Increase in welfare mitigation funds welcome but will be overwhelmed by further social security cuts

For immediate release: Monday 6 March 2017

Responding to the announcement by the Scottish Government that it will spend almost £58 million, including a £7.7 million increase in Discretionary Housing Payments (DHPs), mitigating the impact of the UK Government’s welfare cuts (1), the Scottish Federation of Housing Associations (SFHA) said that while the increase in Discretionary Housing Payments is welcome, it will be “overwhelmed” by the further cuts in social security entitlement.

The £57.9 million made available to local authorities will be split as follows:

• £47 million to fully mitigate the ‘bedroom tax’ for more than 70,000 households - up from £45.4 million.
• £10.9 million, up from £4.8 million, to help mitigate other UK Government policies such as the Benefit Cap and Local Housing Allowance rates.

SFHA Policy Adviser Jeremy Hewer said:

“The increased allocation for Discretionary Housing Payments, welcome though it is, will unfortunately be overwhelmed by the further cuts in social security entitlement.

“According to the report by Sheffield Hallam University, presented to the Social Security Committee in October 2016, the reduction of the Benefit Cap will hit as many as 11,000 households – many of whom will comprise families with three or more children. The boost in the Discretionary Housing Payment Budget cannot fully mitigate the impact of the Benefit Cap. It will very likely result in significant rent arrears and a rise in evictions, given the household composition of many of those involved; this, in turn, may lead to an increase in the number of looked after children. Therefore, the Benefit Cap is yet another example of a false cost saving: the expenditure may be off the DWP’s books, but it will lead to added pressure on the budgets of local authorities and housing associations.

“The SFHA will continue to work with the Scottish Government to help mitigate the effects of the Benefit Cap and help make best use of the limited resources available.”

Ends

For further information, please contact Kirsten Walker on t: 0141 567 6221 m: 0788 788 8348 email: kwalker@sfha.co.uk

Visit our website at www.sfha.co.uk

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NOTES:

1. http://news.gov.scot/news/bedroom-tax-mitigation
2. The Scottish Federation of Housing Associations (SFHA) was established in 1975 and has around 115 members providing affordable housing and wider community services across Scotland, as well as a further 200 sector associates. The SFHA is owned and governed by its members and exists to lead, represent and support the work of housing associations and co-operatives throughout Scotland www.sfha.co.uk
3. 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.
4. Housing associations and co-operatives are not-for-profit bodies regulated by the Scottish Housing Regulator.