps tenants to budget and prevents them getting into arrears.

• Our opposition to any break in the link between the housing costs subsidy and actual rents - in other words, the subsidy should be linked to fluctuations in rents.

• Our concerns about the overall benefits cap in relation to housing costs.

• Our concern about the new provision (introduced at Commons Report Stage) regarding deduction of Housing Benefit overpayments from earnings.

Independent research commissioned by the SFHA revealed that up to one in five tenants in Scotland will see their incomes fall due to the Coalition Government's Housing Benefit cuts. The research analyses the impacts on different groups of people, and proposes a range of ways of mitigating the most severe impacts which could see some tenants losing hundreds of pounds a year.

Maureen Watson, SFHA Policy and Strategy Director said:

"The House of Lords must listen to the voice of social landlords and make some key amendments to the Welfare Reform Bill. While we understand the need to save money, we also need to prevent tenants in Scotland being unfairly penalised, and forced into financial difficulty.

"The fact that one in five tenants in Scotland are set to lose income as a result of these changes, as our research has revealed, is shocking.

"One of the most unfair proposals in the Bill is financial penalties for those to living in a property that's deemed too big for their needs. The Bill also fails to recognise a serious shortage in one-bedroom accommodation. While nearly half of working-age tenants need a one-bedroom property, just a quarter can actually get one.

"The new all-in-one benefit, Universal Credit, is set to be paid directly to tenants, monthly, and in arrears (instead of in advance). This will make it harder for tenants to manage their budgets and therefore to pay their rent."

Ms Watson added:

"Without crucial amendments, the Bill could damage the financial position of housing associations and co-operatives, who exist to house those in need. There is still time for the UK Government to adapt its welfare reform proposals to lessen the impact on the vulnerable, while still saving money."

Ms Watson concluded:

"We want tenants to keep the option to have housing costs paid direct to landlords if they wish. Currently a huge 96 per cent of tenants opt to pay landlords direct (1) - this is clearly how they want to manage their finances sustainably. There is a huge risk that the reduction in tenants' incomes, combined with housing costs being paid direct to those already in financial hardship, will make it harder for tenants to pay their rent.

"We urge the House of Lords to keep the option for direct payments to landlords and to look again at some of the provision which will hit some tenants unreasonably hard."

The Scottish Government has backed the SFHA's research findings and recommendations for the Bill. Housing and Transport Minister Keith Brown said that the findings, "...chime with the Scottish Government's own assessment, which was published in December, of Westminster's ill-considered cuts in Housing Benefit.

"60,000 tenants in Scotland face losing on average £40 per month, and at least 95,000 suffering more misery as further reductions take effect in April 2013.

"We are as one on this issue with SFHA and other key organisations on our Housing Benefit Advisory Group." (2)

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For further information, contact Press and Public Affairs Manager Claire Munro on t: 0141 567 6244 m: 07771 926778 or e: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Visit our website at www.sfha.co.uk

NOTES:

1) http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm110718/text/110718w0002.htm#11071842000014

2) SFHA press release 23.06.11, SFHA Launches Report on Impact of Welfare Reforms' available at http://www.housingscotlandtoday.com/component/option,com_docman/Itemid,89/gid,367/task,cat_view/

3) A copy of the SFHA briefing to the House of Lords is available on our website at http://www.sfha.co.uk/component/option,com_docman/Itemid,37/gid,251/task,cat_view/

4) Read the SFHA's research on the impacts of the proposed changes to Housing Benefit here:
http://www.sfha.co.uk/component/option,com_docman/Itemid,82/gid,1288/task,doc_download/

5) The SFHA was established in 1975 and has around 170 members providing affordable housing and wider community services in Scotland, as well as a further 200 commercial members. The SFHA is owned by its membership and exists to support the work of housing associations and co-operatives in Scotland by providing services, advice and good practice guidance.

6) The SFHA is the voice of the principal builders and managers of new affordable housing for rent in Scotland. Housing Associations own and manage around 40% of the country's affordable rented housing stock, over a quarter of a million homes across Scotland.

7) Housing associations and co-operatives are not-for-profit bodies regulated by the Scottish Housing Regulator.