House of Commons Scottish Affairs Committee
The impact of the Bedroom Tax in Scotland: Interim Report
Fourth Report of Session 2013–14
Report, together with formal minutes, oral and written evidence
Ordered by the House of Commons to be printed 12 December 2013
HC 288 Published on 16 December 2013 by authority of the House of Commons London: The Stationery Office Limited £23.00
The Scottish Affairs Committee
The Scottish Affairs Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Scotland Office (including (i) relations with the Scottish Parliament and (ii) administration and expenditure of the offices of the Advocate General for Scotland (but excluding individual cases and advice given within government by the Advocate General)).
Current membership Mr Ian Davidson MP (Labour/Co-op, Glasgow South West) (Chair) Mike Crockart MP (Liberal Democrat, Edinburgh West) Mrs Eleanor Laing MP (Conservative, Epping Forest) Jim McGovern MP (Labour, Dundee West) Graeme Morrice MP (Labour, Livingston) Pamela Nash MP (Labour, Airdrie and Shotts) Sir Jim Paice MP (Conservative, South East Cambridgeshire) Simon Reevell MP (Conservative, Dewsbury) Mr Alan Reid MP (Liberal Democrat, Argyll and Bute) Lindsay Roy MP (Labour, Glenrothes) Dr Eilidh Whiteford MP (Scottish National Party, Banff and Buchan)
The following members were also members of the committee during the Parliament: Fiona Bruce MP (Conservative, Congleton) Mike Freer MP (Conservative, Finchley and Golders Green) Cathy Jamieson MP (Labour/Co-op, Kilmarnock and Loudoun) Mark Menzies MP (Conservative, Fylde) Iain McKenzie MP (Labour, Inverclyde) David Mowat MP (Conservative, Warrington South) Fiona O’Donnell MP (Labour, East Lothian) Julian Smith MP (Conservative, Skipton and Ripon)
Powers The committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the internet via www.parliament.uk.
Publication The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the internet at www.parliament.uk/scotaffcom. A list of Reports of the Committee in the present parliament is at the back of this volume.
The Reports of the Committee, the formal minutes relating to that report, oral evidence taken and some or all written evidence are available in a printed volume. Additional written evidence may be published on the internet only.
Committee staff The current staff of the Committee are Rebecca Davies (Clerk), Rhiannon Hollis (Clerk), Duma Langton (Inquiry Manager), Gabrielle Hill (Senior Committee Assistant) and Ravi Abhayaratne (Committee Support Assistant).
Contacts All correspondence should be addressed to the Clerk of the Scottish Affairs Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 6123; the Committee’s email address is [email protected]
The impact of the Bedroom Tax in Scotland: Interim Report 1
Contents
Report Page
Summary 3
1 Introduction 5
2 Measuring the impact 6 The aims of the policy 6 Missing the Point 6 Assessing impact 6 Numbers affected 7 Reasonable offer 7 Arrears 8 Demand for smaller properties 9 Consequences for landlords 10 Evictions 11 Homelessness 12 House building 12 Consequences for tenants 13 Private sector 14 Rural Scotland 15 Allocation policies 15
3 Mitigation 17 Discretionary Housing Payments (DHP) 17 DHP and Scotland 18 Concerns around DHP 19 Level of charge 21 Exemptions 22
Conclusions and recommendations 26
Formal Minutes 31
Witnesses 35
List of printed written evidence 36
List of Reports from the Committee during the current Parliament 37
The impact of the Bedroom Tax in Scotland: Interim Report 3
Summary
The Scottish Affairs Committee wishes to see the bedroom tax repealed. We see it as overwhelmingly being a budget cut suffered by those in greatest need. Its stated objectives can better be achieved by other methods.
We believe that the promoters of the bedroom tax fail to understand that social housing provides homes, often for a lifetime, rather than simply units of accommodation which can be treated as commodities.
We also believe that the Government fails to recognise the difference between the private sector, which overwhelmingly offers short term and more expensive accommodation for those in transit and the public sector’s role in the building of viable communities.
While abolition is being considered we believe that the Government should apply a series of changes to the operation and implementation of the bedroom tax, in particular not applying it to individual tenants until a reasonable alternative is offered.
We do not believe that the DHP system is working well and take the view that complete discretion for local authorities is inappropriate and should be replaced by a standard entitlement structure, to apply across the whole of the United Kingdom, above which local authorities would be free to move, taking account of local circumstances.
We also believe that both the UK and Scottish Governments should make longer term commitments to the provision of DHP payments in order to allow local authorities to plan and structure their budgets.
We recognise that those affected by the bedroom tax are often amongst those most in need of help and support but least able to articulate their requirements or access decision makers and opinion formers. In these circumstances we believe that the bedroom tax has placed an unfair financial burden upon the shoulders of those least able to bear it.
The impact of the Bedroom Tax & other changes to housing benefit in Scotland 5
1 Introduction
1. The removal of the spare room subsidy, also known as the bedroom tax or under occupation penalty, came into force on 1 April 2013. The aim of the policy was twofold: to reduce housing benefit expenditure, and to use existing public sector housing stock more efficiently. The Government estimated that 80,000 claimants in Scotland would be affected by the bedroom tax, with an average weekly loss of £12. This represented approximately 33% of the working age housing benefit claimants in Scotland.1 Those claimants will have to make up the shortfall between housing benefit and rent each week, or move to a smaller property. The bedroom tax also has implications for social landlords. The same landlord has to consider how to provide housing to all their tenants, many of them vulnerable, when the income from rent is becoming less reliable.
2. We announced our inquiry in May 2013, and set out to evaluate the impact of the policy on tenants and landlords across Scotland. We have visited the Hebrides and Fife, and plan to visit more parts of Scotland to hear the concerns of tenants, public landlords and others.2 While we are focussing upon Scotland, we recognise this is not just a Scottish issue. We were made aware that Wales is the most affected area of the United Kingdom and met Carl Sargeant AM, Minister for Housing and Regeneration, Welsh Government, in order to hear how the Welsh Government was seeking to mitigate the negative impact of the policy.3 During the course of our inquiry to date, we have explored what the UK Government, Scottish Government and local authorities have been doing to manage the implementation of the policy and to mitigate its worst effects on the most vulnerable.
3. We intend to continue with our work in this area, but the purpose of this interim Report is threefold. To place on record our belief that the bedroom tax should be abolished and its objectives pursued by other means, secondly, to propose a number of changes to the implementation of the policy, and, thirdly to identify a number of key issues where we wish to gather more evidence.
1 DWP, Impact Assessment page 10. The total UK estimate is for 660,000 claimants affected experiencing an average reduction of £14 per week in housing benefit 2 To date we have met individuals from Comhairle nan Eilean Siar, Hebridean Housing Partnership, the Western Isles Forum of Tenants and Residents’ Associations, Fife Council, Fife Law Centre, Citizens Advice Scotland, Kingdom Housing Association, Fife Housing Association. We are currently arranging meetings in Airdrie and Castlemilk. 3 See also Welsh Affairs Committee, Second Report of Session 2013-14, The impact of changes to housing benefit in Wales, HC 159
6 The impact of the Bedroom Tax & other changes to housing benefit in Scotland
2 Measuring the impact
The aims of the policy
4. The Welfare Reform Act 2012 introduced changes to the amount of housing benefit that will be paid to those working-age claimants who live in social housing and who are deemed to have more bedrooms than their household size needs. The change in rules came into force on 1 April 2013. Those with one spare bedroom would lose 14% of their eligible rent and those with two or more spare bedrooms would lose 25%. The Department for Work and Pensions (DWP) Impact Assessment into Housing Benefit: Under occupation of social housing said that the aims of the policy would be to:
• Contain growing housing benefit expenditure;
• Encourage greater mobility within the social rented sector;
• Make better use of available social housing stock; and
• Improve work-incentives for working age claimants.4
Furthermore, the Government said that the policy would align public sector tenants with the rules already applied to tenants in the private rented sector.
5. Expenditure on Housing Benefit increased from £11 billion in 2000/01 (£15 billion in 2010/11 prices) to about £21 billion in 2010/11.5 The bedroom tax aims to save £500 million annually in the UK, including roughly £50 million in Scotland.6
Missing the Point
6. We believe that, at the very beginning of assessment, we should be making the observation that public housing providers are, in the main, supplying and maintaining homes, rather than just a collection of rooms. The social aspect of providing houses has, we believe, got to be taken into account, and this has not been done in the introduction or implementation of the bedroom tax. This restricted view of the role of public housing, seeing homes as no more than another commodity, lies at the root of many of the difficulties caused by the development and application of the bedroom tax.
Assessing impact
7. While the evidence we received suggested the policy was having an impact in Scotland, several witnesses commented on how difficult it was to judge the impact fully because not enough time had elapsed since 1 April 2013. In addition, those organisations which had tried to measure the impact did not agree on its size.
4 DWP, Housing benefit: Under occupation of social housing, June 2012 5 DWP, Housing benefit: Under occupation of social housing, June 2012 6 Q 3
The impact of the Bedroom Tax & other changes to housing benefit in Scotland 7
Numbers affected
8. There are different estimates of how many people are affected by the bedroom tax in Scotland. The Scottish Government have estimated a figure of 105,000.7 The Convention of Scottish Local Authorities (COSLA) surveyed local councils in May and, based on their survey results, estimated 82,500 households were affected.8
9. The landlord for social housing tenants in Scotland is either one of 180 Registered Social Landlords (RSLs) or one of Scotland’s 32 local authorities that still have property for rent. Social landlords in Scotland are regulated by the Social Housing Regulator (SHR). In October, the SHR published results of a survey of social landlords across Scotland.9 The SHR estimated that, as of 30 June 2013, 59,800 tenants had been affected by the bedroom tax.10
10. Kirstie Corbett, Analysis and Research Manager, Scottish Housing Regulator, said the discrepancy of over 22,000 between the SHR and the COSLA surveys was possibly due to the fact the SHR survey did not get a response from 100% of landlords (which could have discounted as many as 145,000 tenants). She also said that the COSLA survey used estimates based on working age housing benefit recipients using information sourced from local authorities, whereas the SHR survey was based on current tenant numbers and the number of tenants under-occupying, data sourced from the landlords.11
Reasonable offer
11. Several witnesses told us that they wanted the bedroom tax to be abolished.12 Two arguments were commonly put to us. The first being the fact that the policy affects people in a way that they could not have foreseen when they moved into their present homes.13 Tenants are being penalised for a decision made, not by them, but by whoever is responsible for allocation in their area. Furthermore, the tenants are being penalised for a decision to which, if they had known at the time that it would render them less well off financially, they might have objected. The second was the mismatch between the demand for smaller properties and the supply of smaller properties.14 Several witnesses felt that the bedroom tax should only be applied to those tenants who were given a reasonable offer to downsize and then refused it. For example, Alastair MacGregor, Argyll Community Housing Association, said:
7 Ev 174 8 COSLA Briefing, Housing Impacts of Welfare Reform, 8 July 2013. 30 out of 32 councils responded to the COSLA survey, including local authorities responsible for some 310,000 tenants across Scotland. COSLA estimated 68,500 affected by the 1 bed reduction and 14,000 by 2 bed reduction 9 Scottish Housing Regulator, Early Impacts of Welfare Reform on rent arrears, 23 October 2013 10 The Scottish Housing Regulator estimated that, of those affected, 49,900 were affected by the 1 bedroom reduction and approximately 9,800 were affected by the impact of the 2 bedroom reduction. This is only for those tenants of landlords which responded to the survey. In total, 137 RSLs and 20 local authorities responded—landlords responsible for 80% of all social housing tenants in Scotland. 11 Q 937 12 Q 27, Q 345, Q 968 13 Q 4 14 Ev 198. See also Q 569
8 The impact of the Bedroom Tax & other changes to housing benefit in Scotland
Our position is that we want to see the bedroom tax repealed. However, if it cannot be repealed, we believe there should be a recognition that, if at the point when the legislation came in someone was under-occupying, through no fault of their own, they should be able to agree with their landlord to work towards a move over a period of time, if that is possible. That would be a reasonable compromise to try to address that particular issue between the supply that is available and under- occupancy.15
12. David Bookbinder said this could have been part of a transitional period:
I think repeal would be the way to deal with it, as you could then design a proper system. If you were not to do that, you could introduce classes of exemption or transitional protection, or suspend it while people are waiting to receive an offer, or apply it once they have received an offer that would alleviate the situation and they have turned it down.16
Transitional arrangements would address the problem of people being penalised for the fact that the decision was made for them and before the policy was introduced. It would also take into account the mismatch in demand and supply of smaller properties to move into.
13. There are different factors that would have to be taken into account as to what constituted a reasonable offer. This could include factors such as whether it led to disruption of family and community ties, the loss of employment opportunities, or disconnect to established public services such as healthcare. We were told that it would not be possible to apply a simple “more than x miles is unreasonable” rule because a reasonable distance in an urban setting with reliable public transport and wider choice is different to what is reasonable in the Borders, Highlands or the Islands.17
14. For the avoidance of doubt, we wish to place on the record that the view of the Scottish Affairs Committee is that the bedroom tax should be abolished and its objectives pursued by other means.
15. We believe that the impact of the bedroom tax should be ameliorated by the proposals in our Report. In particular, we believe that a tenant should only be subject to the bedroom tax if they are judged to be under occupying social housing and decline to move to a smaller property in the same community when provided with a reasonable offer. We would welcome further evidence on what factors should be taken in to account when considering what would be a reasonable offer.
Arrears
16. In their survey undertaken in May, COSLA found three quarters of councils had reported a rise in rent arrears since the introduction of the bedroom tax.18 COSLA has
15 Q 345 16 Q 27 17 See Q 164, Q 388 and Qq 878-880 18 COSLA briefing, Housing impacts of welfare reform – Survey of councils, 8 July 2013
The impact of the Bedroom Tax & other changes to housing benefit in Scotland 9
since continued work on the impact of the bedroom tax with six local authorities.19 COSLA said that 20,021 tenants in the six local authorities were impacted by the bedroom tax and, of those, 7,445 (or 37%) were in arrears on 31 March 2013, and 13,712 (68%) were in arrears by 30 September 2013. This represented an increase of 31% in the number of people affected by the bedroom tax being in arrears, over the first six months of the bedroom tax.20
17. The SHR survey also found that arrears were increasing. Kirstie Corbett said:
Essentially, the big picture headlines are that rent arrears are rising, both for local authorities and registered social landlords. In response to our survey, in figures for June 2013, we see that there has been a year-on-year increase in arrears levels as a percentage of rental income from 2011 through to 2012 and 2013.21
18. However, the level of rent arrears as a percentage of annual rental income appeared to have reduced since the bedroom tax came into effect. The figure of rent arrears as a percentage of annual rental income went from 3.70% in March 2013 to 3.57% in June 2013.22 When asked why that might be the case, Michael Cameron, Chief Executive, Scottish Housing Regulator, said it could be down to mitigation measures by the landlord and the efforts of tenants to make up the shortfall. In addition, he explained that it was usual for there to be seasonal variations in rental arrears, which tended to rise during school holidays and Christmas. At other times, the level of arrears would be expected to go down. In the first three months of the bedroom tax, the reduction in the level of arrears was smaller than would have been expected, compared to previous years.23 At the same time, the majority of RSLs (93%) who responded to the SHR survey estimated that the bedroom tax accounted for around 10% or less of their arrears, and the landlords were either very confident or fairly confident in their estimate of the proportion of arrears due to the bedroom tax.24
Demand for smaller properties
19. One of the policy aims of the bedroom tax is to use social housing more effectively. In time, under occupation should reduce if those who wish to move to smaller accommodation, rather than make up the shortfall in rent, are able to do so. It does appear that demand to downsize has increased, and is larger than the ability of social landlords to re-house all those who wish to move. Our witnesses told us that there is an undersupply of smaller properties. Dr Mary Taylor, Scottish Federation of Housing Associations, said:
The lucky few, if I can put it like that, have had help from members to enable them to downsize and to move into smaller accommodation, where it is available, but the scale of the demand for smaller accommodation to avoid being penalised is greater
19 North Lanarkshire, North Ayrshire, Dundee, Highland, Edinburgh and Fife 20 Ev 205 21 Q 861 22 Scottish Housing Regulator Report, page 5. This is for RSLs not local authorities as landlords. 23 Qq 867-868 24 Scottish Housing Regulator Report
10 The impact of the Bedroom Tax & other changes to housing benefit in Scotland
than our ability to respond. That is essentially the difficulty that we have. There is a structural mismatch between supply and demand.25
Keith Dryburgh, Citizens Advice Scotland, said:
Because there is a bit of a mismatch between demand for and supply of one-bedroom housing in Scotland, with the best will in the world, most people will not be able to get a one-bedroom property. I think that 60% of tenants need a one-bedroom property, but only 26% of tenancies are actually one bedroom, so it is a physical impossibility that everybody could move.26
20. At the same time, those deemed to be under occupying who ask to downsize will join a queue of other tenants already on a waiting list, such as older people looking to downsize and homeless people looking for a first flat.27 David Bookbinder, Head of Policy and Public Affairs, Chartered Institute of Housing in Scotland, told us that the Department for Work and Pensions estimate that 85% of tenants affected will not move or would not be able to move.28
21. There are other impacts which are much more difficult to survey or quantify or to attribute directly to the bedroom tax, such as levels of household debt and fear of losing one’s home. Keith Dryburgh said Citizens Advice Scotland received about 200,000 inquiries a year from clients relating to the benefits system, and that:
Around 20,000 of those issues last year were to do with housing benefit—an increase of 11%. Most of that increase was towards the end of the year—around March—in the lead-up to the implementation of the under-occupancy rules.29
22. It is difficult to determine the full impact of the bedroom tax because the policy only came into force on 1 April 2013. However, it is clear that households are being placed in difficult circumstances and there are upward pressures being placed upon arrears. We welcome the work being carried out to monitor the policy by both the Scottish Housing Regulator and COSLA. We recognise they are well placed to measure the impact and we hope that they will continue their survey work. We will continue to seek evidence on the impact of the bedroom tax in Scotland.
Consequences for landlords
23. If tenants are unable to pay their rent then the social landlord, be it a local authority or RSL, will build up arrears and this will have consequences. Alastair MacGregor, Chief Executive, Argyll Community Housing Association, told us that Housing Associations have long term plans which rely on being able to borrow money. He identified the effect of increased arrears:
25 Q 3 26 Q 144. See also Ev 169 27 Q 15 28 Q 3 29 Q 140
The impact of the Bedroom Tax & other changes to housing benefit in Scotland 11
First, it could put pressure on the borrowings we have to pay back. Secondly [...] it means that we have to divert resources from other aspects of housing management and services that we have signed up to deliver for our tenants.30
Mr MacGregor explained further:
Effectively, income that we lost as a result of increased rent arrears would have a direct impact on our ability to carry out repairs to our houses, to do cyclical maintenance and to invest in new heating systems and things like that.31
Similarly, the Chartered Institute of Housing said:
And at a time when subsidy reductions are making it increasingly difficult to build new social housing at genuinely affordable rents, the welfare changes make investment in new homes even more risky than it already is.32
24. Councillor Matthew Kerr, of Glasgow City Council, said that the main problem of reduced income from rent was the effect it had on the ability of social landlords to borrow. He suggested that, rather than increase the money available for a discretionary benefits system, it would be preferable to provide the money to social landlords, so making it easier for them to secure loans for developments and new builds. He did not see any impediment to the Scottish Government providing that support if it wished.33 We believe that ways should be sought to overcome any adverse effect upon the ability of social landlords to borrow which has arisen as a result of the bedroom tax. We seek further evidence as to how this can best be achieved.
25. If rent arrears continue to increase, then social landlords will move further into debt. As their debts increase, it will become more expensive for social landlords to borrow money to invest in new housing. This will make it more difficult to address long-term housing need in Scotland. We heard that it would be possible for the Scottish Government to write off debt accrued by registered social landlords and local authority landlords as a result of the bedroom tax. We believe that, where debts arising from the bedroom tax are irrecoverable, this money should be written off by the housing provider and appropriate recompense made by the Scottish Government. We would welcome views as to how best this could be achieved.
Evictions
26. Some local authorities, which are landlords, in Scotland have adopted a ‘no eviction’ policy towards those who found themselves unable to make up the shortfall in rent.34 Most councils which have adopted this policy have done so with caveats, such as: “assuming that reasonable efforts have been made to pay.”35 We were told that most local authorities
30 Q 495 31 Q 496 32 Ev 153 33 Qq 612-616. Q 696. Qq 961-966 34 Q 66 35 Q 294
12 The impact of the Bedroom Tax & other changes to housing benefit in Scotland
would be unlikely to evict a tenant, assuming that they were making reasonable efforts to pay, regardless of whether or not they have explicitly adopted a no evictions policy.36 It would be a different matter if a local authority said it would not, under any circumstances, evict a tenant for non-payment of rent. A blanket no eviction policy would run the risk of encouraging non-payment. We are unaware of any Housing Association that has adopted a ‘no evictions’ policy.37 Non-payment to a social landlord or a local authority landlord would add to the arrears of the landlord. This would reduce resources available for maintenance and investment. We would welcome further evidence from Registered Social Landlords and Local Authority landlords as to the trends in the scale of arrears since 1 April 2013, and to what extent the arrears can be attributed to the bedroom tax.
27. We are opposed, in principle, to eviction as a result of the imposition of the bedroom tax but recognise the moral hazard of suggesting that the payment of rent is, in any way, a voluntary activity. In the short term we believe that DHP money should be utilised to make up any shortfall, failing which the Scottish Government should financially support housing providers. For the longer term we would welcome evidence as to how these issues are best tackled.
Homelessness
28. Local authorities have a statutory responsibility to provide for homelessness, and social landlords have to make property available for the local authority to fulfil that responsibility.38 Councillor Matt Kerr, Executive Member for Health and Social Care, Homelessness and Welfare Reform, Glasgow City Council, said that they were finding it difficult to move people out of temporary furnished accommodation into a longer term tenancy because the demand for one bedroom property had increased due to tenants wishing to downsize. Similarly, the council did not want to move someone into a two bed property, if it meant there was a high chance they would start building up arrears immediately.39 Mr MacGregor said Argyll CHA had a turnover of 450 properties a year and 50% of those had to be available to house those made homeless. This adds to the competition for the limited number of one bedroom flats available. We would welcome examples of where this situation has occurred, and evidence as to how it should be tackled.
House building
29. The problem of demand outstripping supply for the appropriate sized property was repeatedly made. The introduction of the bedroom tax has increased demand for tenants to downsize, and particularly for one bed properties. If more smaller properties were built, there would obviously be a time delay between planning, building and having a finished property available to let. In addition, building two one bedroom flats does not cost the same as building one two bedroom flat. We were told that landlords would prefer the
36 Q 58, Qq 222-225 37 Q 59, Q 225 38 Q 378, Q 341 39 Qq 505
The impact of the Bedroom Tax & other changes to housing benefit in Scotland 13
flexibility provided by building a two bedroom flat rather than a one bedroom flat, if the marginal cost is not prohibitive. There are benefits of scale that come with building more units per development—each unit proportionately becomes cheaper—but large scale developments are not necessarily appropriate in every location.40
30. The current target for new homes to be built in Scotland is 6,000 per year, but some of our witnesses, including Shelter Scotland, are campaigning for 10,000 new homes to be built in Scotland per year.41 While it is important to address the issue of numbers, it is also important to address the mix. Argyll Community Housing Association said that if they decide to build one bedroom flats it would be part of a long term approach to addressing the balance of large and small properties.42 We recognise that social landlords are best placed to assess and determine the housing need in their area, and that any increase in the number of smaller properties is done as part of the social landlords’ strategy to manage housing need in their area, in accordance with their long term objectives. The lack of commitment to build sufficient housing for Scotland’s people has been one of the failures of devolution and we would hope that this matter is addressed more seriously in the future.
Consequences for tenants
31. We understand the Government has said that tenants affected by the policy have a number of options. Among those mentioned to us by witnesses were the following: move to a smaller social rented property, move into the private sector, make up the shortfall through increased earnings or reduced spending, rent out a bedroom to a lodger, or apply to the local authority for financial support (we discuss this last option in the next chapter). Being forced into making such decisions can cause distress. Dr Mary Taylor, Chief Executive, Scottish Federation of Housing Associations, told us at the beginning of the inquiry:
Tenants on low incomes are very anxious about the situation they are in and are unsettled, feeling that they are not able to live in their own homes.43
32. Keith Dryburgh, Citizens Advice Scotland, said that part of the impact of the bedroom tax has been the “sudden jar” to tenants,44 and that only after they realise that they are building up arrears do they consider their options:
A lot of people are in limbo because they are trying to take short-term and long-term actions to mitigate the impact, either by trying to move home or by applying for discretionary housing payments without success. So a lot of people are in a position where they are building up quite a lot of arrears. They are trying to take actions to
40 Information provided by Orkney Council (www.parliament.uk/documents/commons-committees/scottish- affairs/Orkney%20Islands%20Council.pdf) 41 Q 352 42 Q 353 43 Q 3 44 Q 156
14 The impact of the Bedroom Tax & other changes to housing benefit in Scotland
mitigate the impact, but they are struggling to do so. The majority of people we see are building up arrears and have nowhere to go at the moment.45
33. There is an added Catch 22 to this situation, in that some social landlords will not consider a tenant’s request to transfer, including downsizing to meet the aims of the bedroom tax, if the tenant is in arrears.46 We believe that, if a tenant has built up arrears due to the bedroom tax and wishes to downsize, they should be allowed to move even if arrears have not been cleared.
34. We would welcome further evidence as to the impact upon tenants and what those tenants affected are doing to make up the shortfall in rent.
Private sector
35. Someone affected by the bedroom tax can choose to move into the private sector. We have found it difficult to determine the number of tenants who have chosen to move from social housing into the private sector. However, there was a general consensus that the rent for a property in the private sector is more expensive than the rent of a comparable property in the public sector.47 If those tenants expected to downsize move into the private sector to avoid the bedroom tax, it is likely that the housing benefit bill will increase.
36. Evidence from the Scottish Government said that the total cost of Housing Benefit in Scotland has increased over the last ten years by 21%, yet housing benefit expenditure in the social rented sector has increased by only 6%.48 Indeed Dr Mary Taylor, SFHA, said that most of the growth in housing benefit spending came from tenants receiving Local Housing Allowance for higher rents in the private sector.49 The private sector has traditionally been seen as meeting the needs of a transient population rather than the needs of families and those who want to make a long-term commitment to a home.50 Someone moving from a social sector landlord would probably be giving up a secure tenancy for a much less secure tenancy.51 It is perverse to provide a financial incentive for a tenant to move from the public sector to the private sector when this actually costs more. We believe that, where this is the only option, the tenant should be assisted to remain in their existing accommodation until suitably priced housing becomes available. We would welcome more evidence on what work is being done to monitor any movement of tenants from the public to the private sector. We would also welcome evidence on changes to the Local Housing Allowance in Scotland since 1 April 2013.
37. We would welcome more evidence on the decisions tenants affected by the bedroom tax are taking to make up the shortfall or move into a smaller property.
45 Q 141 46 Citizens Advice Scotland, Voices from the frontline... The bedroom tax and disabled people, November 2013 47 Information provided by Orkney Council. National Housing Federation, The Bedroom Tax Some home truths; 28 March 2013, Shelter Scotland, Bedroom tax will cost us more, 25 February 2013 48 Ev 174 The Scottish Government 49 Q 32 50 Q 11 51 Q 33
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Rural Scotland
38. Large parts of Scotland are rural with small, isolated communities. Travel distances are exacerbated by the islands and the nature of Scotland’s coastline. The number of suitable properties for rent can be quite small, and the turnover which would make properties available can be low. If a suitable property cannot be found locally, then moving house can involve long distances. Alastair MacGregor, Argyll and Bute, described the situation in his area:
One of the key challenges that we have is that only 26% of our housing stock is one- bedroom accommodation. If you take the island of Islay as an example, we have 329 properties on the island, of which only 66 are one-bedroom properties. Ten of them are sheltered housing, which is obviously allocated differently. We have 19 cases affected by the bedroom tax and our turnover of houses on Islay every year is 19, so our ability to respond in a local situation to move people is constrained.52
39. Orkney Council said that, of their 239 one bedroom flats, only 22 became available in 2012-13. There are 463 applicants already on the Council’s housing waiting list for a one bedroom property. Social housing is seen as serving a social purpose and contributes towards creating sustainable communities.53 For example, Orkney Islands Council said:
The Council has given a strategic commitment to endeavour to sustain the outer and inner isles of Orkney. Encouraging transfers to the Orkney mainland to effectively facilitate downsizing undermines the success of that strategic commitment.54
40. There is a tension between a landlord’s allocation policy of trying to maintain sustainable communities with settled families, particularly in very rural areas, and the UK Government’s policy on housing benefit reform which would incentivise people to move out of such communities. We would welcome more evidence on the distances that tenants, who are affected by the bedroom tax, have had to travel to move into a smaller property.
Allocation policies
41. How social landlords allocate available property is obviously important for how they match household size with tenants. It is clear that social landlords allocate on factors other than just the size of a household and the number of bedrooms. This may, by design, lead to households’ under-occupying. Michael Cameron, Chief Executive, Scottish Housing Regulator, said:
There has been a general policy in Scotland that houses would be built in such a way that they could accommodate a person through their lifetime of need, and that may very well mean that they were initially accommodated in a house that technically could have been larger than their requirements. There is also a clear understanding
52 Q 345 53 Q 760 54 Information provided by Orkney Council (www.parliament.uk/documents/commons-committees/scottish- affairs/Orkney%20Islands%20Council.pdf)
16 The impact of the Bedroom Tax & other changes to housing benefit in Scotland
within Scottish social landlords that people would be able to remain in their house even when the need for a house of that size was perhaps diminishing, as family situations changed.55
42. Tenants who are deemed liable for the bedroom tax can make a request to their landlord to move to a smaller property. The landlord would have a range of criteria as to who to house where. The number of one, two, three or four bed properties will vary according to the historical mix and the new build policy of the social landlord. RSLs may be addressing the legacy housing stock that was transferred from the local authority. It takes time to adjust housing provision for a changing population.
43. Those affected by the bedroom tax would not necessarily be given priority when a suitable property becomes available. Councillor David Ross, Deputy Leader, Fife Council said his Council would not change its policy on whether to prioritise those wishing to downsize:
We have had some discussion on the policy level about that and we have taken the decision that we are going to stick with our assessment of need.56
He clarified that by saying that Fife Council would “do our very best” where tenants say they are in financial difficulties and want to move. Conversely, the Western Isles Residents and Tenants Association gave us an example of a family that had been told they had been moved down the waiting list, because priority had been given to those needing to downsize.57
44. Housing associations already offer financial incentives to help households move.58 Fife Council has a facility to encourage tenants to make mutual exchanges. It also has a transfer incentive to help people downsize, previously used mainly by retired people who wished to move out of a large family home, but now being aimed at those liable for the bedroom tax. We would welcome more evidence as to the incentives offered by local authorities and RSLs to help those who wish to move to a more suitable property and how these are funded.
45. One of the consequences of the bedroom tax is that it could lead to landlords altering their allocation policies. There is a danger that landlords will move away from allocating homes according to a broad range of factors, such as allowing room for a family to grow. This would be in contrast to the aim of some landlords, which we believe should be encouraged, to try to create sustainable communities, particularly in remote parts of Scotland.
46. We understand that one of the Government’s aims for the bedroom tax is to improve work-incentives for working age claimants. We would welcome evidence from the Government on the extent to which the bedroom tax has encouraged unemployed tenants to find employment.
55 Q 877 56 Q 746 57 Ev 195 58 Q 28
The impact of the Bedroom Tax & other changes to housing benefit in Scotland 17
3 Mitigation
Discretionary Housing Payments (DHP)
47. If a tenant cannot make up the shortfall in rent through increased earnings or reduced spending, taking in a lodger, or otherwise changing their financial circumstances, and they are not able to downsize, then they can apply to the local authority for a Discretionary Housing Payment (DHP). DHPs are payments that can be made by a local authority to a claimant, where the local authority considers that the claimant needs additional financial help towards housing costs. A DHP is made in addition to other benefits.59 Local authorities are allocated a total amount they can spend on DHP from the Department of Work and Pensions (DWP). The local authority can add to the DWP allocation from its own resources, but there is an upper cash limit to the total the local authority can spend.60 (Essentially, for every £1 of DWP money, the local authority can “top up” with £1.50 of its own money. The DHP total cash limit would be £2.50.) We see no logic in this £1.50 limit and recommend to the Government that it be abolished. We would then expect the Scottish Government to reimburse local authorities for any DHP expenditure incurred by a local authority if it chose to “top up” beyond £1.50 of its own money.
48. Before housing benefit reforms were announced in the 2010 Budget, the total budget for DHP for the whole UK was £20 million per year. The total funding made available by the DWP for 2013-14 was to be £155 million. DHPs are not just for those affected by the bedroom tax, but relate to a range of welfare reforms. The £155 million consists of the baseline £20 million, which was available each year before 2010, plus £40 million in respect of changes to Local Housing Allowance, £65 million to provide short term support to those affected by the Benefit Cap, and £30 million for those affected by the bedroom tax.61 The other uses of DHP, particularly the Benefit Cap, are more prevalent in other parts of the UK. This has resulted in some London boroughs having a higher DHP allocation than cities in Scotland.62
49. The £30 million bedroom tax portion—made up of £25 million for significantly adapted properties for the disabled, and £5 million for foster carers63—was then supplemented in July 2013 by an additional tranche of £5 million to be divided among 21 of the most rural local authorities, and an additional fund of £20 million which local authorities can make a bid to the DWP for a share.64 The £20 million available from the DWP for local authority bids does not count as DHP allocation for calculating maximum
59 The regulations covering DHPs are The Discretionary Financial Assistance Regulations 2001 60 The legislation which specifies the overall limit on expenditure is Article 7 of The Discretionary Housing Payment (Grants) Order 2001. 61 DWP Housing Benefit and Council Tax Benefit Circular S1/2013 62 DWP Housing Benefit and Council Tax Benefit Circular S1/2013 63 See HC Deb 12 March 2013 WS. The £5 million for foster carers was still made available after the Government agreed to allow an exemption for foster carers. 64 DWP Housing Benefit and Council Tax Benefit Circular S5/2013
18 The impact of the Bedroom Tax & other changes to housing benefit in Scotland
top up.65 The total available from the DWP for DHP in 2013-14 is £180 million, but only £55 million is identified as being for the bedroom tax.
Total DHP allocation according to each benefit 2011-12 2012-13 2013-14 Baseline DHP Funding 20 20 20 LHA reform 10 40 40 Bedroom Tax 55 Benefit Cap 65 30 60 180
It should be noted that the £55 million was not known to be available at the beginning of the financial year. The amount local authorities have had available to spend on DHP has increased gradually during 2013-14. We were told that local authorities did not know how much they would have available in 2014-15.66
DHP and Scotland
50. The DWP Impact Assessment estimated the bedroom tax policy would save about £480 million in 2013-14 and £500 million in 2014-15.67 David Bookbinder said that roughly £50 million of that £500 million saving would come from savings in Scotland.68 Estimates of the amount available to offset this loss varied slightly. Shelter estimated that the DWP had made £16.5 million available for DHP in Scotland.69 In addition, the Scottish Government has provided £20 million—essentially to allow local authorities to top up without having to divert resources from elsewhere.70 COSLA said that the maximum funding currently available in Scotland in 2013-14, if all local authorities used the Scottish Government funding to top up to the maximum, would be about £33 million.71 If Scottish local authorities successfully won 10% of the £20 million DWP bid fund, then this could be increased by an extra £2 million. Whichever total for additional funding is correct, it is clear the extra DHP will not equal the total reduction in housing benefit. In other words, if all the local authorities in Scotland spent all their DHP on alleviating the loss of housing benefit due to the bedroom tax, it would not make up the shortfall brought about by the bedroom tax.72 We would welcome further evidence as to how the Scottish Government could help to make up the shortfall between the loss in housing benefit in Scotland and the limit to what is available through DHP to Scottish local authorities.
65 Ev 205 66 Q 633 67 DWP Impact Assessment, 28 June 2012 68 Q 3 69 Citizens Advice Scotland, Voices from the frontline... The bedroom tax and disabled people, November 2013 70 Q 596. See also The Guardian, Scotland will give £20m to mitigate effects of bedroom tax, 11 September 2013 71 Ev 205 72 See Qq 604-609. Ev 178
The impact of the Bedroom Tax & other changes to housing benefit in Scotland 19
Concerns around DHP
51. Tenants are informed by their local authority if they are liable for the bedroom tax. The tenant has to be aware that they might be able to receive support by applying for a DHP, then go through the application process. The local authority has to consider the application and satisfy itself that the claimant is entitled to Housing Benefit, or Universal Credit that includes a housing element, and requires further financial assistance towards housing costs. Not everyone who is affected by the bedroom tax is automatically eligible for a DHP.
52. The DWP has issued guidance for local authorities on how to administer DHPs which re-iterates that it is important that local authorities are flexible in their decision making.73 Further, it said that it was important for local authorities to publicise the existence of DHPs as “they are a key element of the Government’s strategy for managing reductions to Housing Benefit”.74 There is an appeal process for those whose claims that are unsuccessful.
53. We heard several criticisms of the DHP process. Citizens Advice Scotland told us that demand had “gone through the roof”—North Lanarkshire had the highest increase in applications for the DHPs across the whole of the UK.75 Fife Council told us that applications to DHP had risen by 800% compared to last year.76 COSLA said that, six months after the bedroom tax came into effect, local authorities had received 42,247 applications for DHP and made 27,828 awards. While funding for DHP has increased, several witnesses commented on the postcode lottery nature of how DHPs were being made.77 We discussed the inconsistent application of DHP across different local authorities with COSLA. They said that, as of the end of September 2013, six months after the bedroom tax came into effect, four local authorities have committed over 100% of their DWP allocation while three have committed less than 30% of their DWP allocation.78
54. We also heard comments as to the level of awareness of DHP among those affected. Keith Dryburgh, Policy Manager, Citizens Advice Scotland, said that a lot of tenants were unaware DHP existed, and only became aware once they had started to fall behind in their rent. He said:
People have limited knowledge, but a lot of them ask their friends, who tell them about DHPs and so on, so some of them come in and say, “Can you help me with a DHP?” However, I do not think there is universal knowledge of that.79
55. We heard that the people who the DHP process was intended to target appeared to not be aware that the support was there. Some local authorities have identified that significant numbers of tenants, liable for the bedroom tax, are accumulating rent arrears, but have not yet made applications for a DHP. COSLA said that some local authorities, such as
73 DWP, DHP Guidance Manual, April 2013 74 DWP, DHP Guidance Manual, April 2013, page 32 75 Q 206. See also Q 504 76 Q 661 77 Q 343 78 Ev 205 79 Q 173
20 The impact of the Bedroom Tax & other changes to housing benefit in Scotland
Highland Council and Renfrewshire Council, were being more pro-active in targeting those who could benefit by applying for a DHP. Morag Johnston, Glasgow City Council, said the DWP had encouraged local authorities to use DHP in circumstances where two adults needed two rooms:
Those individuals were encouraged to apply for the DHP, but we are seeing very few people in those circumstances coming through and applying for DHPs. Again, as a local authority we will not necessarily know who would be eligible. [...] I have no doubt there will be individuals who will not be getting everything they are entitled to either directly through the housing benefit regulations or, potentially, through a discretionary housing payment.80
Ms Johnston said that the average DHP application that Glasgow City Council had approved was for a period of about 12 weeks, and that to award DHPs for longer periods would have created a risk of running out of money before the end of the year.81 Ms Johnston did say that if a tenant, who was disabled, applied to Glasgow City Council for a DHP then they would consider making the DHP for 12 months. However, Glasgow had not made many payments to disabled tenants.82 Similarly, another local authority, Fife Council, said they had approved DHP applications for 75% of the housing benefit loss, rather than make up 100% of the shortfall in rent, because otherwise they were unsure if their budget would last until the end of the year.83 We were told of local authorities that have adapted their policies and practice as a result of the increase in DHP funding, and some are now revisiting earlier applications.84
56. We heard that DHP is for more than just the bedroom tax. However, Councillor Kerr said that most of the DHP payments made by Glasgow City Council so far in 2013-14 have been to address the bedroom tax.85 While the Benefit Cap appeared to affect fewer people in Scotland than in other parts of the UK,86 demand for Local Housing Allowance is increasing in Scotland.87 The impact of the bedroom tax has to be considered alongside other pressures on local authority resources, including Universal Credit, to help predict demand from Housing Benefit claimants who might need financial support through the DHP process.88
57. DHP appears to be, if not the only, then the biggest source of help for many affected by the bedroom tax. As such, it is important to understand the effectiveness of the DHP process. As Councillor Kerr, from Glasgow City Council, told us:
80 Q 530 81 Q 618 82 Q 621 83 Ev 198. Q 690 84 Ev 205 85 Q 507 86 Q 207 87 Q 206 88 Q 645
The impact of the Bedroom Tax & other changes to housing benefit in Scotland 21
We are moving from a system that actually gets decisions right the first time to a system that is more discretionary. That is a fundamental change in how the welfare system operates. While there should be room for discretion, we should not have a system relying on discretion.89
58. While we understand and accept the need for there to be an element of discretion in how a local authority manages housing issues in the local area, it is unacceptable that someone could be placed in housing need by virtue of being on one side of the road, and another person in exactly the same circumstances be provided with a safety net because their claim was handled by a different local authority applying different criteria.
59. We therefore believe that there has to be a balance between decentralisation and equity of outcome. Therefore we reject the concept that DHP payments should be entirely discretionary and believe that criteria for eligibility should be established throughout the United Kingdom. Local discretion would remain by allowing account to be taken of local circumstances by payments above the safety net.
60. It is very important that local authorities know how much they will be allocated by the DWP for DHP next year so they can plan the level of financial support they can provide. This is within the context of increasing numbers of applications for DHP. We believe the Government must announce the size of the DHP budget for at least the next two financial years as soon as possible. The Scottish Government should likewise make clear the commitment it is making to supplement the DHP budget over the same time period.
61. The DWP has commissioned a review of the reforms to housing benefit, but this is not due to report before Spring 2015. The DWP is collecting data on the number of DHP approvals, the intended outcome when making an award, and the amount.90 It is important that the DHP process is easily understood and well administered. The Department of Work and Pensions will once its review concludes have data relating to the administration of the DHP system across Scotland. It could be helpful, in the interest of spreading best practice and applying DHP in a consistent manner, for the DWP to make that data widely available.
62. We welcome the extra resources made available for DHP in rural areas and we note that a high proportion of the local authorities that benefitted from this increase in resources are in Scotland. We would welcome more evidence on the number of applications for DHP submitted by tenants in those local authorities, the number successful and the number rejected, and the reasons why.
Level of charge
63. The implication of the bedroom tax for someone deemed to have one spare room is that they lose 14% of their eligible rent. We were told that, in some cases, the 14% reduction in housing benefit is greater, in cash terms, than the difference in rent from that
89 Q 507 90 DWP Discretionary Housing Payments Guidance Manual, April 2013
22 The impact of the Bedroom Tax & other changes to housing benefit in Scotland
of a two bedroom property to a one bedroom property. For example, the average weekly rent for a two bedroom apartment from Glasgow Housing Association is £68.08 and for a one bedroom apartment is £62.62—the drop in weekly rent is £5.46. But a 14% reduction from £68.08 would mean a reduction in housing benefit of £9.53.91 In these circumstances there appears to be an element of punishment attached to the bedroom tax which we believe is inappropriate. We believe that where a 14% or 25% deduction recovers more than the differential in rent between properties of different sizes, then the tax should be reduced to remove any element of penalty.
Exemptions
64. The regulations determining who is liable for the bedroom tax provide for the following groups either to be exempt or to be given extra support:
• pensioners and their partners • homeless people living in certain types of temporary accommodation • live-in carers or carers staying overnight • people who receive care, support or supervision from their landlord • parents of students whose main residence is the family home • foster carers, provided they have fostered a child within the last 12 months or become a registered foster carer in the last 12 months • bereaved families (who will be given 1 year’s grace to come to terms with their loss) • parents of armed forces personnel (who are allowed to retain their adult child’s room if they are deployed on operations)92
65. There are no blanket exemptions for disabled tenants,93 although the possibility of allowing disabled tenants to be exempt was discussed during the passage of the Welfare Reform Bill.94 Citizens Advice Scotland said that, of the 105,000 households they think are affected by the bedroom tax in Scotland, an estimated 83,000 report an adult in the household with a Disability Discrimination Act recognised disability.95 Keith Dryburgh from Citizens Advice Scotland said, “79% of households in Scotland that are affected have a disabled person”.96 David Bookbinder said that “that around 70% to 75% of cases do not have a spare room as you or I would understand it”,97 and that commonly it was because the occupants would be “one or other type of disabled household.”98
91 Ev 207. See also Ev 195 92 DWP Press Notice, Housing Benefit: data published on reforms to restore fairness, 13 November 2013 93 There is an exemption for a non-resident carer who provides overnight care 94 Q 10 95 Ev 169 96 Q 249 The witness pointed out that this compared to 63% of households across the whole of Britain. 97 Q 38 98 Q 39
The impact of the Bedroom Tax & other changes to housing benefit in Scotland 23
66. The Government has increased the amount of resources available for DHP with the specific aim of providing support to disabled tenants.99 We were told of many examples where disabled adults had a second bedroom for a reason related to their disability. This could include the need for specialised equipment, such as for dialysis, or because the condition does not allow for a partner to sleep in the same bed, or because the disabled person relies upon family or a friend on an irregular basis to provide care.100 Citizens Advice have suggested that severely disabled people who have been assessed as needing their own bed and bedroom due to their condition should be exempt from under occupancy charges. We believe that where a disability requires the use of a room for the storage or usage of equipment or where a disabled person’s difficulties requires a partner to sleep in a separate room then an additional room should be allocated without penalty.
67. The Court of Appeal ruled in the Gorry case that two disabled children who cannot share a room should have separate rooms.101 The Government said they would not appeal further and issued guidance that disabled children could have separate rooms, but this was not actually written into the regulations. This has led to a lack of clarity about whether disabled children are required to share a room. Keith Dryburgh said Citizens Advice was still seeing parents of disabled children who were being told that they are under- occupying.102 We believe the Government should exempt disabled children from the obligation to share, whatever their age.
68. Some disabled tenants require special adaptations to be made to their property. This can be anything from hand rails, to ramps or wet rooms. This obviously incurs cost but also alters the suitability of the property for other tenants. Orkney Housing Association also pointed out that one bedroom wheelchair adapted houses are not provided because wheelchair users commonly require a room for a resident carer or equipment. Orkney has wheelchair users, deemed to be under occupying, and who are being asked to downsize to a one bedroom wheelchair property that their Housing Association does not possess.103 So far, the Housing Association has spent £12,400 to adapt the smaller properties to which affected tenants are moving, even though they do not have a tenant who requires the adaptations in the flats they have vacated. If the average recovered from a housing benefit claimant in Scotland as a result of the bedroom tax is £12 a week then we think it is important to consider if it is cost effective to move someone in the interests of recovering £624 a year, when the move would require thousands of pounds to be spent in adapting a smaller flat among limited housing stock. Where property has been adapted to meet the particular needs of the tenants, then the costs of these adaptations should be weighed against the amount of housing benefit recovered by obliging a move. A move should not be pursued if accounts do not balance over a two year period.
99 Q 7 100 Citizens Advice Scotland, Voices from the frontline... The bedroom tax and disabled people, November 2013 101 Q 25 102 Q 154. See also Ev 166 103 Information provided by Orkney Council (www.parliament.uk/documents/commons-committees/scottish- affairs/Orkney%20Islands%20Council.pdf)
24 The impact of the Bedroom Tax & other changes to housing benefit in Scotland
69. The Government decided not to exempt disabled tenants as a category from the bedroom tax. Instead, they made extra resources available for DHP specifically to manage the needs of disabled tenants. We would welcome more evidence about the number of tenants who describe themselves as disabled, the number of applications from disabled tenants for DHPs that have been successful and the number that have been refused, and the reasons for refusal.
70. The bedroom tax should not apply to tenants who, for a period of less than twelve months, temporarily have a smaller housing need due to a change in their circumstances, but whose need will predictably return to a higher level.
71. Local authorities use information from landlords as to the number of bedrooms and the household size when deciding who is under occupying and therefore whether the tenant is deemed subject to the bedroom tax. There is a two tier appeal process for tenants who disagree with the decision of the local authority. There have been several successful tribunal cases in Fife on the grounds that the designation of a bedroom by the landlord did not satisfy minimum size standards to be considered a bedroom. The Government disagreed with the decisions, saying that the important consideration should be the composition of the household and the number of bedrooms as designated by the landlord. If, for whatever reason, the landlord did not consider a room to be a bedroom, then the Government said “the landlord should reassess whether or not that room should be classified as a bedroom and ensure that the rent correctly reflects the size of the property.”104
72. After a tier one tribunal case, the loser can appeal to tier two; only a decision at tier two can set a precedent that applies to other situations. Fife Council told us that they are awaiting the outcome of a second tier tribunal, to “provide clarity” because the first tier result cannot be applied in other cases and they wanted a decision that they could act upon.105 Councillor David Ross said Fife Council was trying to identify those tenants in similar circumstances to those who had won their appeal at the first tier, so that once there was a decision, they could take steps to pay any benefits which are due.106 This then raised the question as to the date which the housing benefit is back dated. Fife policy was to backdate to 1 April for those who won a tribunal.107 It is less clear how far housing benefit might be back dated for those who are in the same circumstances as the successful tribunal claimant, but who have not been to tribunal. We applaud this policy of Fife Council and would call on all Scottish local authorities to similarly backdate to 1 April where appropriate.
73. We recognise that the Government is wary of appealing such tribunal decisions because, if it loses at tier two, it could set a precedent that might take a proportion of those affected, out of the bedroom tax.108 We understand that local authorities, who may not support the policy and are wary of being seen as wanting to punish the tenant, are also
104 DWP, Housing Benefit Urgent Bulletin, HB U6/ 2013, 23 September 2013 105 Q 681 106 Q 685 107 Q 686. See also Q 688 108 Inside Housing, Disabled woman wins bedroom tax appeal, 8 October, 2013
The impact of the Bedroom Tax & other changes to housing benefit in Scotland 25
unwilling to appeal. The Government has said it will seek permission to appeal the Fife cases relating to room size.109 The position regarding tier one tribunal cases leaves the situation of some tenants unclear. We welcome the Government’s decision in the Fife case, in the interests of establishing some certainty. In similar circumstances where clarity is desirable we would urge local authorities, should the Government not do so, to appeal tier one tribunal decisions which have gone against them to tier two level in order to establish precedents, even in cases where the local authority may feel the decision at tier one was the right one.
74. The bedroom tax regulations require two children of the same sex under the age of 16, and two children of either sex aged under ten, to share a room. These rules differ from the allocation criteria for various social landlords we met. Fife Housing Association stated that their allocation policy would allow two children of the same sex separate rooms once one reaches 13 years. Similarly, they would allow two children who were not of the same sex to have separate bedrooms, irrespective of the children’s age.110 We heard that the Welsh Assembly Government supported a policy where all children of secondary school age should be able to have their own bedroom to enable quiet study. We support the Welsh Government’s policy that all children of secondary school age should be able to have their own bedroom to enable quiet study and urge the Scottish and UK Governments to do likewise.
109 DWP, Housing Benefit Urgent Bulletin, HB U6/2013, 23 September 2013 110 Ev 198
26 The impact of the Bedroom Tax & other changes to housing benefit in Scotland
Conclusions and recommendations
Reasonable offer
1. For the avoidance of doubt, we wish to place on the record that the view of the Scottish Affairs Committee is that the bedroom tax should be abolished and its objectives pursued by other means. (Paragraph 14)
2. We believe that the impact of the bedroom tax should be ameliorated by the proposals in our Report. In particular, we believe that a tenant should only be subject to the bedroom tax if they are judged to be under occupying social housing and decline to move to a smaller property in the same community when provided with a reasonable offer. We would welcome further evidence on what factors should be taken in to account when considering what would be a reasonable offer. (Paragraph 15)
Assessing impact
3. It is difficult to determine the full impact of the bedroom tax because the policy only came into force on 1 April 2013. However, it is clear that households are being placed in difficult circumstances and there are upward pressures being placed upon arrears. We welcome the work being carried out to monitor the policy by both the Scottish Housing Regulator and COSLA. We recognise they are well placed to measure the impact and we hope that they will continue their survey work. We will continue to seek evidence on the impact of the bedroom tax in Scotland. (Paragraph 22)
Consequences for landlords
4. We believe that ways should be sought to overcome any adverse effect upon the ability of social landlords to borrow which has arisen as a result of the bedroom tax. We seek further evidence as to how this can best be achieved. (Paragraph 24)
5. If rent arrears continue to increase, then social landlords will move further into debt. As their debts increase, it will become more expensive for social landlords to borrow money to invest in new housing. This will make it more difficult to address long- term housing need in Scotland. We heard that it would be possible for the Scottish Government to write off debt accrued by registered social landlords and local authority landlords as a result of the bedroom tax. We believe that, where debts arising from the bedroom tax are irrecoverable, this money should be written off by the housing provider and appropriate recompense made by the Scottish Government. We would welcome views as to how best this could be achieved. (Paragraph 25)
Evictions
6. We would welcome further evidence from Registered Social Landlords and Local Authority landlords as to the trends in the scale of arrears since 1 April 2013, and to what extent the arrears can be attributed to the bedroom tax. (Paragraph 26)
The impact of the Bedroom Tax & other changes to housing benefit in Scotland 27
7. We are opposed, in principle, to eviction as a result of the imposition of the bedroom tax but recognise the moral hazard of suggesting that the payment of rent is, in any way, a voluntary activity. In the short term we believe that DHP money should be utilised to make up any shortfall, failing which the Scottish Government should financially support housing providers. For the longer term we would welcome evidence as to how these issues are best tackled. (Paragraph 27)
Homelessness
8. We would welcome examples of where this situation has occurred, and evidence as to how it should be tackled. (Paragraph 28)
House building
9. We recognise that social landlords are best placed to assess and determine the housing need in their area, and that any increase in the number of smaller properties is done as part of the social landlords’ strategy to manage housing need in their area, in accordance with their long term objectives. The lack of commitment to build sufficient housing for Scotland’s people has been one of the failures of devolution and we would hope that this matter is addressed more seriously in the future. (Paragraph 30)
Consequences for tenants
10. We believe that, if a tenant has built up arrears due to the bedroom tax and wishes to downsize, they should be allowed to move even if arrears have not been cleared. (Paragraph 33)
11. We would welcome further evidence as to the impact upon tenants and what those tenants affected are doing to make up the shortfall in rent. (Paragraph 34)
Private sector
12. It is perverse to provide a financial incentive for a tenant to move from the public sector to the private sector when this actually costs more. We believe that, where this is the only option, the tenant should be assisted to remain in their existing accommodation until suitably priced housing becomes available. We would welcome more evidence on what work is being done to monitor any movement of tenants from the public to the private sector. We would also welcome evidence on changes to the Local Housing Allowance in Scotland since 1 April 2013. (Paragraph 36)
13. We would welcome more evidence on the decisions tenants affected by the bedroom tax are taking to make up the shortfall or move into a smaller property. (Paragraph 37)
Rural Scotland
14. There is a tension between a landlord’s allocation policy of trying to maintain sustainable communities with settled families, particularly in very rural areas, and the
28 The impact of the Bedroom Tax & other changes to housing benefit in Scotland
UK Government’s policy on housing benefit reform which would incentivise people to move out of such communities. We would welcome more evidence on the distances that tenants, who are affected by the bedroom tax, have had to travel to move into a smaller property. (Paragraph 40)
Allocation policies
15. We would welcome more evidence as to the incentives offered by local authorities and RSLs to help those who wish to move to a more suitable property and how these are funded. (Paragraph 44)
16. One of the consequences of the bedroom tax is that it could lead to landlords altering their allocation policies. There is a danger that landlords will move away from allocating homes according to a broad range of factors, such as allowing room for a family to grow. This would be in contrast to the aim of some landlords, which we believe should be encouraged, to try to create sustainable communities, particularly in remote parts of Scotland. (Paragraph 45)
17. We understand that one of the Government’s aims for the bedroom tax is to improve work-incentives for working age claimants. We would welcome evidence from the Government on the extent to which the bedroom tax has encouraged unemployed tenants to find employment. (Paragraph 46)
Discretionary Housing Payments
18. We see no logic in this £1.50 limit and recommend to the Government that it be abolished. We would then expect the Scottish Government to reimburse local authorities for any DHP expenditure incurred by a local authority if it chose to “top up” beyond £1.50 of its own money. (Paragraph 47)
19. We would welcome further evidence as to how the Scottish Government could help to make up the shortfall between the loss in housing benefit in Scotland and the limit to what is available through DHP to Scottish local authorities. (Paragraph 50)
20. While we understand and accept the need for there to be an element of discretion in how a local authority manages housing issues in the local area, it is unacceptable that someone could be placed in housing need by virtue of being on one side of the road, and another person in exactly the same circumstances be provided with a safety net because their claim was handled by a different local authority applying different criteria. (Paragraph 58)
21. We therefore believe that there has to be a balance between decentralisation and equity of outcome. Therefore we reject the concept that DHP payments should be entirely discretionary and believe that criteria for eligibility should be established throughout the United Kingdom. Local discretion would remain by allowing account to be taken of local circumstances by payments above the safety net. (Paragraph 59)
22. It is very important that local authorities know how much they will be allocated by the DWP for DHP next year so they can plan the level of financial support they can
The impact of the Bedroom Tax & other changes to housing benefit in Scotland 29
provide. This is within the context of increasing numbers of applications for DHP. We believe the Government must announce the size of the DHP budget for at least the next two financial years as soon as possible. The Scottish Government should likewise make clear the commitment it is making to supplement the DHP budget over the same time period. (Paragraph 60)
23. It is important that the DHP process is easily understood and well administered. The Department of Work and Pensions will once its review concludes have data relating to the administration of the DHP system across Scotland. It could be helpful, in the interest of spreading best practice and applying DHP in a consistent manner, for the DWP to make that data widely available. (Paragraph 61)
24. We welcome the extra resources made available for DHP in rural areas and we note that a high proportion of the local authorities that benefitted from this increase in resources are in Scotland. We would welcome more evidence on the number of applications for DHP submitted by tenants in those local authorities, the number successful and the number rejected, and the reasons why. (Paragraph 62)
Level of charge
25. We believe that where a 14% or 25% deduction recovers more than the differential in rent between properties of different sizes, then the tax should be reduced to remove any element of penalty. (Paragraph 63)
Exemptions
26. We believe that where a disability requires the use of a room for the storage or usage of equipment or where a disabled person’s difficulties requires a partner to sleep in a separate room then an additional room should be allocated without penalty. (Paragraph 66)
27. We believe the Government should exempt disabled children from the obligation to share, whatever their age. (Paragraph 67)
28. Where property has been adapted to meet the particular needs of the tenants, then the costs of these adaptations should be weighed against the amount of housing benefit recovered by obliging a move. A move should not be pursued if accounts do not balance over a two year period. (Paragraph 68)
29. The Government decided not to exempt disabled tenants as a category from the bedroom tax. Instead, they made extra resources available for DHP specifically to manage the needs of disabled tenants. We would welcome more evidence about the number of tenants who describe themselves as disabled, the number of applications from disabled tenants for DHPs that have been successful and the number that have been refused, and the reasons for refusal. (Paragraph 69)
30. The bedroom tax should not apply to tenants who, for a period of less than twelve months, temporarily have a smaller housing need due to a change in their circumstances, but whose need will predictably return to a higher level. (Paragraph 70)
30 The impact of the Bedroom Tax & other changes to housing benefit in Scotland
31. We applaud this policy of Fife Council and would call on all Scottish local authorities to similarly backdate to 1 April where appropriate. (Paragraph 72)
32. The position regarding tier one tribunal cases leaves the situation of some tenants unclear. We welcome the Government’s decision in the Fife case, in the interests of establishing some certainty. In similar circumstances where clarity is desirable we would urge local authorities, should the Government not do so, to appeal tier one tribunal decisions which have gone against them to tier two level in order to establish precedents, even in cases where the local authority may feel the decision at tier one was the right one. (Paragraph 73)
33. We support the Welsh Government’s policy that all children of secondary school age should be able to have their own bedroom to enable quiet study and urge the Scottish and UK Governments to do likewise. (Paragraph 74)
The impact of the Bedroom Tax & other changes to housing benefit in Scotland 31
Formal Minutes
Wednesday 11 December 2013
Members present:
Mr Ian Davidson, in the Chair
Jim McGovern Simon Reevell Graeme Morrice Mr Alan Reid Pamela Nash Lindsay Roy Sir Jim Paice
Draft Report (The impact of the Bedroom Tax in Scotland: Interim Report), proposed by the Chair, brought up and read.
Motion made, and Question proposed, That the draft Report be read a second time, paragraph by paragraph.—(The Chair.)
Amendment proposed, to leave out from “That” to the end of the Question and add “this Committee declines to give the draft Report a second reading because it has not heard a full and balanced range of evidence, including from the Government ”.—(Mr Alan Reid.)
Question put, That the Amendment be made.
The Committee divided.
Ayes, 3 Noes, 4
Sir James Paice Jim McGovern
Simon Reevell Graeme Morrice
Mr Alan Reid Pamela Nash
Lindsay Roy
Question accordingly negatived.
Main question put.
The Committee divided.
Ayes, 4 Noes, 3
Jim McGovern Sir James Paice
Graeme Morrice Simon Reevell
Pamela Nash Mr Alan Reid
Lindsay Roy
Question accordingly agreed to.
Ordered, That the Chair’s draft Report be read a second time, paragraph by paragraph.
32 The impact of the Bedroom Tax & other changes to housing benefit in Scotland
Amendment proposed, that the title of the Report be changed to the following: The Impact of the Removal of the Spare Room Subsidy from the Social Rented Sector in Scotland.” —(Mr Alan Reid.)
Question put, that the Amendment be made.
The Committee divided.
Ayes, 3 Noes, 4
Sir James Paice Jim McGovern
Simon Reevell Graeme Morrice
Mr Alan Reid Pamela Nash
Lindsay Roy
Question accordingly negatived.
Paragraph 1 read.
Amendment proposed, in line 1, to leave out from “The removal of the spare room subsidy” to “implications for social landlords” in line 9, and insert:
Local Housing Allowance, which came into force on 7 April, 2008 for all new tenants in the private sector, meant that housing benefit in the private rented sector was thereafter calculated on the basis of the number of rooms the household required. This policy was extended to include all tenancies in the social rented sector on 1 April 2013. The aim of extending this policy was to reduce housing benefit expenditure and to use existing public sector housing stock more efficiently. The Government estimated that 80,000 claimants in Scotland would be affected by the removal of the spare room subsidy, with an average weekly loss of £12. This represented approximately 33% of the working age housing benefit claimants in Scotland.1 Those claimants will have to make up the shortfall between housing benefit and rent each week, or move to a smaller property. The removal of this spare room subsidy also has implications for social landlords. —(Mr Alan Reid.)
Question put, that the Amendment be made.
The Committee divided.
Ayes, 3 Noes, 4
Sir James Paice Jim McGovern
Simon Reevell Graeme Morrice
Mr Alan Reid Pamela Nash
Lindsay Roy
Question accordingly negatived.
Paragraph accordingly agreed to.
Paragraph 2 read and agreed to.
Paragraph 3 read.
The impact of the Bedroom Tax & other changes to housing benefit in Scotland 33
Amendment proposed, in line 21, to leave out from “but the purpose of this interim Report” to the end and insert:
but the purpose of this interim Report is to identify a number of key issues where we would like to gather more evidence, and where we think the implementation of the policy could be improved to mitigate its worst effects. We urge the Government to give serious consideration to our findings in pursuing further reforms in relation to housing benefit. —(Mr Alan Reid.)
Question put, that the Amendment be made.
The Committee divided.
Ayes, 3 Noes, 4
Sir James Paice Jim McGovern
Simon Reevell Graeme Morrice
Mr Alan Reid Pamela Nash
Lindsay Roy
Question accordingly negatived.
Paragraph accordingly agreed to.
Paragraphs 4 to 13 read and agreed to.
Paragraph 14 read.
Motion made, and Question put, That paragraph 14 stand part of the Report.
The Committee divided:
Ayes, 4 Noes, 3
Jim McGovern Sir James Paice
Graeme Morrice Simon Reevell
Pamela Nash Mr Alan Reid
Lindsay Roy
Question and paragraph accordingly agreed to.
Paragraph 15 read.
Amendment proposed, in line 17, at the beginning to insert “In the event that the Government does not immediately accept our view then we believe that the impact of the bedroom tax upon the vulnerable should be ameliorated, in particular”.—(The Chair.)
Proposed Amendment amended, in line 1, by leaving out “In the event that” to “ameliorated” and inserting “We believe that the impact of the bedroom tax should be ameliorated by the proposals in our report”. —(Mr Alan Reid.)
Proposed Amendment, as amended, made.
34 The impact of the Bedroom Tax & other changes to housing benefit in Scotland
Paragraph agreed to.
Paragraphs 16 to 74 read and agreed to.
Summary read.
Amendment proposed, in line 1, to leave out from “repealed” to end of Summary and insert:
amended by the proposals in our report, in particular we believe that a tenant should only be subject to the bedroom tax if they are judged to be under-occupying social housing and decline to move to a smaller property in the same community when provided with a reasonable offer. —(Mr Alan Reid.)
Question put, that the amendment be made.
The Committee divided.
Ayes, 1 Noes, 4
Mr Alan Reid Jim McGovern
Graeme Morrice
Pamela Nash
Lindsay Roy
Question accordingly negatived.
Summary agreed to.
Motion made, and Question put, That the Report, as amended, be the Fourth Report of the Committee to the House.
The Committee divided.
Ayes, 4 Noes, 3
Jim McGovern Sir James Paice
Graeme Morrice Simon Reevell
Pamela Nash Mr Alan Reid
Lindsay Roy
Question accordingly agreed to.
Resolved, That the Report, as amended, be the Fourth Report of the Committee to the House.
Ordered, That the Chair make the Report to the House.
Ordered, That embargoed copies of the Report be made available, in accordance with the provisions of Standing Order No. 134.
Written evidence was ordered to be reported to the House for publishing with the Report.
[Adjourned till Monday 16 December at 10.45 am
The impact of the Bedroom Tax & other changes to housing benefit in Scotland 35
Witnesses
Tuesday 11 June 2013 Page
Dr Mary Taylor, Chief Executive, Scottish Federation of Housing Associations, and David Bookbinder, Head of Policy and Public Affairs, Chartered Institute of Housing in Scotland Ev 1
Tuesday 18 June 2013
Keith Dryburgh, Policy Manager, Citizens Advice Scotland Ev 23
Tuesday 16 July 2013
Dave Moxham, Deputy General Secretary, Scottish Trades Union Congress Ev 37
Tuesday 10 September 2013
Gordon MacRae, Head of Communications and Policy, Shelter Scotland, and Alastair MacGregor, Chief Executive, Argyll Community Housing Association Ev 50
Wednesday 9 October 2013
Councillor Matt Kerr, Executive Member for Health and Social Care, Homelessness and Welfare Reform, Glasgow City Council, Morag Johnston, Assistant Director, Financial Services, Glasgow City Council, and Richard Gass, Manager of Social Work Services, Service Modernisation, Glasgow City Council Ev 76
Friday 18 October 2013
Councillor David Ross, Deputy Leader, Fife Council, Louise Sutherland, Housing Manager, Fife Council, Eileen Rowand, Head of Revenue and Exchequer Services, Fife Council, and Graham Sutherland, Fife Law Centre Ev 95
Norma Philpott, Citizens Advice and Rights Fife, Norah Smith, Kingdwom Housing Association, Pauline Buchan, Cottage Family Centre, and Craig Stirratt, Fife Housing Association Ev 110
Wednesday 30 October 2013
Michael Cameron, Chief Executive, and Kirstie Corbett, Analysis and Research Manager, Scottish Housing Regulator Ev 124
Wednesday 6 November 2013
Cllr Harry McGuigan, Community Well Being Spokesman, and Michael McClements, Policy Manager, Convention of Scottish Local Authorities (COSLA) Ev 137
36 The impact of the Bedroom Tax & other changes to housing benefit in Scotland
List of printed written evidence
1 Chartered Institute of Housing Scotland Ev 153 2 Scottish Federation of Housing Associations Ev 156 3 Capability Scotland Ev 166 4 Robert Steele Ev 168 5 Mr and Mrs Henderson Ev 168 6 Citizens Advice Scotland Ev 169 7 James Kempston Ev 174 8 Minister for Housing and Welfare, The Scottish Government Ev 174 9 Joint submission from CCSPS, CJVSF & HSEU Ev 176 10 Shelter Scotland Ev 178 11 Carers Scotland Ev 181 12 Parkinson’s UK Ev 185 13 Renfrewshire Council Ev 189 14 Western Isles Forum of Tenants and Residents' Associations (WIFTRA) Ev 195 15 Craig Stirrat Housing Services Director on behalf of Fife Housing Association Ev 198 16 Convention of Scottish Local Authorities (COSLA) Ev 205 17 Glasgow City Council Ev 207
The impact of the Bedroom Tax & other changes to housing benefit in Scotland 37
List of Reports from the Committee during the current Parliament
The reference number of the Government’s response to each Report is printed in brackets after the HC printing number.
Session 2010–12 First Report Postal Services in Scotland HC 669 (HC 884) Second Report Video Games Industry in Scotland HC 500 (Cm 8067) Third Report UK Border Agency and Glasgow City Council HC 733 Fourth Report The Scotland Bill HC 775 Fifth Report Student Immigration System in Scotland HC 912 (Cm 8192) Sixth Report The Referendum on Separation for Scotland: HC 1806 Unanswered Questions Seventh Report The Crown Estate in Scotland HC 1117 Eighth Report The Referendum on Separation for Scotland: Do you HC 1942 agree this is a biased question?
Session 2012–13 First Report A Robust Grid for 21st Century Scotland HC 499 Second Report The Referendum on Separation for Scotland: making HC 542 the process legal Third Report The Referendum on Separation for Scotland: a multi- HC 543 option question? Fourth Report The Referendum on Separation for Scotland: HC 676 (HC 861) Terminating Trident—Days or Decades? Fifth Report The Future of HM Coastguard in Scotland HC 583 Sixth Report The Referendum on Separation for Scotland: The HC 863 proposed section 30 Order—Can a player also be the referee? Seventh Report The Referendum on Separation for Scotland: HC 892 Separation shuts shipyards Eighth Report The Referendum on Separation for Scotland: How HC 957 (HC 257) would Separation affect jobs in the Scottish Defence Industry?
Session 2013–14 First Report Remploy Marine Fife HC 454 Second Report The Referendum on Separation for Scotland: The HC 828 Need for Truth Third Report The Referendum on Separation for Scotland: A HC 842 Defence Force for Scotland–A Conspiracy of Optimism?
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Scottish Affairs Committee: Evidence Ev 1
Oral evidence
Taken before the Scottish Affairs Committee on Tuesday 11 June 2013
Members present: Mr Ian Davidson (Chair)
Mike Crockart Pamela Nash Eleanor Laing Mr Alan Reid Graeme Morrice ______
Examination of Witnesses
Witnesses: Dr Mary Taylor, Chief Executive, Scottish Federation of Housing Associations, and David Bookbinder, Head of Policy and Public Affairs, Chartered Institute of Housing in Scotland, gave evidence.
Q1 Chair: Welcome to the first meeting of the Tenants on low incomes are very anxious about the Scottish Affairs Committee’s inquiry into the bedroom situation they are in and are unsettled, feeling that tax and its impact on Scotland. We are hoping to they are not able to live in their own homes. About identify what the effects of the introduction of the 9% of all tenants are affected by these proposals, to bedroom tax and the other changes will be in Scotland the tune of about £14 a week, which works out at and also to clarify the extent to which the Scottish about £750 a year. It is a substantial amount for people Government, local authorities and housing providers on low incomes. In the two complete months since the have a degree of flexibility to mitigate some of the proposals came into effect, we are already seeing an worst effects of the tax. May I start by asking you to impact on arrears, although it is too early to quantify introduce yourselves? that in detail. Dr Taylor: My name is Mary Taylor, chief executive We are doing our best to help tenants and to make of the Scottish Federation of Housing Associations. them aware of what the changes are. The lucky few, David Bookbinder: My name is David Bookbinder. I if I can put it like that, have had help from members am the head of policy and public affairs at the to enable them to downsize and to move into smaller Chartered Institute of Housing in Scotland. accommodation, where it is available, but the scale of the demand for smaller accommodation to avoid being Q2 Chair: I do not know whether at this stage I penalised is greater than our ability to respond. That should declare an interest and say that Dr Taylor used is essentially the difficulty that we have. There is a to be the head of a housing association in my structural mismatch between supply and demand, and constituency of Govan. She must have done badly, there are perverse consequences. If people look for since she got sent to Edinburgh to lead the federation. smaller accommodation in the private rented sector, the chances are that they will get 100% support on Is that right? a higher rent and, potentially, be living in less good Dr Taylor: By a long route, yes. circumstances. That creates a difficulty. In the meantime, because of the label of bedroom tax, we as Q3 Chair: First, could you explain briefly what your rent collectors are seen as the villains of the piece, in two organisations’ view of the bedroom tax is? collecting a tax. All we are trying to do is to collect Dr Taylor: The SFHA represents the majority of the rent; all we were ever trying to do was to make housing associations in Scotland. Those associations sure that tenants were eligible for support for the rent collectively own about 85% of all the houses for rent that they were charged. in Scotland by housing associations or co-operatives, David Bookbinder: I will put the bedroom tax in the so we feel we have a fair degree of authority to speak context of the wider welfare reforms, which we would on this topic. It has been a matter of great interest to say are a mixture of efforts genuinely to reform the our members—and, therefore, to us since the election system to help make work—particularly low-paid of the Government who became the coalition—and work—pay for people, to make that transition, and the emergency Budget. cost-saving measures. CIH puts the bedroom tax We have done a number of briefings to our members. firmly into the latter category, as essentially a cost- When the proposals became clear, we did briefings to saving measure, saving around half a billion pounds Members of Parliament as well. You may remember in the UK—around £50 million in Scotland—on an that at the time we did not welcome the bedroom tax annual basis. proposals—or the social sector size criteria, to give We would say that the inherent unfairness of the them their Sunday name—because we felt that there bedroom tax comes from the retrospection. Of course, were a number of difficulties that would arise in due you do not save the same amount of money if you do course. It is no comfort to us, either as a federation or not make it retrospective, but there is a sense that you as individual associations, to know that those have been placed in a property that you may be under- difficulties are now coming to bear fruit—as occupying for the best of reasons. Most modern anticipated and worse. allocation policies try to give some flexibility for cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:08] Job: 035419 Unit: PG01 Source: /MILES/PKU/INPUT/035419/035419_o001_michelle_130611 - CORRECTED Final.xml
Ev 2 Scottish Affairs Committee: Evidence
11 June 2013 Dr Mary Taylor and David Bookbinder changes that might happen within the household. needs to sleep in a separate room to have peace to Some landlords in harder-to-let areas find that it is sleep at night. Her application for exemption and a part of the deal to give somebody an extra room as a discretionary housing payment has been turned down. quid pro quo for taking a property in an area that is You are right to highlight the issues between principle not all that popular; so that retrospection is inherently and implementation. Our position is that it is wrong unfair. That unfairness is exacerbated by some of the in principle, but there are also implementation particular criteria around, for instance, split parents, difficulties that arise from that. Let me give you some where both have part-week access to their children but more examples, if that would help. There may be only one of them will avoid the bedroom tax, and a instances where you have a boy and a girl who, whole range of situations involving, particularly, technically, should be sharing because they are under disabled households, including severely disabled the age of 10. They start to have to pay the bedroom adults who cannot share a room but are none the less tax at the point when one of them is about to become being penalised. 10. The minute the older child hits the age of 10, For us, one of the intriguing aspects of the way in suddenly they are eligible for another bedroom, but which the DWP has sought to justify the bedroom tax they still have an extra rental burden to pay in the is by saying that it will lead to better use of stock and meantime. All sorts of discrepancies and anomalies help address overcrowding, and generally within the like that are thrown up. social sector lead to a more sensible use of stock. In fact, its own estimates are that at least 85% of tenants Q7 Mrs Laing: But those are matters of affected will not move or will not be able to move, implementation. A child who is nine becoming 10 is hence the savings that it has estimated. While saying perfectly foreseeable. In all reasonableness, the person that it will lead to better use of stock, it is actually making the judgment ought to say, “There is no point hoping that at least 85% cannot or will not move. You in moving this family or making this family move, have to read between the lines and think about how because in three months’ time they will inevitably that is being justified. come into a different category.” I understand your I am sure the Committee will come on to the issue of point about structural mismatch; that is about Scottish Government powers later. We think that, implementation. That is why I was asking about within the powers they have, they are certainly principle. I wonder whether Mr Bookbinder would undertaking a range of mitigation activities, which I like to take that. am sure we can detail later, but those powers can go David Bookbinder: I agree that it is both principle only so far under the devolution settlement. and implementation, but if you implemented it in a fair way, it would not have anything like the impact Q4 Mrs Laing: Could we examine whether this is a that the Government want. We estimate that around problem of principle or a problem of implementation? 60% to 70% of those affected do not have a spare Which do you think it is? room as you or I would understand it. I am happy to Dr Taylor: I think it is a problem of principle. If we assure you that the vast majority of disabled had the stock to move people to, supposing they households who are affected are not exempt and may wanted to move, we would be able to do that, and then or may not be successful in applying for a temporary we would be able to make better use of the stock—if or transitional discretionary housing payment. The having the exact number of bedrooms for the exact vast majority of disabled households will not be number of people in the household at that time is the exempt. best use of stock, although even that is a moot point. However, that is all about implementation; I think it Q8 Mrs Laing: Should the definition of disabled is a problem of principle. What has been done here is household qualifying for an exemption be changed, to change the eligibility criteria for what tenants can then? receive help with. At the moment, they are being David Bookbinder: We would love to see a change. penalised in principle for occupying fewer rooms than Many other bodies in Scotland and, I am sure, across somebody else deems them to need. the UK would like to see a much stronger element of fairness in relation to disabled households. For Q5 Mrs Laing: You talk about what somebody else example—I am sure this echoes Mary’s example— deems them to need. If you have two adults, married there is no exemption in a case where there are two to one another, and a child, how can they possibly severely disabled adults, or even where one adult is need more than two bedrooms? I am talking about severely disabled and would disrupt the other’s night- people who are not disabled and are in normal health. time sleep. There are very few exemptions. The Dr Taylor: One of the adults might have some kind implementation is very tough, even to put it kindly. of medical condition that makes— Mrs Laing: I take your point on that, but I do not quite take your point on the issue of who should be Q6 Mrs Laing: If they did, they would be disabled exempt. If someone is sufficiently disabled to require and would be exempt, or they would get extra benefits a bedroom of their own, that ought to be something in a different way. that comes within the current rules. Dr Taylor: Then you are definitely on to a problem of implementation, because we know of cases through Q9 Chair: May I clarify this? Coming back to the MSP case loads where surgeries have highlighted to principle and the question of implementation, this has me as recently as this week examples such as that of been referred to as ending the spare room subsidy. The a disabled woman with a non-disabled partner, who idea is that it would be a spare room. If somebody is cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:08] Job: 035419 Unit: PG01 Source: /MILES/PKU/INPUT/035419/035419_o001_michelle_130611 - CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 3
11 June 2013 Dr Mary Taylor and David Bookbinder disabled and their partner requires to sleep in a David Bookbinder: The question of retrospection separate room, that is not by any stretch of the comes in again here. In the example you quote, if you imagination a spare room. What I do not quite choose to buy your two-bedroom house or flat, you understand is where the question of that not being choose to buy within your means. The tenants in allowed an exemption comes in terms of being either Scotland and across the UK that we are talking about the principle or the implementation. Are you saying have had no choice in this matter, in the sense that the that there is a problem here of implementation, in that bedroom tax is being imposed retrospectively. That some of the definitions of who is eligible for might have changed their decision had they known at exemption are wrong? the time that this was going to come along. It might Dr Taylor: Yes, I would say that. One of the points I well have changed their decision, because they would wanted to bring out was that, for me, principle is about have assessed the value on benefits of the property design of the system; implementation is about whether they were going to get against the cost and whether the system is working. What we are seeing is rafts of they were able to pay the rent. anomalies that suggest that the design of the system The other distinction that I would make certainly in is inherently flawed. your comparison—which is a comparison others have made with the private rented sector—is that, while the Q10 Chair: I am sorry, but there is then a distinction nature of the private rented sector is changing, none in terms of the design of the system between the idea the less historically and traditionally people have of ending a subsidy for a spare room and the idea of usually gone into the private rented sector for a fairly how you then define those things. I would see that transitional part of their lives, whereas a lot of people element of definition as being almost a question of going into the social rented sector are making a long- interpretation. Rather than have a twofold distinction, term commitment that could, indeed, be lifelong. So I would almost have a threefold distinction. There is there are key differences between the sectors. I come the principle of it, then there is the question of the back to the key point about retrospection and its being design of it and then there is the issue of the imposed before you had that choice to make. implementation. If you are saying to us that, if you accept the general Q12 Graeme Morrice: I want to pick up the point principle of an end to a spare room subsidy, for it to of retrospection that David mentioned. Can I get some be fair there should be a whole number of changes clarity and confirmation that people do not choose the to allow it to be applied and to take account of the size of house that is allocated to them by a local circumstances relating to disabled people, that is authority or housing association? Presumably that is different from the issue of principle that I think Mrs based on the allocation policy of the local authority or Laing is raising. It would be immensely helpful to us housing association. A single person who might at this very early stage if you could drop us a note choose to have a four-bedroom property would not, subsequently, drawing to our attention where there are therefore, be allocated one, because that would be these sorts of difficulties, which I would see to some against the rules. extent as issues of interpretation rather than issues of Basically, I assume that, when an applicant or principle. applicants apply for a house, they will be allocated or Dr Taylor: I am very happy to do that, but I also have offered only a house that meets their circumstances at in front of me a list of the amendments that were that point in time—although, of course, having agreed by the Lords at the stage when the Welfare accepted an offer of housing, circumstances may Reform Bill went through the Lords, which would change. For example, a 55-year-old widow, who over have dealt with some of these things and were the years has lost a husband and whose kids have overturned by the financial privileges arrangements grown up and moved out, may be left with a two or when it came back to the Commons. That is really three-bedroom house that, at the time when it was what we are up against. The amendments dealt with allocated to her, met exactly the circumstances of that disability and a number of other factors. household. Do you not think that it is unfair to apply retrospection in that particular instance of the widow Q11 Mrs Laing: Continuing on the issue of losing out and, perhaps, being forced financially out principle, it is very helpful to know that you have this of that home into a non-existent one or two-bedroom information in a form that the Committee can use. If property? it is a matter of implementation, of course people David Bookbinder: Indeed. To be fair, whereas a ought to be treated fairly. There ought, therefore, to be generation ago there might well have been a precise consideration of how those exemptions are calculated. fit between the size of household and the rooms that Going back to the simple matter of principle—I think you were allocated, more modern ways of allocating you used the word fairness—why should somebody to try to help people stay in a community, which helps who rents in the private sector or pays a mortgage for the stability of the community, might well mean that, a two-bedroom flat for a man and wife and two small for instance, a young couple whose circumstances children aged five and seven, so that there are four may change in the future are allocated a two-bedroom people, because that is all they can afford in the property. That may have happened in recent years, private sector, and they are working and paying tax in partly because associations and local authorities, order to afford that two-bedroom flat, also pay extra which have also come into the house-building picture tax to allow the family across the road, which might in Scotland more recently, have generally moved have two married adults and two children, to occupy away from building one-bed flats because it feels very a four-bedroom house or a four-bedroom flat? old-fashioned, inflexible and rigid. There may well cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:08] Job: 035419 Unit: PG01 Source: /MILES/PKU/INPUT/035419/035419_o001_michelle_130611 - CORRECTED Final.xml
Ev 4 Scottish Affairs Committee: Evidence
11 June 2013 Dr Mary Taylor and David Bookbinder have been an over-allocation in those circumstances even, eventually, three-bedroom accommodation? She to allow for flexibility so that people do not have to sees somebody else without any children or move whenever their circumstances change. dependants—one person—in three-bedroom There is also a big issue about harder-to-let areas, accommodation that she desperately needs, who is not particularly if we are talking about current or ex- only living in it when they do not need it but is getting council housing or Scottish special housing, where help from the taxpayer to pay for it. What do you say there are generally good-sized properties, with good to the woman with the three children? space standards, but sometimes in areas where Dr Taylor: For a start, the woman with the three regeneration is being awaited. There is that sort of children will almost certainly be on a waiting list, and deal. Sometimes you might be allocated a property priority will be given to the fact that she is with an extra room in exchange for accepting an area overcrowding a property. That should get her greater that was not at the top of your list. priority for any house that comes up. There has Dr Taylor: There are further dimensions to this. One always been a problem of households shrinking in a is around high-rise property, which was typically built house—the widow scenario that has been portrayed— in the 1960s, ideally with a long life ahead of it, and and it has always been possible in allocation policies was typically family accommodation, because that is for those people also to get priority to enable them to what was required at the time. Now we do not think get out and move into something smaller. It is also that it is suitable for people with young families or possible for people to take part in mutual exchanges, who are aspiring to have a family to move into those if they find each other in areas that are of mutual kinds of properties, so typically they are occupied by interest, with the right stock type and all of those people without children. We have a member in the kinds of things. I am not sure that punishing Cambuslang area whose stock is predominantly high- somebody in later life, who has been bereaved, for the rise accommodation, occupied by people who do not fact that they have two bedrooms is the right way to need all of the bedrooms, because it is let purposely go about this. It is not a good solution to the problem. to smaller households. That does not mean that it is Actually, it is not particularly a problem in Scottish hard to let or targeted for regeneration—it is about the housing policy. It was not clamouring for attention stock type. in the Scottish housing community among politicians, A similar argument applies in rural areas, where professionals or landlords. associations have traditionally built to enable David Bookbinder: The greatest degree of under- communities to be stable. On the whole, it is better to occupation tends to be among older households, who build larger than smaller. But that means that you may are not affected in the same way by the bedroom tax. be under-letting, in the bedroom tax terminology, to Landlords in Scotland and, I am sure, across the UK households who may grow into that house because are upping their efforts, and have been for many years, they have children, or because elderly parents come to offer incentives—it can only be incentives, of to live there in later life, or because older children course—to older households who may be under- come back because of unemployment, returning from occupying to downsize. It may be help with removal abroad or all sorts of factors like that. The flexibility costs; sometimes it is just straight financial incentives, that that brings to a community is hugely beneficial, because there is a lot of benefit to be gained from but it is not recognised in principle or in design by focusing on that client group to enable councils and any of the issues that are covered in the bedroom tax. housing associations to get their hands on larger Finally, on your point about the fairness between the properties. two categories, one of the issues around unfairness is that there are still people, even now, under the local Q14 Mrs Laing: Of course, it is not a tax, is it? housing allowance, in the private rented sector Dr Taylor: receiving transitional protection. Something like 16% No, it is not a tax. of the cases that went through are still receiving Mrs Laing: Thank you very much for that. transitional protection—and that was from 2008. Here Dr Taylor: We always put it—or try always to put we are in a situation where this has come in like a it—in inverted commas. That is why I said at the guillotine and is being dropped on the Scottish beginning that we are being cast as the villains of the population, in spite of all the arguments about piece for collecting a tax. It is not a tax—it is just structural mismatch, unfairness, exemptions and all of the rent. those things. You can call it a reform, but it is largely perceived as a cut in Scotland—and it is impacting on Q15 Mrs Laing: Is it possible that the withdrawal people who have the least flexibility financially to do of the spare room subsidy, effectively, will encourage anything about it. people voluntarily to move out of properties that are too big, thereby freeing up those properties for people Q13 Mrs Laing: That is a very helpful description. who really need them? Thank you very much for telling us about the specific Dr Taylor: It may do, if there are smaller properties cases that you are seeing. What about the other side available, but in our evidence we have tried to show of the coin—I have seen many of these cases that there is not enough smaller accommodation myself—where you have, let us say, a woman who available. It does not necessarily exist, it does not has three children and she is still living in a one- become available and there is a lot of demand for it. bedroom flat, because that is where she started, she There are people on waiting lists—people who are has not been able to get out of it and she is desperately homeless—who are much more likely to need smaller waiting on the waiting list to get two-bedroom or accommodation, and there are older people potentially cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:08] Job: 035419 Unit: PG01 Source: /MILES/PKU/INPUT/035419/035419_o001_michelle_130611 - CORRECTED Final.xml
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11 June 2013 Dr Mary Taylor and David Bookbinder looking to downsize. That is quite a substantial body is both too late relative to the legislation and too early of people all clustering— relative to the impact that it is having.
Q16 Mrs Laing: Voluntarily. Q21 Pamela Nash: Have people not started to Dr Taylor: Yes, potentially. Certainly older people and prepare for it? I know it just came in in April, but I people who are homeless should all be looking for imagine that people knew it was coming in. this voluntarily. But there is a huge amount of pressure Dr Taylor: Yes. The minute the Bill became an Act in on smaller accommodation. March last year, people started making moves. Until David Bookbinder: They may move into smaller then we did not know, for example, whether the Lords accommodation in the private rented sector, where the amendments would be upheld; the kind of preparation bill to the Exchequer would be much higher, of would have been completely different if they had course, in terms of the level of rent that is covered been. People have been preparing. That is why we by support. now have these examples of the kinds of anomalies that are coming out. Q17 Chair: Can I be clear about that point? If We had a fair idea before 1 April 2013 of who was somebody moved to avoid this—whether it is a spare going to be affected by the bedroom tax, but it has not room subsidy or a bedroom tax—into private rented always been necessary or appropriate for landlords to accommodation where the rent was higher, all of that know who is actually living in their houses. When a rent could potentially be paid by housing benefit, so person applies for a house, you know something about the cost to the public would actually be greater than their household characteristics and circumstances— it would have been had they stayed where they were enough to know whether or not they have priority in under-occupying. your scheme, if you have a needs-based scheme; the majority take at least some account of needs. The David Bookbinder: Especially in Scotland. There are point is that, once those people are in that house, you parts of England where local authority and housing do not actually have a right to know who is living association rents have gone up quite considerably and there—whether they are overcrowding, unless they may be getting towards a mid-market or market rent apply for something larger on the basis of that, or level, but in most areas of Scotland there is a very under-occupying, in which case they may now be distinct difference between the average council and liable for reduced eligibility. There are still cases housing association rent and the local housing coming to light of people not receiving the full allowance level for the private rented sector. I cannot amount that they were expecting to receive, because think of a situation where moving into the private they did not understand the impact of the proposals rented sector would save the Exchequer money. on them. Dr Taylor: I can give you an example from If somebody gives up a tenancy, it is very difficult Haddington earlier this year. We provided figures to necessarily to know where they are going; they may the Secretary of State’s office that showed the just hand in the keys, with no more communication. additional cost of somebody who was under- Establishing in detail quantitatively what impact that occupying by one bedroom moving to the right size is having is quite difficult. We are doing our best in of accommodation in Haddington. It was going to cost the circumstances, as are practitioners in the field. about £2,000 more to us as taxpayers to have that There is a lot of pressure on the sector at the moment person live in a smaller property. because of all these changes.
Q18 Chair: On the face of it, that seems to be Q22 Pamela Nash: Are you aware of anyone who is somewhat bizarre, does it not? collating that information? Dr Taylor: Mad. Dr Taylor: We would be the main body collecting that information from our members, and we do our best to Q19 Chair: Mad, you said. Presumably that is not a collect it. We understand that the regulator for housing problem of principle; is it a problem of design? associations is moving to collect information about the Dr Taylor: I would accept that it is a problem of financial impacts of this on rent collection and arrears. design. I do not think it is a problem of I am happy to say more about that. implementation. Q23 Graeme Morrice: We are getting the clear Q20 Pamela Nash: You have provided an example. impression from both Mary and David that, I have had information from one of my local housing professionally, they have concerns about this bedroom associations about properties that it rents out in tax. Just for the record, can you indicate the categories Edinburgh. It has one-bed properties available for £70, of people who are most directly impacted upon as a whereas a private sector rent in the same place would result of the introduction of the bedroom tax? be £116, which is more than the rent for a two- Dr Taylor: We have mentioned some of them already. bedroom property in the social sector. Could you give There are people who have a disability, whether or not us an idea of the scale of that that you have seen since it is recognised in the current system; some of the implementation of the bedroom tax? Have you seen changes around disability living allowance, PIP and people moving into more expensive yet smaller disability assessments are changing whether people’s accommodation in the private sector? disability is recognised any more. That has an impact, Dr Taylor: It is too early to tell. I commend your to the extent that there is a knock-on impact. There efforts in holding the inquiry, but it is kind of early. It are people whose children have left home relatively cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:08] Job: 035419 Unit: PG01 Source: /MILES/PKU/INPUT/035419/035419_o001_michelle_130611 - CORRECTED Final.xml
Ev 6 Scottish Affairs Committee: Evidence
11 June 2013 Dr Mary Taylor and David Bookbinder recently, people who may be coming out of a be exempt. I do not think that has been applied. The relationship breakdown and people who may not have disability living allowance or personal living custody of children but have visiting rights to children independence payment does not necessarily read or have children coming to stay at weekends; those across. As I understand it—I can confirm this to you are the kinds of things that are happening. It is also a subsequently—only households where there is a challenge for people with children who are coming up disabled child are exempt at the present time, which to the age boundary I talked about earlier. means that adults are not included. One of the amendments that were overturned was for war widows Q24 Graeme Morrice: David, do you want to add or war widowers. I think people who have come back to that? from the forces have been included among the people David Bookbinder: No, I think that is a very good who are exempt from the proposals; that happened summary of the main categories of people affected. fairly late on, in about February this year. Foster care placements are still not covered, as far as I know—I Q25 Graeme Morrice: We are obviously aware of think an adjustment was made for kinship care, but 1 the exemptions to this. During the passage of the Bill, that is not necessarily the same thing—and so on. a number of exemptions were put forward as The other key amendment that was overturned related amendments. I think that was a recognition by the to the distinction between under-occupying, in the coalition Government that there was a lot of concern DWP’s terms, by one bedroom as opposed to two. about this out there; they made some very quick U- That would have made a huge difference. The turns on it, which are clearly to be welcomed. majority of people who are casualties of this are However, I presume you take the view that what has casualties because they are perceived to be under- been proposed so far does not go far enough. I think, occupying by one bedroom. The figures that I have Mary, you mentioned earlier Lords amendments that seen from our latest survey suggest that only about were not ultimately agreed, or are still to be a fifth of all the cases are under-occupying by two considered, and perhaps will not be agreed by the bedrooms. So we are really punishing people at the current Government. Where do you feel the margins, for having one bedroom more than they exemptions have not gone far enough, and what other need, and causing a huge amount of disruption and exemptions do you think should come forward? pain on the back of all of that. Dr Taylor: I do not have an exhaustive knowledge of the detail around some of the exemptions. David may Q27 Graeme Morrice: Clearly, short of abolition of have and may want to come in. the bedroom tax, you would support a whole range of David Bookbinder: I would be happy to kick this one additional exemptions. off. I would not want the Committee to overestimate Dr Taylor: Yes. That lies at the root of why we have what exemptions there have been. If you start from a suggested in our paper that repeal would be the basic rule that no one is exempt, it has been nibbled obvious route. away only at the very edges. Let me give you what I Graeme Morrice: Absolutely. hope is a striking example. There was a Court of Dr Taylor: It is because there are so many anomalies. Appeal case—often referred to as the Gorry case— I do not think there is a raft of exemptions, but there that ruled that two severely disabled children should is a raft of anomalies. Any of you as constituency indeed have separate rooms, but the Government, MPs will find this, no doubt. I would be interested to while agreeing not to appeal that decision, have not know if you have not discovered this to be the case, changed the regulations, so there is not even clarity but people must be at your surgeries all the time on whether two severely disabled children are exempt, saying, “I’m going to be hit by this bedroom tax thing. despite the Court of Appeal case. There are very few Surely this isn’t fair.” I think repeal would be the way other exemptions—and very minor exemptions—that to deal with it, as you could then design a proper would affect less than 1% of the people affected. system. If you were not to do that, you could introduce These relate to foster carers and some very specific classes of exemption or transitional protection, or circumstances relating to service personnel, and suspend it while people are waiting to receive an offer, account for less than 1% of the total number of people or apply it once they have received an offer that would affected. I would not want the Committee to go away alleviate the situation and they have turned it down. thinking there was a raft of exemptions, because that At the moment, they are being punished for not just is not the case. occupying something that does not exist.
Q26 Graeme Morrice: That is interesting, because Q28 Graeme Morrice: I share those concerns and we have all been led to believe that there is a whole entirely agree with you. I am sure some of us would batch of exemptions that cover a range of disabilities also agree that we should seek the repeal of this that people have. You have mentioned the forces and particular legislation. You take the view that this is also people engaged in foster care, but you are saying really a sledgehammer to crack a nut. If there is an that they are very limited indeed and equate to less issue of under-occupation out there, as has been than 1%. suggested, would it not be best to look not at punitive David Bookbinder: In our estimation, yes. financial measures but at financial incentives to Dr Taylor: May I come back in, having reminded encourage people to consider moving voluntarily from myself of the amendments? They included people who a bigger property to a smaller property? I know that have no work-related requirements, so that if they 1 Note by witness: “Foster care was exempted in March, but were not expected to work they would automatically kinship care is still affected.” cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:08] Job: 035419 Unit: PG01 Source: /MILES/PKU/INPUT/035419/035419_o001_michelle_130611 - CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 7
11 June 2013 Dr Mary Taylor and David Bookbinder a number of local authorities and, perhaps, housing David Bookbinder: But they are not anomalies or associations will have removal grants, for example, to accidents—these are deliberate. The Government are encourage primarily single older people in bigger not accidentally hitting the people we are talking houses to move into smaller ones, where those are about; they are deliberately hitting those people so available, so that they do not lose out financially with that they can save the money that they are saving. regard to that removal. These are not accidental cases or circumstances that Dr Taylor: Absolutely. That was happening before have slipped through the net. The Government are and is still happening. If one of the things you are fully aware of who is affected and that has gone into looking for is evidence of the mitigation that a number their calculations of how they are going to save of different people are undertaking, housing money. If you ironed out all those anomalies, they associations are doing that by, for example, offering would probably save about a fifth of what they are incentives to people to move and facilitating voluntary going to save. In a sense, I would not use the term moves between people. “anomalies”; these are central to making the savings that they want to make, particularly in relation to Q29 Graeme Morrice: So you think that, rather than categories such as disabled people or parents with this piece of legislation enacted by the coalition part-week access to children. Government, they should be looking at providing Dr Taylor: May I respond to the point you made additional finances to local authorities and housing before we switched about incentives and helping associations to facilitate this on a voluntary basis. people to move, just so that I do not lose it? I wanted Dr Taylor: That would help. to make the point people were downsizing before these proposals and will continue to do so whether or Q30 Chair: Presumably the argument from the not these proposals stand. In relation to the newer Government would be that, had they not introduced topic that you have introduced, the difficulty that we this legislation, some of the things that are helping have in the sector is that we think that housing policy people to move around would not have occurred, and is devolved. Issues about use of stock, letting it is only the introduction of the legislation that has arrangements, allocations and all of that kind of thing made you do these sorts of things. are devolved to the Scottish Parliament and acted Dr Taylor: No.2 upon by the Scottish Government. So by using its reserved powers, the DWP is interfering in the David Bookbinder: As I mentioned earlier, under- operation of policy on housing in Scotland, occupation initiatives—particularly, initially, among particularly in relation to social housing. I want to older households—have been around for a long time. make that point because, if this is completely under Again I come back to the point that the DWP itself the theme about separation, this is an important one. strongly expects at least 85% of those affected not to be able to move, whatever incentives are being offered and whatever flexibility a landlord is trying to exercise Q32 Chair: We understand that point, but the to help people to downsize. In a sense, you are converse of the idea that the DWP is interfering in applying that kind of best use of stock logic to a devolved powers is that housing authorities, the situation that does not have it. The DWP’s prime Scottish Government, landlords and so on are taking decisions the costs of which they do not bear, because motivation is to save a lot of money, not to get stock the costs are borne by reserved powers, particularly in used differently across the social housing sector in relation to housing benefit; they are making choices the UK. for which somebody else has to pick up the bill. You, David, made the point that somebody may be given a Q31 Chair: I will come on to the question whether, bribe, as it were, of larger accommodation to move if you had to save £50 million—which I think you are into an undesirable area. They are able to do that suggesting is the driver—there is another way in because they are not paying the costs of that additional which you would do it. Obviously we will have to housing benefit. In these circumstances, any time that consider how to produce a Report and what to you have devolved and reserved powers rubbing up recommend. I am interested in the point that you are against each other there is the potential for friction. It making about various anomalies that have already does not necessarily mean that one side is been identified. It would probably be helpful if you automatically right and ought to prevail. could give us a note at some stage, identifying where Dr Taylor: Indeed, but the wider issue is that far and you think a situation has arisen that may have been away the majority of the total growth in Housing caused by faulty design, as distinct from the principle. Benefit spending in Scotland has come from the Presumably, the principle was not intended to penalise private rented sector. More and more tenants are people who are disabled who need another room; that moving into the private rented sector because it is is an issue, presumably, of design. We might want to available, they are having difficulty with mortgages consider, as we did with blacklisting, producing an and there is not the same level of increase in new interim report that touches on a number of issues supply that there used to be. They are moving in with where there are anomalies. A Government that did not public support, through the local housing allowance— want to accept a change to the principle might be and rightly so—but at higher rents. I can give you prepared to accept some changes to the design, and figures. We have a research paper called “Housing hence to the implementation. Benefit Spending: Busting the Myths”, which I am 2 Note by witness: “That would be the Government’s argument happy to pass on to you, that shows how housing and it would not be valid.” benefit spending has grown across Great Britain, and cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:08] Job: 035419 Unit: PG01 Source: /MILES/PKU/INPUT/035419/035419_o001_michelle_130611 - CORRECTED Final.xml
Ev 8 Scottish Affairs Committee: Evidence
11 June 2013 Dr Mary Taylor and David Bookbinder
Scotland’s share of all of that. It is not down to know it. I think that percentage, which sees an empty reckless decision making by people who are not room just sitting there, is relatively small; we are bearing the cost. If that is true at all, it is more true of talking about a small number of cases. private landlords than it is of social landlords in Scotland. Q35 Chair: I am sorry, but if it is a small number of David Bookbinder: I am willing to take your point cases, how can you get to the position that only a fifth that, technically speaking, a Scottish Government to a quarter would be saved if the fairness element could make all kinds of contrived decisions that is overcome? increase the overall bill within the social sector in David Bookbinder: I think that, as a ballpark figure, Scotland. However, average council and housing the unfair cases account for about three quarters of the association rents are so much lower in Scotland than savings that will be made. If you act on all those cases in England that Scotland has a disproportionately low and make the system fair, the DWP will bring about impact on the overall bill. As Mary said, where there only about a quarter of the savings that it expects. has been growth in rents, it has been in the private rented sector anyway. Q36 Chair: Maybe I was not drawing the distinction Dr Taylor: May I give you a figure for rents in our between cases you describe as unfair and cases you sector? At the last count, the average rent for all describe as anomalies. It now turns out that unfair properties—averaged out with all the weighting and ones are about three quarters and anomalies are about so on—is £64.29 a week in Scottish housing 20%. When is an anomaly unfair? associations. I think one of the figures you gave by David Bookbinder: No, I am not using the term way of example was £117 a week in the private rented “anomalies” at all. In the context of the picture we are sector. That is consistent with the research evidence trying to portray here, I am saying that if we ironed that we have, but I will send you the paper so that you out what we call unfairnesses of the system—I think have all the detail. “anomalies” is the wrong term—you would save maybe about a quarter of the amount that is in fact Q33 Pamela Nash: The paper will be useful, but do being saved. you think that the additional cost of putting tenants Chair: That clarifies a lot. into those private properties will wipe out any saving David Bookbinder: I am sorry about that. that the Government make from enacting the bedroom tax? Q37 Mr Reid: Following up on that, can you list Dr Taylor: To go back to the Haddington example that what you regard as the unfair anomalies in the I gave earlier, the figures that we worked out showed system? that a saving to the DWP on four people who were David Bookbinder: These are the sorts of cases we under-occupying by one bedroom was wiped out if a have been talking about where people— fifth person then moved into the private rented sector. David Bookbinder: I would not want us to overplay Q38 Mr Reid: Do you have numbers or percentages the number of people who will in fact move from for each category? Have you done that analysis? public or council and housing association housing to David Bookbinder: No. There are no national figures the private rented sector. It may happen where people for exactly what type of situation is affected. It is feel that that is really their only choice, but you are usually dads who have part-custody of their kids. As talking about giving up a secure tenancy for a much yet, two and a half months in, we do not have a less secure tenancy and, potentially, having a different detailed breakdown of all the categories that are type of management service and a different type of affected. Hopefully, the types of categories that are landlord-tenant relationship. Of course, the DWP does affected will start to be covered in local and national not expect that to happen in too many cases. information gathering, but our sense at the moment is Obviously, where it does, the bill will be greater, but that around 70% to 75% of cases do not have a spare I would not want us to overegg the number of cases room as you or I would understand it. in which that will happen. Q39 Mr Reid: You have not done the analysis, but Q34 Chair: I want to conclude on this point about do you have any judgment on or feel for what would exemptions. Mr Bookbinder, you said to us that you be the most common anomaly? thought all the exemptions for handicapped people David Bookbinder: I think the most common that we and the like would come to only 20% of the amount have talked about today is one or other type of that was being saved. I had gained the impression— disabled household. Earlier Mary gave a fairly obviously erroneously—that a much higher comprehensive list that included households where percentage of those who were affected were children have just left the home, for instance. handicapped or had a handicapped person in the house. Q40 Mr Reid: Is there a time lag after children leave David Bookbinder: What I was saying was that, if the the home for the household to adjust? UK Government acted on all the so-called anomalies Dr Taylor: Could I give you an example? Students that we are talking about and made the so-called who go away to university may want and expect to go bedroom tax a fairer system, we would probably save away for ever, but how many graduates will actually no more than a fifth to a quarter of the money that is get a job on leaving university? The room needs to be being saved. It relates to this figure of how many held for them to come back to, so that they can remain people truly have a spare room as you or I would part of the family. Does that mean that the parents cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:08] Job: 035419 Unit: PG01 Source: /MILES/PKU/INPUT/035419/035419_o001_michelle_130611 - CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 9
11 June 2013 Dr Mary Taylor and David Bookbinder have to pay a penalty or move to a smaller property Q44 Mr Reid: That is the number of those who are in the meantime so that they do not have to pay the under-occupying. penalty? That is an anomaly. Dr Taylor: I think it is the number of those of working age who are under-occupying. Q41 Mr Reid: Is this where the child has gone away to university for the term time? Q45 Mr Reid: You do not have a figure for the Dr Taylor: Yes, for the three-year period of study. number of those who are actually on housing benefit. They may regard their home as being in the university Dr Taylor: It may exist. If it exists, I will get it for town to which they have chosen to go, but they still you. have an expectation of coming back to the parental David Bookbinder: As I understand it, that is the home. figure for working households in Scotland who are Chair: Regrettably, that is true. affected by the charge. Dr Taylor: Yes, I am sure we have all suffered. It is lovely when they arrive, isn’t it? I hope my children Q46 Mr Reid: There are 95,000 under-occupying aren’t watching. who are on housing benefit. Dr Taylor: I think it is safest to assume that. If it is Q42 Mr Reid: Is that a very common anomaly? different, I will let you know. Dr Taylor: There are no detailed figures on this. I am just looking at the housing benefit impact assessment Q47 Mr Reid: When we question the Government that came out from the Scottish Government, through about the various anomalies, they say that the answer the stakeholder advisory group that the Scottish is discretionary housing payments. They say that it is Government set up, on which we are represented. The difficult to legislate for every possible type of estimates that I have, which are about six months old, anomaly, so, as the Government believe in devolving show that about 95,400 households of working age power, they have given local authorities on the ground under-occupy in the social rented sector in Scotland. the power to make the judgment. Why are Using proxies from the likes of the Scottish house discretionary housing payments not ironing out these condition survey, we find that only 5% of all tenants anomalies? in social housing—about 26,000 households—are Dr Taylor: We undertook some research on that overcrowded. That will give you an idea of the recently. Again, I can send you copies of that; it came imbalance between the two issues. out after we had submitted our evidence. What it Our own estimates, through some research that we shows is a vast increase that we are picking up; local commissioned last year, suggest that there are about authority housing departments, rather than benefit 38,000 households of working age in housing departments, are experiencing the same kind of thing. association tenancies who are under-occupying, but In recent months there has been an up to fivefold we still do not have clear confidence in the robustness increase in applications for discretionary housing of that figure. I think of it as being about 40,000 for payments. At the end of the day, if the saving to the our sector alone. Then you start to go through it to DWP is of the order of £50 million, the value of the identify how many are disabled, how many are discretionary housing payment fund is only £100 affected by children going away, how many might million; I am sorry, it is only £10 million—would that have children on the boundary between one age it were £100 million—so it is a fifth of the amount category and another, and how many have visiting that is notionally being saved. So there will be rights for children. There are all sorts of things going competition. on that are not covered by the design arrangements I would say that there will be more losers than within this mechanism but they might still have an winners. We are seeing a spike in applications. Some impact on their arrears, for example. are being processed and declined, for no obvious David Bookbinder: It is worth bearing in mind that, reason, when other comparable cases where people even for those households who ostensibly do not fit have applied have been accepted. The first example I into any of these categories and, by all accounts, have gave you was of two adults, one of whom was a spare room—if you have to call it that—we are still disabled, who needed separate rooms. They applied stuck with the issue of retrospection. They did not for a discretionary housing payment and were turned choose to go into this knowing that this charge was down, even though the woman in the household is coming. Even those with a spare room, if you like, disabled. had no choice in this matter. They may have made a David Bookbinder: To complement Mary’s different choice had they known what was coming. comparison of the £10 million DHP total in Scotland with the £50 million impact of the under-occupation Q43 Mr Reid: You say that 95,000 are under- charge— occupying. Is that the total number of under- occupying tenants or the number of under-occupying Q48 Mr Reid: I am sorry, but can I make sure that I tenants who are on housing benefit? have the figures? The discretionary housing payment David Bookbinder: It is the number affected by the fund is £10 million. charge. David Bookbinder: Yes. Dr Taylor: The strict text of this is that it is under the heading “Estimating the impact of housing benefit Q49 Mr Reid: And you say that £50 million is the— changes”, and 95,000 is the figure for those who are David Bookbinder: That is just the under-occupation under-occupying. It does not make the direct link. charge impact. There are lots of other impacts on cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:08] Job: 035419 Unit: PG01 Source: /MILES/PKU/INPUT/035419/035419_o001_michelle_130611 - CORRECTED Final.xml
Ev 10 Scottish Affairs Committee: Evidence
11 June 2013 Dr Mary Taylor and David Bookbinder individuals in the private rented sector, for instance, David Bookbinder: Yes, it does have those powers. who have lost terrific amounts of benefit. For instance, As I understand it, if it is given £1, it can increase people under 35 in the private rented sector can now that to £2.50—by 150%, I think. get only the equivalent of a room in a house, rather than a one-bed flat. There are lots of other categories. Q55 Chair: That is the maximum. So this £10 That £10 million is for everything and everyone. It is million could go up to £25 million, if all the local really quite cynical of Ministers to keep harping on authorities wanted that. about how DHPs are the answer to all of this, because David Bookbinder: Yes, that applies to any local they will be an answer in a tenth of cases, if you are authority in the UK. Obviously it is a UK power. lucky. Q56 Chair: That £10 million is the Scottish figure. Q50 Mr Reid: That is the fund that the Government Local authorities could put it up to £25 million, if they have given to local authorities. Local authorities also chose to do so. have discretion to spend more money on discretionary David Bookbinder: Yes. housing payments. Are there councils that are Dr Taylor: But we would still have a £50 million— spending more than the money they have been given? Chair: I understand that. Dr Taylor: My understanding is that COSLA is doing a survey at the moment and is picking up that some Q57 Mr Reid: Yes, but one of the aims of our inquiry authorities are contributing to that, but all local is to find out whether there are things that the Scottish authorities are facing cuts across the board. The Government or local authorities could do to mitigate question is, if they are going to make a contribution the impact of the bedroom tax. I think this is one. to that, what else are they not spending it on? As you say, there would be consequences for other spending programmes, but it is still a local decision. Q51 Mr Reid: The same could be said of the UK However, at the moment there is nothing in the public Government, the Scottish Government and local domain that indicates how many councils are councils—priorities have to be made. Do you think contributing or how much is being put in in addition that local authorities should be making extra to the grant from the DWP. Do you know whether discretionary housing payments a priority in their COSLA is planning to do a report on that? spending decisions? Dr Taylor: I am sure it will make the results available Dr Taylor: I have no comment to make on that. I in due course. The survey is at an early stage, I think. would need to look further into the details of what difference it might make. I would have thought, on Q58 Mr Reid: If some of the tenants who are being the face of it, that the amount that they would have to affected by the bedroom tax do not pay the rent, that contribute to make a material difference was beyond will clearly have implications for housing their ability. associations. What policies have housing associations adopted for what they will do in such situations? Q52 Mr Reid: But they do have a choice about Dr Taylor: Sadly, arrears are not a new phenomenon, whether to spend the money they have on and associations will have policies to make sure that discretionary housing payments or on other services. they intervene early when an arrear arises and to That is a choice that they have. provide as much support, advice and information to Dr Taylor: Indeed. the tenant who is affected by arrears and as much flexibility as possible to make new arrangements so Q53 Mr Reid: But you do not feel able to comment that the arrear does not build up and increase, can be on whether you think they should be spending more spread over a number of months and can be paid off on discretionary housing payments. in a manageable way. Some tenants do not engage. Dr Taylor: It would be welcome if they were to do Then the landlord, whether they are a housing that; I am happy to go that far. I am clear that some association or a local authority, has to decide how they are contributing, but not all are. I can quite understand will manage the situation and what steps they will take why, in the current financial environment, some would towards legal action for repossession of the tenancy, not be able to do that. if the tenant continually ignores any entreaties by the David Bookbinder: I do not think local authorities in landlord or attempts to engage. Scotland will see their role as being to spend local The worst sanction—the worst outcome of that council taxpayers’ money to make good damage done situation—is action to take repossession of the by the UK Government. That is a very difficult property or to evict. That has been a very delicate and position to put them in, although technically they have controversial issue in Scotland recently, and a number a choice. of local authorities have decided to take a no evictions position, though in fact, when you look at the detail Q54 Chair: But they are in that position; I of that, it often allows those actions to continue if the understand that. Can I clarify a point about the powers tenant is not engaging at all with the landlord’s of local government in this regard? It has the powers attempts to communicate. In effect, that is what all to add to the discretionary housing payment budget. I housing associations, to my knowledge, are saying. I am sorry—Hansard does not record nodding, I am do not think there is any housing association that will afraid. take a no evictions headline position because— cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:08] Job: 035419 Unit: PG01 Source: /MILES/PKU/INPUT/035419/035419_o001_michelle_130611 - CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 11
11 June 2013 Dr Mary Taylor and David Bookbinder
Q59 Mr Reid: I am sorry to interrupt, but I thought Scotland, Nationwide, Lloyds and Barclays. Have I you said that some local authorities had taken a no missed anybody? Those are the main ones. evictions position. Dr Taylor: Some local authorities have taken a no Q65 Mr Reid: So it would be private institutions. evictions position, and the Minister has encouraged all Dr Taylor: I should also have mentioned the Bank social landlords to take a no evictions position, but I of Scotland. am not aware of any housing association that has taken such a position, out of concern that it might Q66 Mr Reid: We seem to have a situation where send the wrong signals. Scottish Ministers have advised housing associations to take a certain course of action—that is, not to Q60 Mr Reid: If the Scottish Ministers have evict—but housing associations are saying that is not indicated that that is what they want housing practical. Are you saying that they have been advised associations to do, why are housing associations not by Scottish Ministers to do something that is following that advice? impractical? Dr Taylor: Housing associations are independent Dr Taylor: I am saying that the Minister has social businesses. They exist by virtue of the rent that encouraged all social landlords to take a position on they collect. They use that rental income to pay the evictions, which is a commitment not to evict tenants. banks they borrowed the money from to enable them I am not suggesting that housing associations want to either to buy or to build the houses, to repair and evict, intend to evict or will increase evictions. What renew the stock, and to pay staff to manage the they are saying is that they will not take an anti- properties—to organise all the lettings, all the repairs evictions position. Not all local authorities have taken and all that kind of thing. that position either. There are 26 local authority landlords in Scotland; I think that at the last count Q61 Mr Reid: How is that any different from local only nine had taken that position. David has authorities? something to add. Dr Taylor: In my opinion, it is no different from local authorities as businesses, but local authority housing Q67 Mr Reid: I will bring you in in a minute, Mr departments sit within broader local authority Bookbinder. Scottish Ministers have given advice to structures. I am not commenting on local authorities housing associations, but, as you have said, if they in this respect. followed that advice it would put them into financial problems with the lenders. Have Scottish Ministers Q62 Mr Reid: It may have changed, but when I was indicated that, if that happened to a housing a councillor you could not use the non-housing association, they would give it any financial support account to subsidise the housing account. Is that still to bail it out? the case? Dr Taylor: No such commitment has been made, but Dr Taylor: You are correct; that is technically correct. I can report that the Minister gave a speech to our annual conference last week in which she made it very Q63 Mr Reid: So effectively the housing department clear that she thought that non-payment of any kind is in exactly the same position as a housing of arrear was not the answer. That is reassuring to us, association. because there are elements in Scottish politics at Dr Taylor: Yes, but I will comment only on housing present who are not, I think, encouraging arrears but associations here. Arrears are already increasing. I would like to see a position where no evictions were will give you an example from an association that has possible for any rent arrears at all, which is not a recently been dealing with the direct payment tenable position. demonstration project. I can quote from it as having arrears of £94,000, which is coming up for 6%. That Q68 Mr Reid: Are you getting contradictory advice is higher than it used to be, since it started taking part from different Ministers, then? in the direct payment demonstration project. Those Dr Taylor: No. were the figures in March this year. In April this year, the bedroom tax came in. Since then, its arrears have Q69 Mr Reid: I thought you said earlier that a jumped by £30,000. If that continued over time, it Minister, whom you did not name, had encouraged would very quickly get to a point where it started to housing associations not to proceed to eviction, but run into cash-flow difficulties. I am not commenting then you said that the Housing Minister had said on local authorities; all I am saying is that any housing something different. association that lets that situation run will find itself Dr Taylor: It is the same Minister, and it is Margaret in difficulty with the lender who lent the money to it Burgess, the Minister for Housing and Welfare in the in the first place. It will not be able to continue to Scottish Government. I make the point again that it is employ its staff and will not be able to continue to not advice, as I understand it, although I will check repair and maintain the property that it has, which is the exact wording of the letter. My understanding is its reason for existence. that she has encouraged landlords to take a position that is not about eviction, but she was clear at our Q64 Mr Reid: Who do the lenders to housing conference in saying that non-payment was not the associations tend to be? answer. Dr Taylor: They would be the usual sorts of lenders, including high street banks—the Royal Bank of Q70 Mr Reid: That seems contradictory to me. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:08] Job: 035419 Unit: PG01 Source: /MILES/PKU/INPUT/035419/035419_o001_michelle_130611 - CORRECTED Final.xml
Ev 12 Scottish Affairs Committee: Evidence
11 June 2013 Dr Mary Taylor and David Bookbinder
David Bookbinder: As Mary has said, in the Q75 Mr Reid: In general, is a high priority given in Minister’s letter a few weeks ago she commended the these waiting list systems to people who want to policy initiated by Dundee city council of having a downsize? no evictions approach. When it was clarified—again, Dr Taylor: As I said when Mrs Laing was asking Mary said this a few minutes ago—the no evictions questions earlier, that would have been a feature of policy from Dundee said, “We won’t evict where a the arrangements before 1 April this year. In a points- tenant is engaging with us, communicating with us based system, points would have been given to people and making every effort to find a way of paying the who were looking to downsize, to give them enough rent.” That is not strictly a no evictions policy; it is to be able to release another property to somebody no evictions in those circumstances. From my long else. I am not sure whether it is enough to allow them experience, if I may say so, of what is happening to compete with someone who is homeless, for across councils and housing associations, I think there example. In Scotland, the arrangements for dealing is very little distinction in practice between the arrears with homelessness are quite different and are regarded policies of councils and housing associations over the across Europe as radical and progressive. In our years. For a long time, most councils and housing system, if someone who is homeless is nominated or, associations have had the approach that the last people rather, referred under a section 5 referral, the they evict are people who are talking and engaging association has no alternative, bar one or two side with them. I do not see any change there. In fact, I do issues, but to accept them—it has to give them a let. not see a great difference in practice in the approaches That may take precedence over a request—which, that councils and housing associations are taking. legally, is all it is at the end of the day—from someone who is faced with under-occupation penalties. Q71 Graeme Morrice: That is a very interesting point. Personally, I would concur with what you have Q76 Mr Reid: The anomaly I can see here is that if just said, David. If a local authority took a strictly no you have a one-bedroom property that is vacant, you evictions policy, would it not be acting in a manner have a homeless family who are desperate for a that was ultra vires? property and you have a single person occupying a David Bookbinder: It might well be. Obviously it is two-bedroom property who wants to downsize, rather a legal obligation to pay rent. I am not aware of any than give the homeless family the first house that local authority that has said, “There are no comes up—i.e. the one-bedroom property—it seems circumstances whatsoever in which we would say we more sensible to allow the person who is under- would never evict.” occupying to downsize and to give the homeless family the house that has just been given up. Does the Q72 Mr Reid: Another area I want to pursue is the system allow that to happen? initiatives to find smaller properties for people who Dr Taylor: In the example that you have given, if it are affected. Can you tell us how successful those is a family who are homeless, I would have thought initiatives have been so far? that that was what would conventionally be called a Dr Taylor: I am thinking back to a conversation I had no-brainer— a couple of days ago with an organisation that at the start of this had 450 tenants in the Edinburgh area Q77 Mr Reid: Yes, but do the bureaucratic points affected by under-occupation restrictions. In the last systems allow these no-brainers to happen? six to nine months, it has managed to get that number Dr Taylor: Indeed they do, but they will vary. down to 410. Those people are affected by changes in David Bookbinder: As Mary said, our homelessness their eligibility for rent of anything between £10 and legislation has changed radically. The greatest change £30 a week. That will vary according to size, location has been in the rights that single people now have. In and so on. fact, the example that you quote would be relatively uncommon compared with the huge demand from Q73 Mr Reid: When a one-bedroom property single homeless people. If 78,000 households in becomes available for rent, will housing associations Scotland affected by the under-occupation charge give priority to somebody in a larger property who need a one-bed property but only 20,000 such wants to downsize? properties a year, on average, become available, the Dr Taylor: That may vary according to where they call on those one-bed properties—particularly, as are. In the Edinburgh area, there is a Key to Choice Mary said, from homeless households and, indeed, system that allows people to bid for properties when single homeless households—is intense, and it is a they come up. I am not aware that there are any legal obligation. proposals in Edinburgh, for example, to change that Dr Taylor: I think I am right in saying, from memory, system. that about 80% of all the homeless cases are looking for one-bedroom accommodation. Among older Q74 Mr Reid: How does the system work? people wanting to downsize, people who are on the Dr Taylor: The system operates by giving people waiting list, people who are homeless and people of passports that grade their needs. When a property working age who have to downsize because of these becomes vacant, they bid for it. It is called a choice- proposals, there is a lot of demand on smaller based letting system, but the name of the system in properties. Edinburgh is Key to Choice. In other areas, where there are more conventional waiting lists, people may Q78 Mr Reid: So is the problem the mismatch of the rise to the top of a waiting list. housing stock? cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:08] Job: 035419 Unit: PG01 Source: /MILES/PKU/INPUT/035419/035419_o001_michelle_130611 - CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 13
11 June 2013 Dr Mary Taylor and David Bookbinder
Dr Taylor: That takes us back to where I started, yes. Q84 Chair: Of the 23,000, say, that come up through churn, how many would end up being filled by people Q79 Mr Reid: Obviously we have known for about exercising a legal obligation or a legal right? three years that the bedroom tax was coming. Has David Bookbinder: I do not have the exact figures on there been any change in policy, where new build is homelessness lets in Scotland in front of me. I think happening, to concentrate on building one-bedroom the rate across councils and housing associations at properties? the moment—I am afraid this is very much a ballpark Dr Taylor: There is less capital investment by figure—is that roughly 50% or 55% of social housing Governments both north and south of the border. The lets are to people coming out of the homelessness rate at which supply is subsidised north of the border route, but I will have to get back to the Committee has changed quite dramatically—and not for the with exact figures. better. Traditionally, whether it is local authorities or housing associations that are building, they are Q85 Chair: If we take 50%, for the sake of encouraged to work on a three-person, three- argument, and say that there are roughly 24,000 single apartment formula. apartments, we are talking about 12,000 being available for people to downsize. I have now forgotten Q80 Mr Reid: Can you explain what that is? the number of people who want to downsize. Dr Taylor: Technically it is a house with one double However, given the scale of the issue, if nothing else bedroom and one single bedroom. You have variation happened, on that basis it would take between five and eight years for the situation to be overcome. Is around that norm, in effect. That means that, if you that right? are trying to build what we would talk about as a David Bookbinder: Yes. As Mary said, the pressure balanced community, you would not build all three- is such that, traditionally, that notion of somebody person, three-apartment properties. You would build putting in a transfer request has not been the highest some one-bedroom properties and some two, three of priorities against the needs of newly-forming and four-bedroom properties to accommodate the households on the waiting list looking for a house. range of needs that there are likely to be in the area. There are so many different demands. While I am sure things are starting to change where they can, in terms Q81 Mr Reid: But if the overall need is for one- of giving a greater degree of priority to working-age bedroom properties—which, I assume, are cheaper to households affected by the under-occupation charge, build than two or three-bedroom properties—why it is homelessness and a whole lot of other calls from aren’t you concentrating on building one-bedroom the waiting list on those properties. properties? Dr Taylor: They are not necessarily cheaper to build. Q86 Chair: But, presumably, from your point of The key point is that they are not necessarily better view, if you, as managers of housing, have people in value for money. It is more economic to build larger; your accommodation who are engaging with you but that is why the norm exists. The other factor is that it are not able to pay, I would have thought that that would not be desirable socially for there to be would give them a degree of priority from your concentrations of single-bedroom properties. I can perspective, and that you would want to move them think of examples in Glasgow of estates built in the into single-apartment houses or to downsize them late 1920s, under the slum clearance programme, that ahead of people who would otherwise have priority have been demolished relatively recently because, in ahead of them, because then you would free up a attracting only single-person households, they were house. To some extent, it comes back to Mrs Laing’s creating ghettoes, in effect, that were not desirable for point about overcrowding and the like. I would have overall social balance. thought that the Government’s policy would have some effect in ironing out this under-occupation/over- Q82 Mr Reid: So how do we solve the problem? occupation argument. Dr Taylor: By repealing the bedroom tax I think is David Bookbinder: Yes. You might, for example, the answer. prioritise working-age under-occupiers for transfer against the traditional group that you have supported Q83 Chair: But that does not repeal all problems, of older tenants who want to downsize. I imagine that does it? You still have this queue of people seeking there have been—and are as we speak—changes accommodation. I understand the figures, but there is going on to give as great a degree of priority to one thing that I did not quite pick up. You said that working-age under-occupiers, within the limits. competition for one-bedroom houses was intense, but I am not quite sure what the quantity is that means Q87 Chair: Do you want to come in on that? intense. If 20,000-odd single-bedroom houses are Dr Taylor: Yes, except that, if that leaves older people coming up a year, how many applicants are there for in housing that is too big for their needs or with those? Are we talking 40,000, 10,000 or 70,000? staircases, outdated central heating installations or David Bookbinder: There are in excess of 300,000 whatever, and they are unable to afford to heat the households on council and housing association lists in house, potentially that has knock-on consequences in Scotland. I do not have an age breakdown right now, terms of hypothermia and social isolation—I could go but the distinction that we were very keen to make on. I said earlier that repealing the bedroom tax was concerned the legal obligation that councils and the solution—I appreciate that that was not well housing associations have. received in all quarters—but it is not the only solution. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:08] Job: 035419 Unit: PG01 Source: /MILES/PKU/INPUT/035419/035419_o001_michelle_130611 - CORRECTED Final.xml
Ev 14 Scottish Affairs Committee: Evidence
11 June 2013 Dr Mary Taylor and David Bookbinder
The other part of the solution that we are pressing the properties available, at the last count. One local Scottish Government on is very clearly to increase the housing association told me that it had 160 people amount of capital investment that is available for new affected but only one one-bedroom property, on housing and to increase the rate at which that is average, coming up a month. By my calculations, it available, because if we were able to do something to would take it 13 years to rehouse all of those tenants. provide more housing for older people, with specialist Those figures for my local area seem horrific to me. I facilities that recognise what happens to people in know you said that you did not have the exact figures later life, it would help to ease that as a source of at the moment, but is that your perception of the pressure. The particular policy that is the focus of situation, roughly, across Scotland? Do you think that your attention here today is increasing and amplifying the housing stock makes Scotland particularly the pressure on something that was already in short unsuitable for this policy? supply and is under pressure from a number of Dr Taylor: I have figures in front of me for the different categories other than those that are now numbers who are under-occupying in the bureaucratically deemed to be under-occupying. constituencies of members of the Scottish Affairs Committee. The figures I have are slightly lower than Q88 Mr Reid: I have one quick follow-up, which the ones that you have. I do not have letting figures. goes back to a question that I asked earlier. I want to explore whether the homelessness legislation gets in Q91 Pamela Nash: To clarify, the first figure I used the way here. I am thinking of a scenario where you was for North Lanarkshire as a whole, of which my have, say, a young couple who are homeless, both of constituency is a quarter. whom have jobs. Their aspiration would be to have a Dr Taylor: The figures that you are quoting do not two-bedroom house, because they are hoping to start feel particularly outlandish. The lack of smaller stock, a family. You also have a single person of working age the fairly average turnover and the amount of in a two-bedroom property who wants to downsize. If competition for that stock do produce those kinds of a one-bedroom property comes up, would the numbers. I do not think that is unique or exceptional. homelessness legislation force you to offer the one- bedroom house to the homeless couple, or would you Q92 Pamela Nash: Do you think that that makes have the flexibility to say, “No, we can solve two Scotland particularly unsuitable for the bedroom tax? housing issues here by downsizing the other person My impression is that Scotland has always built and offering the two-bedroom house to the homeless homes for life and not temporary properties. couple”? Dr Taylor: Absolutely. There are people in the central Dr Taylor: The detail of the arrangements varies belt who would argue that it is unsuitable enough, for between local authority areas. My understanding of all the reasons with which people in Blackburn, this from research done in a previous life is that the Norwich and wherever would agree, but in rural areas professionals letting the property would exercise a people would be particularly keen to make the point degree of discretion about how to manage those that the one-bedroom house that might appear for the lettings. person who needs it in Dingwall, is actually in Fort William. The distance exacerbates that problem Q89 Mr Reid: So the discretion is there in the massively. The example that we used at the time when legislation. the Bill was going through the Houses of Parliament Dr Taylor: Yes. The majority of associations that I can was of somebody in precisely that situation, who think of will have an arrangement where they except a ended up moving to Inverness in order to be able to proportion of the stock that they are aiming to let in get access to a property at all, because they were not order to target it towards section 5 referrals, but they prepared to pay the under-occupation penalty and will not have particular lets that they are aiming to needed somewhere to live. They ended up on a Local satisfy in that way. The profile of stock will also vary Housing Allowance in a higher-rented property in from this association to that association, so they have Inverness than they were in Dingwall, which is to do what they can. They have to have effective perverse. If that is not an anomaly, I do not know working relationships around all of this with local what is. authorities. So I think the answer is that it will vary David Bookbinder: To add to what Mary has said, if from place to place. you were trying to do a Scotland-England comparison, The only other point is that it may be fair to assume I am not sure that you would find huge differences in 50% across the board, but I am pretty sure that the stock profile between, for instance, an urban part of last figures that were published showed that 27% of North Lanarkshire and an urban part of the north of all the lets that were made by housing associations England. However, the rural factor to which Mary has were to section 5 referrals. There may be more who alluded and, indeed, the extra responsibilities for were nominations or were on the housing homelessness mean that there are particular limits on associations’ waiting lists or whatever; we do not have Scotland’s ability to mitigate the effects of the charge, decent figures to rely on. compared with England.
Q90 Pamela Nash: You have already touched on Q93 Chair: Am I right in thinking that there has been housing stock in a number of other answers, but I serious under-building in Scotland for some time and want to highlight the figures for my local area. North that, had more houses been built right from the very Lanarkshire as a local authority has over 5,000 people beginning of the Scottish Parliament, we would not affected by the bedroom tax and 26 one-bedroom have this huge build-up of people seeking cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:08] Job: 035419 Unit: PG01 Source: /MILES/PKU/INPUT/035419/035419_o001_michelle_130611 - CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 15
11 June 2013 Dr Mary Taylor and David Bookbinder accommodation through the socially rented landlords Dr Taylor: No, it is not. In rural communities you do sector? not usually need schemes or estates of 200 houses at David Bookbinder: All the housing bodies, including a time to be built. What you might need is four, and SFHA and CIH—there are plenty of other bodies, the costs of doing that are very high. You need to have some of which you will speak to soon—would have a regime that recognises the time it takes to plan for liked to see a greater rate of house building since the that and the amount of money that it will take, and to Scottish Parliament came into being. However, I am make sure that what you build has the flexibility that not sure how many of those extra houses, had they will future-proof the use of that stock going forward. been constructed, would have been one-bedroom I am thinking of examples that I have heard all across properties. There was a Member’s question earlier rural Scotland recently. People have said that they about building more one-bedroom houses. We are have been building three and four-bedroom properties, aware of a small minority of councils and housing which give people the option of an expanding associations that are now looking at that prospect, but household, the opportunity for a study or office, and they are doing so with considerable reluctance and the opportunity to create workshops and economic feel that it is a retrograde step. I am not sure how development opportunities at home, and thereby to many one-bedroom properties, aside from sheltered or underpin and stabilise a community. Those people other specialist provision, would have been built had may be a couple living in a house that the children we had a greater house-building programme in the last have moved away from, who are hit by the under- 10 or so years. occupation penalty.
Q94 Chair: Is it fair to say that it would have dealt Q97 Chair: But, almost by definition, many of those with the huge volume of arrears—of competition for categories, which are about being progressive and accommodation—but not necessarily the one- adding to the economy, would not also be on housing bedroom category specifically? benefit, of course. David Bookbinder: It would certainly have helped to Dr Taylor: We cannot tell that at the moment. There address housing need, as opposed to arrears, yes. are the arguments in principle, when you are doing the strategic planning for a development, which have Q95 Chair: Can I clarify the point that you have to take account of all of the factors that I have made on a number of occasions about the impact of mentioned, and then there is the issue of who lives in rurality upon housing? Why is that? Have social that house now. That is the bit that intersects with the landlords not been building there? You have referred under-occupation restrictions. on several occasions to the particular accommodation difficulties faced by people in rural areas. Is that a Q98 Pamela Nash: That is what I wanted to ask. Are Scottish issue? Is it just a rural issue? Is it an issue of getting access to land to build on? Is there something you now seeing evidence of housing associations and we ought to be aware of? local authorities taking into consideration the bedroom Dr Taylor: I do not know to what extent the rural tax in their building plans for the future? Earlier you lobby in England would agree with this, but I can mentioned that it would be helpful if the Scottish certainly say that the rural movement in Scotland Government were investing more in housing at this would make the argument that some of the rural point. Is there any evidence of that in the current depopulation of Scotland is down to lack of spending plans? Do you think that it will change the affordability of housing. Some of that is down to building plans for housing associations and local tourism and second home ownership; I am sure you authorities? How, in particular, could Scottish would recognise that that would be particularly true Government funding help that in the face of the in Argyll and Bute. The other side of it is that there bedroom tax? are fewer economic opportunities, or there may just Dr Taylor: The cut in the rate of subsidy for be less housing. development, which went from £70,000 a unit to Rural housing associations were established 20 to 25 £40,000 a unit just as the Welfare Reform White Paper years ago to try to combat that problem and to provide was coming out, meant that associations that wanted a variety of different rural housing services in the to continue to develop would have to borrow a greater remote and rural parts, which are not necessarily that proportion of the money that they wanted to spend on remote. We could be talking about Abington on the developing any particular house on any scale. With M74, where houses have been built to meet the needs the lending regime being what it was at the time, it of people living in those communities, to contribute meant that associations had to borrow larger amounts to economic development and to combat the of money—a larger proportion of the development— underinvestment in rural areas. So a number of things so there was a higher risk, if you like, as far as the are going on there. banks were concerned, which contributed to pricing that risk. Overall, there was less subsidy, with higher Q96 Chair: Following on from the inquiry that we amounts of money to be borrowed and at higher cost, did into the Crown Estate, we have been asked and, I at the very same time that it was becoming more think, have agreed in principle to look at some of the difficult for tenants to afford the rent, whether they issues relating to inequality in land ownership in are in work, on benefit or whatever. There are Scotland. I was not clear about whether you would constraints right across the economy for rental say that that was one of the issues. I do not think that affordability. This is just one of the factors that make you have touched on that. it more difficult. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:08] Job: 035419 Unit: PG01 Source: /MILES/PKU/INPUT/035419/035419_o001_michelle_130611 - CORRECTED Final.xml
Ev 16 Scottish Affairs Committee: Evidence
11 June 2013 Dr Mary Taylor and David Bookbinder
The consequence of the present arrangements for David Bookbinder: It is a Westminster power. As I capital investment in new supply by housing understand it, all local authorities in the UK can associations is almost certainly to produce higher exercise that power. rents. That means that people are inhibited or discouraged from taking on a higher rent if they think Q102 Chair: Turning to the Scottish Government, in that they may not be able to afford it, so they are very paragraph 21 of your paper you say, “There have been keen to ensure that they will be eligible for the highest some suggestions that the Scottish Government should possible level of support. They would not dream of take radical steps to ‘rescue’ tenants and landlords taking a property that might immediately take them from the impact of the reforms and, in particular, of into under-occupation restrictions. the under occupation deduction—at an annual cost of David Bookbinder: In terms of development plans, around £50m.” You go on to say, “Apart from our we cannot answer for sure your question about understanding that such action may be beyond the whether more one-bedroom properties are being built Scottish Government’s powers, it would seem to set a at the moment. Between now and the end of March dangerous precedent” and so on. I understand both 2015, up to 8,000 homes will be provided as part of elements of that, but why would it be beyond their the 32 local authorities’ strategic local programmes. powers? Presumably, if the Scottish Government wish We do not yet have data on bedroom size. I do not to give more money to housing associations and social sense that there is a mass move towards building one- landlords, they are free to do so, whether or not that bed properties at this stage; there may be among a is directly linked to combating the effect of the small minority at the moment. That may change, but bedroom tax. Surely they have freedom and flexibility if it does, it will be with very considerable reluctance, on that—leaving aside the question of desirability. with councils and housing associations feeling that it Can you clarify that for me? is a retrograde step. It may be a retrograde step that David Bookbinder: My understanding of where the some feel they have to take, but we are waiting to see powers begin and end on welfare reform in relation to the figures for what the current programmes are the Scottish Government is that parts of the social building. fund were devolved, bringing what is now the Scottish Welfare Fund to be administered within Scotland. Q99 Pamela Nash: Is there any anecdotal Council tax is devolved. The Scottish Government evidence—just from the conversations that you are with local authorities have acted in a very proactive having with your members—that they are thinking way to fill the funding gap that was left when council tax benefit was devolved so that council tax benefit about taking this into consideration? levels in Scotland can remain the same. They do not David Bookbinder: Yes. I have had one or two say to have the power, for instance, to top up people’s rent me, “We never thought we would look at it, but we or discretionary housing payments. That is the are looking at it.” Some of that will be about plans beginning and end of my understanding of the that go beyond 2015. Scottish Government’s powers. Dr Taylor: Of course, if they are wise, they will be thinking about how that relates to the balance of the Q103 Chair: If we find that housing associations or community around them. They should not be building anyone else are accumulating arrears, and decisions it at scale, even if the opportunity presents itself. have to be taken about whether or not they are pursued and in what ways, or whether they are written off, do Q100 Chair: May I turn to the options that are the Scottish Government have powers, as you available to the various stakeholders in Scotland? We understand it, perhaps to provide financial assistance have touched on social landlords, councils and the to housing associations that might find themselves in Scottish Government. Coming back to the question of financial difficulties in these circumstances? councils, as I understand it, you were saying that the Dr Taylor: I am not aware of any such power or DHP payments could be topped up by another 150%. resource at the present time. Is that the sole power, as you understand it, that local authorities have to provide financial assistance to Q104 Chair: Are you aware of any powers that people in these difficult circumstances? would stop them? Is there a rule that says they cannot David Bookbinder: I cannot pretend that I am an do that? My understanding is that, if the Scottish expert on local authority powers. As I understand it, Government wanted to help you hold down rents, they there may be some general well-being powers, but the could give you an injection into the financial budgets specific power that we have talked about—which is of your member housing associations, which would the most obvious power directly relating to the then construct a balance sheet and so on and be able, welfare reforms—is the power to increase DHP such if they thought appropriate, to reduce rents. My that, if you had £100,000, you could increase it to understanding is that they would have that flexibility. £250,000. Of course, there are powers relating to Because this was not specified or thought of at the advice provision and there are both local— time the devolution settlement was drawn up, my understanding is that generally they could do Q101 Chair: I understand that; you cover it in your everything that was not forbidden, and providing paper. It is quite reasonable that there are powers to additional financial support to housing associations or help people and so on. Who determines that the social landlords has not been forbidden. maximum additional DHP payment is 150%? Is that David Bookbinder: As long as the Scottish Parliament Westminster legislation or Scottish legislation? introduced legislation giving it powers, for instance, cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:08] Job: 035419 Unit: PG01 Source: /MILES/PKU/INPUT/035419/035419_o001_michelle_130611 - CORRECTED Final.xml
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11 June 2013 Dr Mary Taylor and David Bookbinder to fund social landlords, that may technically and public bodies. It could be argued that if we got legally be possible. I do not think those powers exist ourselves to a position where the Government were at the moment. As you say, the Scottish Government effectively bailing us out, that could turn us into can give grants to organisations for specific purposes, public bodies, and I do not think that would provided they have the legal power to do it. We then necessarily be welcomed by the sector. That is the get on to the question of where you draw a line in main reason I will be going back to check whether it terms of what actions the Scottish Government take is possible and to talk to others in my sector about to plug funding gaps created by UK legislation. That whether it is desirable. becomes a very live resource issue. Q110 Chair: Being bailed out by public bodies might Q105 Chair: That is politics in a sense. be considered by some to be more advantageous than David Bookbinder: Yes. going bankrupt. Dr Taylor: Indeed, which is why the discussion is Q106 Chair: If powers are devolved, regrettably it required, but it is not a discussion we have had so far. means that sometimes people have to make hard decisions. None of us likes to be put in the position Q111 Chair: Indeed. You are dependent upon public of being between a rock and a hard place. I just want finance at the moment, since, were it not for housing to establish—I think you are agreeing with me—that, benefit payments, presumably you would not be able should the Scottish Government want to make up the to make ends meet. difference of almost £50 million, less £10 million of Dr Taylor: Don’t forget, we do not receive housing discretionary payments, they would be able to do so, benefit payments; it is only tenants who are eligible and choose not to for reasons that I understand. for housing payments. David Bookbinder: Indeed. As long as they give themselves powers to make grants for certain purposes Q112 Chair: I understand that, but you are dependent to housing providers, they may well be able to do that, on Government policy, albeit at one remove. We will but how would the likes of CIH and SFHA feel if that have to look at that. Are there other ways? We have £50 million came off the housing supply budget we mentioned DHP. Should the Scottish Government have just been talking about? That is a question of desire to do so, presumably they could give councils priorities. money to top up DHP funds, if they felt that they could not fund it out of their existing budgets. Q107 Chair: Absolutely—isn’t it? Mary, is there David Bookbinder: I understand that is outwith the anything in the exchange we have had that makes you Scottish Government’s powers under the Welfare think that is not true and it is legally incorrect? Reform Act. In fact I got advice from the Scottish Dr Taylor: No; I am not aware of anything that would Government this morning to that effect. They cannot be legally incorrect, but I will be checking following top up an individual’s rent and DHP payments. this conversation. Chair: Again, our trusty clerk will check.
Q108 Chair: I trust that the clerk will also be Q113 Mr Reid: They cannot top up the DHP checking whether or not this is the position, but that payments to the tenant, but there is nothing to stop is my understanding. them increasing the allocation to every council by the Dr Taylor: But my mind is racing with questions equivalent amount—that is the 150%. It would then about the desirability of it, the compromises that be up to each individual council how it wanted to use would be required and the consequences. that money, but the Scottish Government could still increase the grant to local authorities. Q109 Chair: It need not necessarily come out of a David Bookbinder: It may be safest to check directly, housing budget. Who knows where we might be in as I am sure you will, with the Scottish Government. two years’ time or six months’ time? Money at the My understanding is that there are no powers in beginning of the Scottish Parliament was running like relation to discretionary housing payments. water, in a sense. Huge amounts of money were available. The difficulty almost was spending it. In Q114 Pamela Nash: My understanding is that that is those circumstances, it seems to me that this would already happening in Wales. We are not talking about not pose a difficulty. I entirely understand the point the figures of £40 million or £50 million here, but about resource problems. £750,000 has already been given by the Welsh Dr Taylor: I do not agree that it would not pose a Government to supplement DHP through local difficulty. Where money might be needed, there might authorities. I cannot see a difference. possibly be a power to do that and a willingness to David Bookbinder: I am not aware of any powers the use resources for that purpose. The key difficulty that Scottish Government have, but you may wish to talk arises for us in my mind at the moment is whether to them directly. that would change our status as not public bodies. I am very clear that housing associations are social, Q115 Chair: We usually expect our witnesses to independent and regulated not-for-profit businesses. know everything about the subjects for which they We are outside the public sector. We align ourselves have been invited, but am I glad or sad that this has with public policy goals in providing housing for not proved to be the case in these circumstances? people on low incomes—affordable to people on the Maybe we are being too extreme in terms of the lowest incomes. That does not mean that we are options that we are pursuing, but that is helpful cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:08] Job: 035419 Unit: PG01 Source: /MILES/PKU/INPUT/035419/035419_o001_michelle_130611 - CORRECTED Final.xml
Ev 18 Scottish Affairs Committee: Evidence
11 June 2013 Dr Mary Taylor and David Bookbinder because at one point we will certainly want to difficult decision of the Scottish Government to cope compare and contrast what is happening in Wales. I with that smaller pot of funding and what they would understand the point you made earlier about there choose to prioritise. being friction between Holyrood and Westminster David Bookbinder: Indeed. If that is what happened, powers in the way in which they are being operated and you inherit a system or start with a system, you here, but, short of everything being either taken back have to try to undo it or look at what bits you would again or devolved, it is difficult to identify how you prioritise to undo. With a set budget, of course there will not have some degree of friction in certain are some really difficult priority decisions to make, circumstances between two Governments who are but if you can make them at least in the knowledge of pursuing policies that on occasion diverge. Is there your house-building system and how you are looking something obvious that has occurred to you? One after your existing stock, you can do that in the round, option is simply to devolve all housing benefit or take even though there are still very difficult choices to back all of housing policy, but that is a slightly wider make. perspective. Have you been able to identify a way through this that would have eased the difficulties Q119 Mike Crockart: But it does not remove those without simply abolishing the bedroom tax? difficult choices. Dr Taylor: That does remain the obvious solution. David Bookbinder: No. May I say in relation to Wales that it is also worth Dr Taylor: No, but it is also worth saying that there looking at Northern Ireland, because there are some are very few people in Scotland willing to defend the interesting disparities between the devolution bedroom tax as a matter of principle. It is not about settlements around all of that? To focus on the implementation, so getting the decision making at the question of where the devolution split should be, the local scale would be one of the things that helped, SFHA has long made the argument that housing even though the decision would still have to be made. benefit—the system, powers, budget and so on— Mr Reid: Ed Balls seems to be changing policy on a should be devolved. We commissioned some joint whole lot of welfare issues. We shall see come 2015. work last year from Professor Ken Gibb at Glasgow university that made it clear that housing benefit Q120 Chair: Now, now. Let me just clarify that. To should remain with social security, which presents us what extent is it the case that nobody is in favour of with the problem that if social security remains having to make £50 million-worth of cuts in this area reserved to Westminster, housing benefit will remain of the budget? Unless I am very much mistaken, it is reserved along with it. A lot is in abeyance pending a not as if you are saying to us, are you, that if you referendum. In some ways, it is an academic question want to make £50 million-worth of cuts in housing until we have resolved the bigger question of whether benefit, there is a far better set of ways of doing it and we are talking about two separate Governments or— you would design it in this, that and the other way? If a cut is being imposed, on which people will have Q116 Chair: I asked in case there was something you views for and against, this is just as bad a way as any had looked at that allowed you to say, “Oh no, we other. Is that the kindest thing to be said for it? have considered this,” and such and such. Dr Taylor: Possibly; you might think that. Dr Taylor: We looked at it and it does not really help to resolve the position. Would you agree? Q121 Chair: I might. I don’t actually, but I wanted David Bookbinder: The conclusion, as Mary said, is to clarify what you thought, you see. that technically separating out housing benefit and Dr Taylor: I understand the dilemma and I am glad devolving it but not devolving the rest of the welfare not to be in the position of having to make the and social security system is all but impossible, and it decision as to where that would fall, but making the really has to be all or nothing in terms of devolution cut at the expense of the people who are on the lowest of the welfare system. income and, certainly in the case of social rents in Chair: That is very interesting. Scotland, those facing the lowest rents already, does not seem to me to be a proportionate, fair or Q117 Mr Reid: As we have already discussed, competent way of going about making a decision. housing benefit has been devolved. Could you clarify David Bookbinder: If you were trying your best to why you think it has made sense to devolve council make a cut in the fairest possible way and had a tax benefit but not housing benefit? chance to plan and have some control, you would be David Bookbinder: Bear in mind that council tax looking, as far as possible, at avoiding the kind of benefit has been very specifically devolved, and that retrospection we have been talking about that has put is not part of the universal credit system. Universal people in a situation they never expected to be in and credit marries together a number of key benefits, one had some sense of being able to make a choice about of which is help with your housing costs. So to what help they were going to get for what house they separate that off now breaks up universal credit. were going to get. Mr Reid: That makes sense. Q122 Chair: I understand the point about Q118 Mike Crockart: Even if it were possible, all it retrospection, because it comes up constantly in would mean is that decisions made here would have grandfathering and all the rest of it, but if you do not an effect on the block grant. Therefore, it would still have retrospection, you do not make the scale of be a difficult decision that someone would have to savings that you want. It is a much longer taper and make. It would be quite obvious that it would be the arises only until houses are vacated and all the rest of cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:08] Job: 035419 Unit: PG01 Source: /MILES/PKU/INPUT/035419/035419_o001_michelle_130611 - CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 19
11 June 2013 Dr Mary Taylor and David Bookbinder it, and therefore you do not get the instant savings or bedroom, even though it is a room? You can redefine cuts that are clearly being looked for. Is that a fair that as a storage room. In a sense, that almost comes assumption? back to the question of anomalies in the design of the David Bookbinder: Yes, it is. If you cut right now, system. I have never been entirely clear about that you have a big pool of people from whom you are distinction. making savings. I do not think either of our David Bookbinder: Let’s put it like this. The landlord organisations feels it is their role to explain how the can try anything. Whether the local councils’ revenues UK Government should address the deficit. We have and benefits, which have to follow the regulations, been asked to look at the rights and wrongs of the would be able to agree to it is another thing. In the under-occupation charge. example you have quoted, my understanding is that Chair: But you are here, you see, and, therefore, the local authority has little or no power to agree that while you are here we thought we would ask you. a disabled person needs room for equipment, which sounds absolutely legitimate—there are plenty of Q123 Mike Crockart: Before we digressed, we were examples of that—within the regulations. talking about possible ways of mitigating the effect, Chair: Within the regulations that are coming with and there has been a lot of chat around the anomalies the Act; I see. and how to deal with them. One way of mitigating the effects of bedroom tax suggested by the Chartered Q126 Mike Crockart: How does the bedroom tax Institute of Housing—I am not sure it is in the impact on wider social policy—in widening it out? submission—is to reclassify property size in some David Bookbinder: In housing terms? cases. Could you explain how that would work, and Mike Crockart: Yes. how effective a solution you think it would be? David Bookbinder: It is driving a horse and cart David Bookbinder: We have issued advice on the pros through some of the more modern ways of building and cons of it rather than urged councils and housing property that we have been talking about or how we associations to do it. Our sense at the moment is that allocate houses to allow for a more flexible situation. there may be limited scope for some landlords to There is also a sense that social housing—council and identify particular property types, whether in relation housing association accommodation—already has a to particularly small rooms, rooms with no natural battle on its hands to avoid any sense of light, or maybe through-rooms to other rooms. All residualisation and being the sector that gets beaten these types of things are minority circumstances, and up on. This certainly does not help that sense of the it may be that landlords, provided they talk to their sector wanting to feel, at least to a degree, a sector of local councils’ revenues and benefits to make sure that choice rather than a residualised sector. So it goes they are staying within the regulations, have limited against that as well in various ways. scope to say that what they have been calling a three- bedroom property is from now on going to be a two- Q127 Mike Crockart: Can you explain a little more bedroom property. how it acts against being a sector of choice? Is it Our sense—we are talking about a fairly grey area— because it is looked on as being penalised? is that the options to do that are somewhat limited. If David Bookbinder: The notion of the combination of you do that, as a landlord, the question arises whether modern ways of allocating and that somebody has a that leads to a rent reduction, which would largely sense of choice about being allocated a property that defeat the point. It may not always lead to a rent caters for later needs in a flexible way has gone. The reduction, but it is a complex area. Like a lot of issues social sector has prided itself on being able to offer around the bedroom tax, our sense has been to try to that and take a lead in those modern ways of using give it an element of perspective, saying that it is not stock and allocating housing. a great panacea that will work for everyone. It may help in certain situations, but it would probably be a Q128 Mike Crockart: Should it not try to maintain few per cent of the landlords’ affected property. that by having a greater degree of flexibility? Had it been there in the previous two to three decades, Q124 Mike Crockart: Do you have any sense of the perhaps such a big problem might not have built up percentage? You said a few per cent. now. David Bookbinder: I can think of a couple of recent Dr Taylor: I understand what you are getting at, but examples, one in England and one in Scotland. Both it is almost an upside-down version of what you are landlords said that they were able to reclassify suggesting. We have had flexible allocations up to between 3% and 4% of their affected bedroom-tax now. properties, not overall, in a way which basically helped the tenant escape the bedroom tax. Q129 Mike Crockart: Flexible allocations, yes. Dr Taylor: Flexible allocations in pursuit of balanced Q125 Chair: I can understand completely where a communities have been the theme of housing policy bedroom might be seen as a passageway because that in Scotland for the majority of my professional career is to do with the fabric of the house, but in in this sector. That has been done on the back of trying circumstances where, say, somebody is multiply to remove the strict link between rental affordability handicapped and they have to have various facilities and size of property, which would traditionally have or equipment kept in the house for them in a room on been based on size of property and 100% eligibility its own that is therefore not available as a bedroom, for housing benefit. Even if you had a bedroom or two do you have the power to define that as being one less more than you needed, it allowed landlords in the past cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:08] Job: 035419 Unit: PG01 Source: /MILES/PKU/INPUT/035419/035419_o001_michelle_130611 - CORRECTED Final.xml
Ev 20 Scottish Affairs Committee: Evidence
11 June 2013 Dr Mary Taylor and David Bookbinder to exercise flexibility in pursuit of sustainable already have to go far further away from support than balanced communities. If we now have a stock of they would have liked. property, as some of our members do, that was Dr Taylor: I agree with you. originally built as all of one size—the high-rise example I gave earlier would be a case in point—you Q132 Mike Crockart: The real problem is the lack are left with strictly occupying those absolutely to the of housing, and that has been there for a long time. maximum. That increases the chances of the people Dr Taylor: Yes, and that is an argument we have been living there being of very similar types, which is not making. Because housing policy is devolved, and the in the interests of a sustainable balanced community whole issue of supply and investment is always at all. One of the wider social impacts of all of this is devolved, you will be glad to know that is an the risk that it undermines sustainability and balance argument we are making with the Scottish in the community. Government, not with you.
Q130 Mike Crockart: Equally, you have already Q133 Chair: May I tie up some points before asking said that that housing is of a type that you would not you whether there are any other comments? It would put in a sustainable balanced community, because it is be helpful if you were able to give us updates on some felt that it is no longer suitable for that use. of the figures. David, I think that at one point you said Dr Taylor: Not in that particular example. Maybe it this was drawn up as at the end of May when you was not the best example to use, but there are lots of wrote the report. Anything like that would be helpful. estates owned and managed by councils—and, I would be particularly interested in whether, if arrears increasingly, housing associations—where there is a increase, there is evidence that people are only in monopoly of one particular type or size of property, arrears for the bedroom tax element, or whether they or an over-abundance of those, and the flexibility that say, “If I am going to be in arrears, I will just not pay we had under the old system to use that in different any of it.” Obviously, that would affect the scale of it. ways is going with the bedroom tax. We were talking earlier about people interacting with The other wider social policy impact is about the their landlords when they found themselves in destruction that this will cause to people who are difficulties. Clearly, making any payment is better living in communities at the moment. They will feel from your point of view than making no payment. I that they have to get out. My fear—it was almost a am not clear whether or not there is any discernible prediction two or three years ago when the proposals pattern at the moment about what people are deciding first came out—is that, if this comes in and people to do. feel they cannot afford to pay it, before we get to a Dr Taylor: I think it is too early. point where legal action starts to kick in, anxiety David Bookbinder: It is a complex picture. For levels will rise to a point where people think, “I’m instance, some people have been responsible for off; I’m out of here,” and they will abandon paying part of their rent if they are on partial housing properties. For us, that is very damaging and benefit. You are right that a proportion of those people expensive; it is very bad for the communities round will already have been in some arrears before the about. If people do that in any kind of numbers, it will advent of the bedroom tax. We are certainly disrupt not only their particular lives but also the lives encouraging landlords to account in a way that makes of the communities in which they live. That is among clear which are bedroom tax arrears and which are the original things we were concerned about in the other arrears. I am sure that the notion of part- first place. payment being better than nothing is very much David Bookbinder: To take an example, if we something that landlords are promoting. discover in a few months’ time that payment rates of the bedroom tax have been 60% or 70%, we might Q134 Chair: We have not spent a great deal of time regard those 60% or 70% of cases as great successes, on some of the elements in your written submissions but we will not know the story behind that. If about the adverse impacts upon you of having that somebody has done their damnedest to come up with reduced income, but you can assume that we have the rent, we do not know what has happened in terms taken all of that on board and we have raised with of how much heating they are using and what has you only points that are in addition to those you have happened to food or other household costs, and that is already made. something we can try to assess only over time. It will Mary, at paragraph 3.12 of your report you refer to perhaps seem like a success story with the landlord difficulties caused by people being on zero hours getting in the money, but we do not know what the contracts or in seasonal work. If people’s incomes wider social impact on that household will have been. fluctuate in that way, presumably housing benefit eligibility will be affected, quite considerably Q131 Mike Crockart: It is certainly something we potentially, on an enormously fluctuating and varying will need to come back to in future. I accept up to a basis. Is that a problem with which you are already point your comment about people breaking up having difficulties, or is it something you see coming? communities, but the shortage of housing in some Dr Taylor: That is already a problem. Where people areas has been causing that already, in that people are on partial benefit and their income fluctuates, it have been unable to access housing locally and have means that constant interaction is required with the had to go further afield to find housing. I see it in people who administer housing benefit in the local Edinburgh all the time, where we have huge under- authority. One of the issues I wanted to raise with you provision of housing and huge waiting lists. People at the end, because it is really outwith the scope of cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:08] Job: 035419 Unit: PG01 Source: /MILES/PKU/INPUT/035419/035419_o001_michelle_130611 - CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 21
11 June 2013 Dr Mary Taylor and David Bookbinder this particular inquiry, is about universal credit. There driving the increases, and everybody else is having to are many aspects of those proposals that mean it will be hit by a sledgehammer in order to solve a problem. be much harder in future for people to see, first, what I do not even think that these proposals will save the they are receiving by way of a contribution to housing money overall that they are intended to save, because costs and, secondly, to query whether it has been they do not deal with rising rents in London and with correctly calculated. In some cases that is more the fact that people will move to smaller properties straightforward than others. Where people are where they may get 100% support for rising rents. We working it is very difficult. When people are on partial are trying to hold rents down. Our property portfolio benefit and their income fluctuates, the fact that that tends to contain more larger family sized local facility is being withdrawn complicates things accommodation with a structural mismatch in terms even further. The difficulty down the line—and not of household size and demand, and people are being very far down the line at that—is that universal credit penalised. It does not feel like a policy that fits means that all money will now go direct to tenants Scotland. and they will be expected to pass on their share of the rent support. If we are already seeing a problem of Q137 Chair: We were using the word “design” in a arrears spiking around under-occupation and, in some different context earlier. It is a policy that has been areas, spilling out beyond that, we are very nervous devised as a solution for a problem that has been about what will happen in the event of universal identified predominantly in London. credit. Dr Taylor: Certainly.
Q135 Chair: We generally understand that point. Q138 Chair: That clarifies that. I did say that at the One of the points we have been looking at in relation end we would ask you whether or not there were any to various industries and so on at different times is the answers that you had prepared for questions we have growing use of zero hours contracts. It strikes me that not yet asked. Therefore, we would be happy to give this is a classic case where the private sector is passing you the opportunity to tell us anything you think we on to the public sector the burdens of dealing with have missed, or maybe something that goes a bit this. Presumably, this is much more labour-intensive beyond this, of which we ought to be aware. in terms of calculating people’s ever-changing benefits Dr Taylor: I would like to urge you to revisit the structure, and quite substantial costs are being House of Lords amendments, and I will supply those imposed on you by companies adopting what for them to you. I would like you to reflect on whether repeal is the cheapest possible option. That is a matter on would be the most efficient way of dealing with all which we will reflect. these things. I would also like you to consider whether Dr Taylor: In its attempt to streamline the something along the lines of the transitional protection administration by going online and reverting to that was given to people in receipt of local housing telephone rather than local services through local allowance should now be introduced retrospectively authorities, the public sector is also retreating and to 1 April for those under-occupying, and to recognise leaving housing associations and local authority the possibility that there may be no suitable offer for landlords to pick up the pieces. The private sector in them and, until they have turned down a suitable offer, its wage structures is doing what you have just they should not be penalised. I can send you a letter outlined and the public sector is also retreating by with the detailed points. trying to save money, but we are in the firing line because we are the ones with the direct relationship with tenants. We are still on the ground having that Q139 Chair: That would be helpful, and that would dialogue and being cast as the villains of the piece. It be published on the website. Clearly, we are engaging is a very uncomfortable place to be in. If the revenue with some of this for the first time, as are a number income streams do not work long term, there is a of other bodies. danger that we will not be able to be there either. That David Bookbinder: To conclude, I would make a is the key thing at risk in all of this. specific comment and a more general one. We probably have not given enough credit to some of the Q136 Chair: In relation to the press release we put mitigating actions that the Scottish Government have out about this, you made a comment that we used taken, which are within their powers, in terms of when you described the bedroom tax as “a policy considerable funding for advice services, some of designed for London”. I did not quite understand that. which is ring-fenced for social landlords. Funding has My parliamentary colleagues in London are not been given to the likes of CIH, SFHA and other jumping up and down with enthusiasm about this bodies to help advise housing providers on how to get either. I was not quite clear what you meant. On a through, make sure they are completely up to date couple of occasions we discussed the same problems with what is happening and support tenants as best being faced in English cities or rural areas as those they can. We have to emphasise that the Scottish experienced in Scotland. Government have acted where they can. Dr Taylor: I purposely did not make the point that it As a general conclusion, if you really could measure is a policy designed for England. I think it is a policy the financial and social impact for both social designed for London because, when you look at the landlords and the tenants affected, I have a great figures of how housing benefit has grown as an area feeling that the savings that the DWP is making would of spending over the years, it is evident that what is be completely annulled, because the sense of distress happening in London and the private rented sector is that this is causing to individuals and the threat that it cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:08] Job: 035419 Unit: PG01 Source: /MILES/PKU/INPUT/035419/035419_o001_michelle_130611 - CORRECTED Final.xml
Ev 22 Scottish Affairs Committee: Evidence
11 June 2013 Dr Mary Taylor and David Bookbinder poses to social landlords and the services they run view that they could have done more in terms of other seems to go way beyond the savings in many respects. things, we are going to explore some of these, or at Chair: I am just looking at the evidence of Margaret least the Clerk is. Unless there are any other points, Burgess. She indicates that they have put in £7.9 thank you very much for coming along for what has million for advice services and stuff like that. We been quite a long but very illuminating session. recognise that, although we would probably be of the cobber Pack: U PL: COE1 [SO] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG02 Source: /MILES/PKU/INPUT/035419/035419_o002_michelle_130618 CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 23
Tuesday 18 June 2013
Members present: Mr Ian Davidson (Chair)
Jim McGovern Sir James Paice Graeme Morrice Mr Alan Reid Pamela Nash Lindsay Roy ______
Examination of Witness
Witness: Keith Dryburgh, Policy Manager, Citizens Advice Scotland, gave evidence.
Q140 Chair: Welcome to this meeting of the Scottish people—clients, tenants and landlords—are in limbo Affairs Committee. As you know, we are looking at at the moment. We have had that initial hit, where the question of the bedroom tax, and a variety of people are starting to get into arrears—they have had issues to do with its implementation, design and the letters and are now fully aware of what is principle, and whether enough is being done in happening—but a lot of people are in limbo because Scotland to mitigate its effect on those who are they are trying to take short-term and long-term affected by it. actions to mitigate the impact, either by trying to Before we start, I should mention to my colleagues move home or by applying for discretionary housing the visit that we intend to make to the Western Isles. payments without success. So a lot of people are in a You will be aware that the Western Isles, and Orkney position where they are building up quite a lot of and Shetland, have published a report “Our Islands— arrears. They are trying to take actions to mitigate the Our Future”. They will have an opportunity to discuss impact, but they are struggling to do so. The majority those issues with us when we go to the Western Isles. of people we see are building up arrears and have Obviously these are people who are struggling for nowhere to go at the moment. freedom from rule from Edinburgh and want more devolution, which fits in very well with what we did Q142 Chair: Earlier you indicated that you had on the Crown Estate. So we can put that in the diaries lobbied against the introduction of the tax. We have and look forward to it. your written advice, but could you clarify for the Can I thank you for coming and ask you to set your record why exactly that was? presence here in context? Can you say who you are, Keith Dryburgh: Based on the evidence that we have what you do with CAB and what CAB’s involvement on our clients—we tend to have clients who are more is with this? vulnerable than the general population—we thought Keith Dryburgh: Thank you very much for inviting that this would be a change that would impact heavily me. My name is Keith Dryburgh and I am the policy on people who are vulnerable and least able to make manager at Citizens Advice Scotland. You probably changes to avoid it. We thought it was a change that know about CAB, but I will do a quick run-through. would impact on the most vulnerable in Scotland. There are 80 citizens advice bureaux in Scotland, in 30 out of the 32 local authorities, so we have a pretty national coverage. Last year we dealt with over half a Q143 Sir James Paice: Taking that on a stage, how million problems or issues for our clients, of which do you justify it, or do you think it is right that people about 200,000 were related to the benefits system, so should receive housing benefit, effectively, for rental that is by far and away the biggest area of advice. of properties with rooms that they do not need? I am Around 20,000 of those issues last year were to do slightly unsure about whether your objections to it with housing benefit—an increase of 11%. Most of were that it was impracticable, or whether you had a that increase was towards the end of the year—around fundamental objection to the principle behind it. March—in the lead-up to the implementation of the Keith Dryburgh: Housing policy in the last couple of under-occupancy rules. We started recording a certain decades has been about building bigger homes and number of bedroom tax issues from April. In the first having that flexibility. If you have a two-bedroom two months, we have had about 800 or 900 people property, it gives you the flexibility to put a single come in seeking advice directly on the issue, so we person or a family in there. The way the situation has are in a pretty good position to comment on the grown is that, because of that flexibility, people are in implementation of and the issues with the bedroom houses that you would say are maybe too big for them, tax. but it was not they who applied for a two-bedroom or three-bedroom house—it is just the way housing Q141 Chair: Could I start by asking you to give us policy has acted. It is not that the people have gone your view of the bedroom tax? out to make sure that they get more bedrooms than Keith Dryburgh: We were certainly lobbying against they need—it has been housing policy. Our objection it when it was in the Bill. Now that Bill is an Act, to it is that it is retrospective and is affecting people we are trying to work with key partners locally and when they did not make a decision to over-occupy. nationally in order to mitigate it; I feel that is probably Either they were given the housing when they did not the best way forward. In terms of how we think it is apply for it, or their circumstances have changed since impacting on people at the moment, I think a lot of they were allocated the housing. It seems a bit unfair cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG02 Source: /MILES/PKU/INPUT/035419/035419_o002_michelle_130618 CORRECTED Final.xml
Ev 24 Scottish Affairs Committee: Evidence
18 June 2013 Keith Dryburgh to do it retrospectively when the people did not make Q149 Sir James Paice: In some ways, Jim’s the decision in the first place. comment is relevant. To conclude, would you accept that there are issues with housing benefit that need to Q144 Sir James Paice: What do you perceive to be be addressed? Have you put forward alternatives in a the ways in which, certainly to my knowledge, consultation? Given the overall economic situation, individuals and families are able to mitigate the effects are there other ways in which the housing benefit bill by utilising the extra room or rooms, whatever it may could be capped or reduced in the way that the be—for example, by letting them out to lodgers? Department for Work and Pensions is trying to do, or Downsizing is an option, but you have partly are you simply defending or believing in the situation addressed that. Do you think it is beyond reason to as it currently is? expect people to be able to take measures to mitigate Keith Dryburgh: I understand from the figures that the impact of the tax, as it is called, or do you just housing benefit expenditure has gone up significantly. That is not too surprising, given that we are at the tail think that, because of the retrospective element, as end of a double-dip recession; you would expect it you have described, it should be left as it was? to increase. Other figures show that housing benefit Keith Dryburgh: Because there is a bit of a mismatch increases have happened mostly in the private rented between demand for and supply of one-bedroom market. I believe that, especially in Scotland, rents housing in Scotland, with the best will in the world, have been kept low; it is more that people are most people will not be able to get a one-bedroom increasingly needing housing benefit. Our property. I think that 60% of tenants need a one- organisation’s view is that getting people into jobs so bedroom property, but only 26% of tenancies are that they do not need housing benefit is the best way actually one bedroom, so it is a physical impossibility of cutting the bill. The best way of getting people that everybody could move. As I think was mentioned off housing benefit is through economic growth and at the Committee last week, the lucky few will be able more jobs. to move, but a lot of people will not, even with the best will in the world, either because there is no new Q150 Sir James Paice: You refer to the private tenancy available or because there is too much rented sector. Of course, housing benefit is not paid demand for it. for surplus rooms there. Do you think it is right that We have not seen many cases regarding taking in there is a difference between housing benefit in social lodgers. A number of these households—79% of housing and housing benefit in the private sector? them, I think—have a tenant with a disability. Perhaps Keith Dryburgh: On a point of principle, it makes they would be worried about taking in a tenant when sense that it is fair in both cases. It is just that, because they are themselves quite vulnerable. of the way in which it has historically grown up, you are affecting 105,000 households in Scotland. You Q145 Sir James Paice: Can you clarify what you have been saying for decades that it is okay that they mean in that regard about disability? have an extra bedroom, but suddenly it is not okay. Keith Dryburgh: I think the Scottish Government said There just is not the provision built in to make sure that 79% of households have an adult with a disability, that people actually have somewhere to go. We have and some of them will have a mental disability. It may seen cases where people have lived in the same home be inappropriate for them to share with another for 43 or 35 years and are suddenly being told, “You person. have been fine for all of this time, but suddenly there Chair: Before you go on, Jim wants to come in on is a rule change. Nothing has happened with you, but that point. you can’t live here unless you can afford £15 or £20 a week to do it.” If they cannot, they have to move Q146 Jim McGovern: It is a very brief point. Were out of the village and so on. I suppose it is the retrospective nature of it. organisations such as your own—or even your organisation, Citizens Advice Scotland, in particular—consulted before this became legislation? Q151 Lindsay Roy: The possibility of a tenant Keith Dryburgh: I am trying to recall—it is a couple taking in lodgers has been mooted at times. Has any tenant raised the risk of so doing if they have children of years ago now. I believe there was consultation at home? regarding that at the beginning of the Act and that we Keith Dryburgh: I have not seen many cases registered our concerns at the time. There was involving lodgers. We have seen quite a few cases widespread concern at the time, but we did not get the where there is a separated parent who has a two- feeling that the Government were necessarily listening bedroom property and looks after his or her children to that concern. at the weekend, as part of the separation agreement and so on. They have raised concerns that they cannot Q147 Jim McGovern: So it is in writing somewhere afford to stay in that property. They would either have that the Government asked for your view and CAB to move to a one-bedroom property, where their kids responded. couldn’t stay with them, or take in a lodger, which has Keith Dryburgh: I think it was a public consultation implications for the children staying over as well. into which we inputted. Q152 Lindsay Roy: Are they saying that that is Q148 Jim McGovern: So that is available to us. further division within a family that is already Keith Dryburgh: Yes, I can send that on. separated, potentially? cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG02 Source: /MILES/PKU/INPUT/035419/035419_o002_michelle_130618 CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 25
18 June 2013 Keith Dryburgh
Keith Dryburgh: If there is a separation and one Keith Dryburgh: Yes, absolutely. I think there are partner has majority care and claims child benefit, issues right down the scale. In principle, I think it is they are exempt, but the other partner who has the retrospective nature of it. If it was something to minority care would not be exempt. be implemented for new tenants, and existing tenants could be eased or protected into new homes, it would Q153 Lindsay Roy: So is it inhibiting access? not be such a bad principle; the problem is the sudden Keith Dryburgh: Potentially. I think it has been jar to tenants. On implementation, as we have housing allocation policy—certainly for many local discussed, if there were more exemptions, especially authorities in Scotland—to give separated parents for children and adults with disabilities, perhaps the with child care responsibilities two bedrooms, so it edges on it would be softened. I suppose there is also goes against that. I do not have any numbers, but we the friction between Scottish housing policy on have certainly seen large numbers of separated dads, allocation and the new benefit rules, which go against especially, who have raised this kind of concern about each other completely. A lot of housing associations, whether they can still see their kids. COSLA and so on feel that it is causing them to take a retrograde step and that they will offer a poorer Q154 Sir James Paice: You have said that is an issue service because of it. of the implementation of the policy rather than the fundamental policy. Q157 Lindsay Roy: But, in terms of principle, the Keith Dryburgh: Yes. I have written down a few key elements are retrospection, allocation and changes to the implementation that could soften the availability. edges for a lot of people. I think the exemptions are Keith Dryburgh: Yes. Introducing it like that, without key. The media made a lot of the exemptions that being able to increase the supply of available housing, came out just before the start—for example, for the just means that a lot of people will lose out. armed forces and foster carers—which were welcomed. There was talk about disabled children but, despite the High Court case, that was not actually Q158 Lindsay Roy: Some people would view this as written into the regulations, so there is still some lack a bolt from the blue that is arbitrarily imposed. of clarity about whether disabled children are required Keith Dryburgh: Most politicians and people who to share a room. We have certainly seen quite a few follow this will know that it has been coming for three parents of disabled children who are still being told years, but a lot of people did not realise that until they that they are under-occupying. We would like an got arrears letters in April. We cannot assume that exemption in the regulations for children with people have had three years to deal with it. A lot of disabilities, to improve the implementation of it. people are suddenly finding now that they are in We would also like to exempt disabled tenants with some trouble. significant adaptations. There are around 12,000 households in Scotland where there is a disabled Q159 Lindsay Roy: Having read the transcript from person who has fitted disability adaptations such as last week, you will note that Mary Taylor said, “What handrails, wet floors and so on. We would like them we are seeing is rafts of anomalies that suggest that to be exempted. We would also like all tenants to have the design of the system is inherently flawed.” Would temporary protection until they have actually refused you agree with that? a reasonable housing offer, so that a person would not Keith Dryburgh: I certainly think there are some be penalised when there was nothing available for problems. I think they have tried to keep it simple so them. If there is something available and they turn it that it applies to as many people in that position as down, that may be when the bedroom tax applies but, possible, but we would argue that it affects some very if it is not offered to them, we think they should be vulnerable people, such as people with disabilities offered protection. who have been given homes specifically because of their disability, to store equipment or because they Q155 Chair: Do you have a list of the amendments cannot sleep in the same bed as their partner. So you that you would want to see? Rather than your giving them to us just now—although obviously we will have a housing policy that says, “Yes, you can have discuss them now—it would be helpful if you could an extra bedroom for your health,” and a benefit back that up by giving us something in writing. I think policy that says, “No, you can’t.” that would possibly cover the point. Keith Dryburgh: I can do that. Q160 Lindsay Roy: Is the protection for disabled Chair: That leads us on quite neatly to Lindsay’s youngsters only? next point. Keith Dryburgh: In terms of disability, but I think there is a lack of clarity about whether there is Q156 Lindsay Roy: Last week we discussed whether protection. There was the Gorry court case, where it any problems with the bedroom tax were ones of was ruled that it was against their human rights to principle, design or implementation. What is your make disabled children share a bedroom, but that was view on that? not written into the regulations afterwards. It is Keith Dryburgh: I read the transcript; it was quite an possible for people to be exempted from it, but it is involved discussion. not across the board. We are certainly seeing parents Lindsay Roy: It was quite interesting, wasn’t it? with disabled children who are still affected by it. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG02 Source: /MILES/PKU/INPUT/035419/035419_o002_michelle_130618 CORRECTED Final.xml
Ev 26 Scottish Affairs Committee: Evidence
18 June 2013 Keith Dryburgh
Q161 Lindsay Roy: In your view, what are the other £65,000 to allow for the disability of her son. Is that inherent flaws? Are there any unintended factual? If it is, what is your view on it? consequences from your point of view? Keith Dryburgh: As I mentioned, the Scottish Keith Dryburgh: I may come back to that; I have Government identified 12,000 households that have covered some that I have thought of before. It is more adaptations that are affected by the bedroom tax— the supply and demand problem. stairlifts, handrails and so on. I do not know how much that costs, but certainly that does sound Q162 Lindsay Roy: Availability. ridiculous—in the sense that it does happen. Keith Dryburgh: Yes; I think that is the big issue. Q167 Jim McGovern: It is not unique. Q163 Chair: Can I clarify things? I take your point Keith Dryburgh: It is not unique; that is what I was about retrospection and, therefore, a reasonable offer, trying to say. but would that not have the effect of completely undermining the efforts to make a cut in expenditure? Q168 Chair: Surely that is the sort of expenditure for Keith Dryburgh: If you are talking about a coherent which the discretionary housing payments were policy that gets people into the right homes and solves designed. overcrowding, doing it in an incremental way, to get Keith Dryburgh: That is a good point, but last week people into the right place, is the right way of going it was pointed out that the discretionary housing about it, but, if you are trying to save money, doing it payment fund is £10 million, whereas the impact of quickly is the way to go. I think this has been more the bedroom tax will be over £50 million in Scotland. about saving money than about a coherent housing The DHP fund is not just for the bedroom tax—it is policy to solve overcrowding. for things such as local housing allowance changes. The fund is already earmarked for other things as well, so even less than that will go towards people Q164 Chair: Do you have any estimate of how many affected by this. people would be lifted out of the net if you applied Doing some quick maths on the train, I worked out your two criteria of retrospection and reasonable that, if everybody affected by the bedroom tax got offer? payments, the fund would last only eight weeks, so Keith Dryburgh: I do not. It depends on the area. For for the rest of the year nobody would get it. Most example, we have 12,000 households in rural Scotland clients we are seeing at citizens advice bureaux are that are affected. That could cause serious problems applying for DHPs. We are at the stage where people in terms of supply, because if you live in a village, have made the application but most of them have not there are only a few social houses and you might have heard back. In Glasgow, 5,500 applications were made to move 50 miles to find another one. It might be more in April, so going through them will take a long time. difficult for them than it is for somebody in I think that, in the next couple of months, we will start Edinburgh. Equally, you could have high demand in seeing a number of clients who are reaching crisis Edinburgh. From the cases I have seen, I think people point because they have not got the DHPs because are really struggling to find those homes. They are there just is not enough to go round. applying—they are bidding, trying to go for exchanges and so on—but they are just not getting Q169 Lindsay Roy: As far as you are aware, how there. It could take a couple of years to move people many councils have added to the discretionary fund? about. Keith Dryburgh: I do not know the figure for that. I think it is difficult for them to do so. Q165 Chair: Right. Do you accept that in those circumstances the savings target would be unlikely to Q170 Lindsay Roy: I am aware that my own council, be met? for example, has added £1 million towards it, but I Keith Dryburgh: In the short term, yes. In the long still think that is not adequate to meet the needs. term, I think this is a benefit change that will save the Keith Dryburgh: Yes. I am not aware of how many UK Government money, but could put money on local have added to it. authorities, social landlords, the NHS and so on, so Chair: Alan will come on to that later and may pursue it has knock-on effects. That piecemeal, incremental it. Can I turn to Pamela? approach would probably lessen the other public costs. In terms of UK Government costs, it would Q171 Pamela Nash: You mentioned earlier that probably reduce the actual benefit. between 800 and 900 households have come to Chair: Jim wants to follow up on that and then I will Citizens Advice for advice on this. You mentioned come back to Lindsay. that you are beginning to see little patterns in that. Could you expand on that a bit and give us your Q166 Jim McGovern: On the subject of short-term reflections on it? savings but long-term losses, one of the most Keith Dryburgh: We actually saw quite a few people ridiculous cases I have read about recently in the before April, although our stat system did not start newspapers involved a woman who has a quite recording this issue until April. We saw people, severely disabled son. The local council spent £65,000 probably in the autumn, who had received a letter. We on extending her house to allow for the disability of saw people, maybe in February or March, who had her son, and she is now going to be evicted. Wherever received a second letter and were starting to get a little she moves to, the council will have to spend at least bit worried about it. We saw a lot of people in April cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG02 Source: /MILES/PKU/INPUT/035419/035419_o002_michelle_130618 CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 27
18 June 2013 Keith Dryburgh who had received another letter saying that they were me with a DHP?” However, I do not think there is in arrears all of a sudden; a lot of people were shocked universal knowledge of that. With the exemptions at that point. We cannot assume that everybody especially, there are quite a lot of people who come registered that it was them to whom it was applying. in who are exempt, but they are still getting letters The automatic thing for everybody is to apply for and so on. There is not a good knowledge of that. DHPs, perhaps because there is little else they can do. A lot of people are registering for house exchange Q174 Pamela Nash: What more can be done to websites and so on. We are starting to get people back inform people? In your view, who should be doing in, because local authorities are asking whether they that? can pay back rent arrears and so on, so we are in a Keith Dryburgh: In Scotland, it has been a lot of the kind of limbo where, across the country, we are seeing local organisations, such as citizens advice bureaux, that people who have applied for DHPs are starting to housing associations and local authorities. I know they run up arrears and are trying to apply for houses, but have taken a very active role—not just sending a have not been successful in any of those. A lot of letter, but actually going to visit people in person to people are building up arrears, and I do not think that try to make sure that they understand. There have they know what is going to happen to them in the next been a lot of learning points for social landlords that couple of months. We are seeing a lot of people who you actually have to speak to somebody to make sure may be on the verge of crisis, but in the next couple that they understand; I think that has come from the of months we will start to see people who probably direct payments pilot as well. It is key learning that are in crisis. you need that local presence to make sure that people understand what is going to happen to them. Q172 Pamela Nash: When do people generally come for advice—not just on the bedroom tax? Is the Q175 Pamela Nash: On that point, we have talked highest number already at crisis point, or are people about the situation in rural Scotland. Do people in coming in time to get help? very rural areas have access to Citizens Advice and Keith Dryburgh: It is right across the spectrum of other advice services, or is that something that we also advice. You get people who come in because they do need to improve in Scotland? not know what they are entitled to. You get people Keith Dryburgh: There are a lot of citizens advice who need help with application forms. You get people bureaux in rural areas. There are bureaux in the who need help to make a call to find out where Western Isles, in Orkney and Shetland, in places such benefits are when payments are late. We represent as Kinlochbervie way up north in Sutherland and so clients at around 5,500 benefit tribunals a year; that is on. Of course, there will be people who have to drive mostly ESA. You also get an increasing number of 50 or 100 miles to get there, so it is important that people who are at crisis point, mostly because of these people get advice as well. On that point, it is sanctions—some because the bedroom tax is now very important that the DWP and the UK Government creeping in. They are literally unable to afford fund these kinds of support services—housing electricity and food. The only thing you can do is refer associations and so on—to make sure that people them to a local church and so on. We are starting to make the right choices. Especially with universal see that kind of crisis client that we were not seeing credit coming in, it is essential that claimants— before. especially with online applications—have an understanding of what is expected of them. It is Q173 Pamela Nash: I want to ask you about the important that the DWP funds local services to knowledge that people are coming to Citizens Advice provide that information. with. Are customers coming to you knowing that they may be eligible for discretionary housing payments, Q176 Pamela Nash: The Welsh Government have for instance, or is that something that is being given also put money in to advice services for the Welsh to them? I am also concerned about the exemptions people. Do you think that is something the Scottish that the Government announced previously. Just this Government could contribute to as well as the DWP? morning, the Government published new guidelines Keith Dryburgh: Back in January, the Scottish saying that, for instance, the family of someone in Government announced funding to advice services of, the armed forces who is in barracks will not have an I think, £5.4 million, a percentage of which is going exemption, whereas, before, the understanding was to front-line citizens advice bureaux services. We that some of those people would have that. Those certainly welcome that. Some of the funding is going families are therefore now in arrears. How much to housing associations. So there is some funding, knowledge are people coming in to you with? which we very much welcome. Keith Dryburgh: There is some knowledge. Most people were taken by surprise by the arrears they were Q177 Chair: Can I clarify the question of rural generating and did not understand that they were areas? You mentioned Stornoway. As you will be going to be affected. You get a lot of letters that do aware, some people will be 50 or 100 miles away. In not apply to you, so they may have put it away. There terms of the capacity that you have to handle phone are a lot of vulnerable people with mental health queries, are you overwhelmed with work or can issues who may not understand all the mail that they people generally phone up and get through? get. People have limited knowledge, but a lot of them Keith Dryburgh: We have Citizens Advice Direct, ask their friends, who tell them about DHPs and so which is a telephone advice line that people can get on, so some of them come in and say, “Can you help through to. In terms of citizens advice bureaux, we cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG02 Source: /MILES/PKU/INPUT/035419/035419_o002_michelle_130618 CORRECTED Final.xml
Ev 28 Scottish Affairs Committee: Evidence
18 June 2013 Keith Dryburgh are definitely reaching the limit of our advice Q183 Mr Reid: You mentioned the Scottish provision. That is why the Scottish Government Government funding. Do you have other significant advice funding is very welcome. Part of that is sources of funding? because the benefit issues we are getting are not Keith Dryburgh: Citizens Advice Scotland itself is straightforward. It is not helping someone to do an funded by the Department for Business, Innovation application; it tends to be representing their appeal and—I am trying to remember what it is called— and trying to find food for them. It is not just the Chair: Whatever it is now. number of issues—it is that the actual type of issues Mr Reid: The Department for Business, Innovation is becoming quite crisis-driven. and Skills. Keith Dryburgh: Citizens advice bureaux themselves Q178 Chair: Given that you have CAB Direct— are funded by local authorities from the block grant operating out of Glasgow, if I remember correctly; I that the Scottish Government give them. Each citizens was at its opening a while ago—and the individual advice bureau has an individual funding agreement bureaux, are you still overwhelmed with work, or is with its own local authority, with some being funded there still a surplus capacity? If somebody in the better than others. So far they have been relatively Western Isles is trying to get through to you, will they protected compared with citizens advice bureaux in be able to do so and be taken through their situation England. in some detail, or are you rationing people to five minutes on the phone, or is there a huge queue? Give Q184 Mr Reid: How much is the amount that comes me a feel for that. from BIS in comparison with what comes from the Keith Dryburgh: I think we are reaching the limit of Scottish Government? advice and that our advice statistics this year show Keith Dryburgh: The BIS money funds just the that. They have gone up a bit, but, as I was saying, umbrella organisation Citizens Advice Scotland. The the type of issues that are dominating at the moment actual advice funding comes directly from the Scottish can be quite distressing and crisis-driven. That is Government, through local authorities. impacting on other areas of advice. Advice on benefits has gone up this year, but most other areas of advice Q185 Mr Reid: Is it directly from the Scottish have gone down. A consequence of the benefit Government or is it from local authorities? changes is that we are able to deliver less advice on Keith Dryburgh: The block grant goes to the local the other areas. authorities. It is then up to them. They must fund advice, but it does not have to be from citizens advice Q179 Graeme Morrice: I want to pick up on an bureaux; it is up to them to make that decision. earlier response you made. I think you said some However, the Scottish Government fund a number of people had been receiving notifications from local projects that are run by citizens advice bureaux and authorities—and, presumably, housing associations— so on. that they were eligible for the bedroom tax when in fact they were not. Is that an extensive problem that Q186 Mr Reid: Do you get any money from the you have come across? DWP, because a lot of your work is to do with Keith Dryburgh: I do not think so, because the benefits? exemptions are so limited that a very small percentage Keith Dryburgh: Some local CABs do, but not on a of people who might have been are actually exempted national level. from it. We have seen a limited number, but the problem is that not enough people are under the Q187 Mr Reid: How is it determined which ones get exemptions. money and which do not? Graeme Morrice: Absolutely. Keith Dryburgh: Just on a local negotiation with local jobcentres and so on. Q180 Chair: Surely pensioners are a pretty substantial section of those who are in social housing, Q188 Mr Reid: It is the local jobcentre that takes and surely all of those are exempt. a decision. Keith Dryburgh: Yes, that is true. Keith Dryburgh: There is certainly no significant national funding. Q181 Chair: Is that not the biggest single category of people who are in social housing? Q189 Mr Reid: Do local jobcentres have a budget Keith Dryburgh: I am not sure of the statistics, but I that they can use to give to organisations like yours? suppose that is a big exemption. Keith Dryburgh: I am not entirely sure how it works, but I know that some citizens advice bureaux such as Q182 Chair: It was on the point of how many people Stirling have a partnership agreement on a small basis. are exempt versus how many people are being caught by it. Is the exemption for any household that has a Q190 Jim McGovern: I know for a fact that, in pensioner in it, or for households that consist simply Dundee, there are many tenants who are affected by of pensioners? what has become known as the bedroom tax who Keith Dryburgh: I believe it applies when there is one would be quite happy to move to smaller houses, but person over the age of 65 or of pensionable age. unfortunately smaller, one-bedroom houses are not Chair: That is helpful. Alan wants to come in on this. available. 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18 June 2013 Keith Dryburgh
Keith Dryburgh: I think it is and that there is a serious weeks. So we have concerns about tenants moving to problem with supply and demand. A member of my the private rented sector. family is affected by it as well. She has applied for three house exchanges she is entitled to, but the Q194 Jim McGovern: I do not expect you to have person she was exchanging with was not entitled to exact figures, but even a ballpark figure would be her home. Even though she is showing herself willing helpful. Can you tell us how many people you are to find houses that she is allowed, it is dependent on aware of having moved from the house they were in who you are exchanging with. It certainly is not easy to smaller properties since April as a result of this at all. She is very willing to do it—it is just that she legislation? has not found a way to be able to do it. I think that is Keith Dryburgh: I have not seen any cases. That is a very common case for people across Scotland. not statistically sound, but nobody coming to a bureau has reported that, as far as I have seen. Of course, if Q191 Jim McGovern: If I may use an example, my you had managed to do it, you might not come to sister will be affected by this legislation. Is there any a bureau. way you could imagine your sister, your mother or Chair: That is right. By definition, if you have solved another woman saying, “I will take in a lodger to your problem by moving, you will not come to avoid this”? Citizens Advice to seek help. Keith Dryburgh: We have concerns regarding lodgers, because we believe that there may be thousands of Q195 Jim McGovern: No, but Citizens Advice vulnerable people affected by this—people who are in Scotland might have helped people to move into a the support group for employment support allowance, smaller property. who receive a higher rate of DLA and so on. Those Keith Dryburgh: That is a fair point. are not people who could easily live with other people. I would be concerned if a number of people Q196 Jim McGovern: But you are not aware of that. among our clients and across Scotland were required Keith Dryburgh: No. I know that last week Mary said to take on a lodger. that the lucky few had managed it. It sounds from that that there are a limited number who have managed it Q192 Jim McGovern: You may have covered this so far, but I do not know whether anyone is collecting point earlier, but it is worth repeating if you have. those kinds of statistics. What are the most common responses that you get from people who are being hit by this change? Q197 Chair: Can I follow up on the point that you Keith Dryburgh: A lot of people are in panic, really, made about some private letting agencies not being because they did not realise that it was going to affect willing to let to people who are on benefits? If that is them; only now that they are in arrears do they realise true, presumably it is not an issue that has arisen only that. A lot of people just assume, “My rent is paid. I following the introduction of the bedroom tax. am in the support group for ESA and claim incapacity Presumably it is something that has been under way benefit. I do not pay rent.” There is not that for some considerable time. understanding that you have to pay your rent. Maybe Keith Dryburgh: Previously we had the “no DSS” £15 or £20 does not sound like much to some people, mantra, although that seemed largely to disappear in but for around 20% of those who are affected it is the last 10 years or so. I think there may be a re- more than 10% of their income, so it has a huge effect emergence of that, although I would not be completely on them. confident in saying that because we have had a limited number of cases. I think it had improved from that Q193 Jim McGovern: Is there any sign of people “no DSS” position, partly because rents have been moving from public sector housing to private high and it is a guaranteed rental income, but the housing? Government changes have made private landlords Keith Dryburgh: I do not think we have come across aware that it may not be quite as guaranteed as they many cases. I put in my submission one case of a thought it was. person who tried it and was turned down by all her local letting agencies because she was claiming Q198 Pamela Nash: Do you think part of that may housing benefit, but that is from only a limited number be the high number of people who are in work who of case studies. I do not think there has been a general are claiming housing benefit because of low income? shift. One of the anomalies that were mentioned last Keith Dryburgh: I think that is hidden from the week was that, if someone were to do that, it would coverage of this issue. I think 8% of those affected by be more expensive for the UK Government than if this are actually in work; that is thousands of people. they stayed where they were. We would also be concerned if a lot of vulnerable Q199 Pamela Nash: What percentage? people moved across to the private rented sector, Keith Dryburgh: It is 8%; that is from Scottish because we know that standards are not as high in the Government figures. They are mainly in low-paid, private rented sector. The majority of housing cases maybe part-time work. These are people who were we get at citizens advice bureaux are about the private affected last year by the Government’s working tax rented sector and the standards there. We are also credit changes. In one case I have seen recently, the concerned that people would be moving from a pretty woman was working 16 hours a week and would have stable, secure tenancy to an unsecured tenancy, where got working tax credit, but now she does not. She they could literally lose their home within a matter of cannot increase her hours and is affected by the cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG02 Source: /MILES/PKU/INPUT/035419/035419_o002_michelle_130618 CORRECTED Final.xml
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18 June 2013 Keith Dryburgh bedroom tax as well. A lot of people in low-paid work across to the private rented sector. It is very much are affected by this. people signing up for house exchanges on the That shows another issue that I wanted to discuss— websites, on waiting lists and so on. That may come; the multiplicity of issues. A lot of these people are when people struggle to get somewhere in social affected by a lot of the benefit changes. There are housing, they may start to look at the private rented 70,000 to 80,000 households with a disabled person. sector. A number of them are claiming ESA, incapacity benefit or disability living allowance and will be Q203 Graeme Morrice: Especially when there is a reassessed for ESA and for PIP. Conceivably, they could be affected by the bedroom tax, lose DLA and diminishing resource when it comes to social housing lose incapacity benefit, so there are a lot of disabled and an increasing supply of private sector housing. people who could lose on multiple occasions. Keith Dryburgh: Absolutely.
Q200 Pamela Nash: Finally—you touched on this in Q204 Mr Reid: We talked earlier about some your answer to Jim about the housing benefit cost for exceptional cases, such as people who are disabled private sector tenants—figures we have from the with special adaptations that have been made in their Scottish Federation of Housing Associations indicate house. The Government’s response to cases like that that housing benefit costs for tenants of private is always that that is what discretionary housing landlords have gone up by 153% in 10 years, payments are for. What is your response to that? compared with just 21% for those with registered Keith Dryburgh: As I said before, there is certainly social landlords and in council houses. Is that a figure not enough DHP funding to go round to help all the you would recognise in your experience? We are people who are disabled and at whom the DHP talking about comparing the costs. I have an example funding is aimed. Our case evidence is that most in my constituency. Someone told me that a private people have applied for DHPs. We are not yet getting sector two-bedroom property, for instance, costs quite the outcome of that, but we expect in the near future significantly more than a one-bedroom council house. to start getting people back who are not getting DHPs. Are there pockets of that throughout Scotland, or are We will then have a good evidence base that we can you just seeing that private sector costs are much, pass on to the Committee of the kinds of people who much higher across the board? are not getting DHPs and support and whether that Keith Dryburgh: Actually, my comment was based on includes people with supported housing, adaptations the SFHA statistics, so I was going from them. We do and so on. not tend to get too much evidence on the cost of private renting; we get more issues on the problems involved with it. It is a much less secure and much Q205 Mr Reid: As well as the ring-fenced allocation more problematic sector than social housing. I that the Treasury gives to local councils for DHP, they suppose that our concern is not the rental cost but has are also allowed to put in some of their own money— more to do with the insecurity that moving across to up to 150% more, I think. Are you finding that the private rented sector would mean for a number councils are doing that? of tenants. Keith Dryburgh: We have not really been in touch with councils regarding this, so we are not sure how Q201 Pamela Nash: Fair enough, but is that many are doing it. It will be interesting to see how something that Citizens Advice will now look out for, many people come back having not received DHPs; because it will cause a problem directly related to the there may be a good way of finding out from that. bedroom tax? We would, of course, welcome it if local authorities Keith Dryburgh: If it came through the case studies, increased the fund, but that raises the issue of where which it is not doing at the moment—the private they should cut; they have decreasing income, so they rented sector has not been mentioned very much in would have to cut somewhere. We can understand the the case studies—we would raise it. pressures that are on local authorities at the moment.
Q202 Graeme Morrice: If this move of introducing Q206 Mr Reid: Are you aware that in the last the bedroom tax is an attempt by the Government to financial year Edinburgh handed back £162,000 and save money, would you question the financial sense Fife handed back £110,000 to the Treasury, and that of it if we are going to see a number of people move out of public sector housing that is too big for them, other Scottish councils handed back smaller amounts where they would be eligible for the bedroom tax, and of DHP that they did not spend? into private rented accommodation—obviously into Keith Dryburgh: I was not aware of that, although I smaller properties—where the rent is substantially know that recently The Independent or The higher and their housing benefit or, in the case of Guardian—I cannot remember which—had an article private tenants, the local housing allowance, will be that showed the explosion in DHP applications this substantially more? They would be eligible for 100% year. Perhaps last year there just was not the demand and therefore, in turn, it will cost the Government a for it, but certainly this year the demand has gone lot more. Would you question the financial sense of through the roof. North Lanarkshire had the highest this in the long term? increase in applications in the whole of the UK and Keith Dryburgh: That is certainly an anomaly. From Glasgow had the highest number, so I do not think our cases, it does not seem that people want to move they will be handing it back this year. cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG02 Source: /MILES/PKU/INPUT/035419/035419_o002_michelle_130618 CORRECTED Final.xml
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18 June 2013 Keith Dryburgh
Q207 Mr Reid: Do you feel that in past years Keith Dryburgh: That is a good point. We will have to discretionary housing payments have been enough to monitor the cases to see exactly who is not getting it. cover special cases? Keith Dryburgh: It is a relatively new thing; I think Q214 Mr Reid: In your experience, have councils it covered mainly the LHA changes, which affected a adopted policies on who should get DHP and who much smaller number of people. For example, the should not? shared accommodation rate affected only a few Keith Dryburgh: I imagine it will be 32 local thousand people in Scotland, whereas this affects authorities and 32 different policies. One of the 105,000 households. It is a big step change in the problems so far is that there is no uniform guidance number of people who will have to make applications. on exactly who should get it, so somebody from one local authority may get it but somebody from the next Q208 Mr Reid: Are you really telling us that you local authority may not, even though the have not yet had a chance to analyse the outcome of circumstances are similar. That is something to applications for DHP? monitor. Keith Dryburgh: Yes. I think there is a big backlog. As I said, Glasgow has had 5,500 applications in a Q215 Mr Reid: Do you find that tenants who are month, so people are having to wait now. We will start being told by their landlords that they will have to pay getting the evidence— more in rent because of the bedroom tax are aware that there are DHPs to apply for? Q209 Mr Reid: It is now about 10 weeks since the Keith Dryburgh: It is hard to tell from our case changes came in. Are you aware of cases where studies. The outcome of the advice is often that people people have applied and there has been an outcome? want to make an application, but I do not know Keith Dryburgh: Yes. The majority of those cases are whether they came wanting to make it or whether they of people coming back because they did not get it— were advised that that was possible. they were refused. We have not seen many people actually getting it, but then again, maybe they would Q216 Mr Reid: Do councils or housing associations not come back to review it. write to tenants who are in this position advising them of the council’s policy regarding DHPs? Q210 Mr Reid: But have you analysed the reasons Keith Dryburgh: Housing associations and local why people have been told by the council that they authorities seem quite proactive about trying to see will not get DHP? people in person, to see whether they understand, have opened the letters and so on. That approach has been Keith Dryburgh: It is probably too early to say quite good. confidently which people are getting it and which Chair: We will obviously want to follow up some people are not. Once we are a few months into it, we stuff about the exemptions and so on. It would be can start to map up the people who are getting it and quite helpful if you could give us any additional the people who are not. SFHA did a good study information you come across or that you think would recently—it was published last month—that showed be helpful to the Committee in its work. the reasons why people were getting it, which was quite interesting. I have not got that to hand, but you Q217 Pamela Nash: We have spoken about the can get it from SFHA. funding that the Scottish Government put forward for advice services in January. I am not clear whether that Q211 Mr Reid: In your own experience, have you is the block grant money that they were allocated noted any particular pattern of cases where, for anyway, which was held back until this point, or example, people do get DHP? whether it is additional funding. I suppose I am asking Keith Dryburgh: The majority of cases we have seen you that because you are here, but I do not really are of people who have applied and have not heard or expect you to know. who have been rejected for it. I suppose that our Keith Dryburgh: You will have to check with the evidence is probably better for the types of people Scottish Government, but I believe that at least parts who are not getting it at the moment. of it were the block funding.
Q212 Mr Reid: Is there any particular category that Q218 Pamela Nash: I am checking as we speak. Is is being rejected and that you think should be there anything else that you think the Scottish awarded it? Government could or should be doing at the moment Keith Dryburgh: It is important that people with to help Scottish citizens? adaptations and so on get DHPs, but it is probably Keith Dryburgh: The Scottish Government’s even more important that they are exempted from the approach is to be welcomed in a lot of ways. They bedroom tax altogether. It is probably more important have mitigated some of the impact. For example, they for the UK Government to recognise that people— have put more funding into the Scottish welfare fund to make up for the cut the funding came with. Q213 Mr Reid: Yes, but how do you put something like “significant adaptations” into legislation? Surely Q219 Pamela Nash: To be clear, I am talking just it is better to give a council discretion in each about the bedroom tax—not about council tax benefit particular case. How do you define in legislation what or any other welfare reform. I appreciate what you are is a significant adaptation? saying, but what are they doing on the bedroom tax? cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG02 Source: /MILES/PKU/INPUT/035419/035419_o002_michelle_130618 CORRECTED Final.xml
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18 June 2013 Keith Dryburgh
Keith Dryburgh: Providing funding for advice help the same people who are being affected by the agencies is certainly to be welcomed. It is important bedroom tax. that there is capacity within the advice sector in Scotland to make sure that everybody who requires Q223 Pamela Nash: I appreciate that you are not help gets that help, and that there is the capacity here to speak for the Scottish Government and I will within housing associations and so on to provide face- not ask you to do that. The difference is that council to-face support. We welcome that funding absolutely. tax benefit was devolved to the Scottish Government; We are part of the Scottish Government’s Housing that was why they had to do something. I do not Benefit Reform Stakeholder Advisory Group—it is believe there is anything in legislation at the moment hard to remember that one—which they have been that would prevent them from topping up running for the last two years, since the reforms were discretionary housing payment funds for local mooted, to come up with mitigation ideas. They also government, for instance. have a partnership agreement with COSLA on how I want to ask you about the no evictions stance that they can work together for mitigation, so they have campaigners have been asking for in Scotland, which certainly been trying to address it. We welcome the some local authorities are starting to talk about and steps they are taking to provide funding to advice take on. What is Citizens Advice Scotland’s view on services. no evictions? Keith Dryburgh: I understand that no evictions is no Q220 Chair: Can I clarify that there is no reason why evictions if the person is communicating and taking the Scottish Government could not put more money all the actions they can to try to reduce spending— into this area—not just for advice centres, but to basically, to help themselves—so it is not a strict no provide financial support to social housing landlords? evictions policy. We certainly support that kind of Keith Dryburgh: It is a complicated area, since the approach and will help clients to meet that. Where a Scotland Act prohibits the Scottish Government from client is shown to be doing that, we would not expect providing benefits as such. There are probably ways a local authority or housing association to evict. they can mitigate it in terms of money, but £50 million is a big impact to mitigate. Q224 Pamela Nash: So Citizens Advice’s view is Chair: That is right, but ultimately it comes down to that the tenant should not be evicted if they are a question of priorities, doesn’t it? engaging with the local authority. Keith Dryburgh: Yes—if they are applying for Q221 Mr Reid: Some councils have already houses, making every effort to reduce spending and committed additional funding to mitigate the worst so on. effects. Keith Dryburgh: The Scottish Government’s line is Q225 Chair: Surely that is the position at the that they would abolish the bedroom tax on moment for most social landlords—they do not evict independence. I guess that tells you their approach to if the tenant is engaging with them and trying to find it, but I do not know the specifics of whether they can a solution. The no evictions policy of which we have actually put in money towards it at the moment, given heard from some local authorities is actually no that they are not allowed to give benefits. different from the policy that they have anyway. Is that correct? Q222 Chair: That is right, but I am old enough to Keith Dryburgh: Housing associations have not taken remember Thatcher, which you may not be. I the same kind of stand, but they certainly believe that remember that, even though Labour councils at the that is the kind of policy they would follow anyway. time were in favour of scrapping some of those I guess it is about the message they do not want to proposals, they did not simply sit back; they did as send out to their tenants. We would certainly expect much as they could to mitigate the impact. I remember all local authorities and housing associations to follow what the social work department at Strathclyde did a similar kind of line. during the miners’ strike to try to help those workers who were in difficulty. We are struggling a bit to Q226 Jim McGovern: You say you would help. understand why more is not being done by the What sort of help would that consist of? Scottish Government when, according to the evidence Keith Dryburgh: The CAB. we heard last week, they clearly have the powers, as Jim McGovern: Yes. we understand it. Has CAB made concrete proposals Keith Dryburgh: I spoke to a manager the other day. to the Scottish Government on what additional I think there is the perception that all you can do is spending they should undertake in order to mitigate help them apply for DHPs, but she explained that the effect of this? there are a lot of different things that you can do. Keith Dryburgh: It is important to look at welfare reforms as a whole. It is easy to take one element and Q227 Jim McGovern: If someone says, “I can’t look at how we are mitigating that, but for the afford to pay this—I am going to be evicted,” how do ordinary person, if they are affected by three of them, you help? it does not really matter how one is being mitigated if Keith Dryburgh: There are things like income the other two are going to get you as well. So we maximisation. welcome the wider approach they have taken. It is important that there is funding for the Scottish welfare Q228 Jim McGovern: I am sorry, but I do not know fund and the council tax reduction, because that will what that means. cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG02 Source: /MILES/PKU/INPUT/035419/035419_o002_michelle_130618 CORRECTED Final.xml
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18 June 2013 Keith Dryburgh
Keith Dryburgh: Making sure they are claiming the Keith Dryburgh: I am not, but I have spoken to local benefits to which they are entitled. There are an authority housing representatives and they are amazing number of people— unhappy when they hear in the news that there are £x million in DHP, so it will all be fine, because they Q229 Jim McGovern: If they are, and that still does know that most of it is going to London and other not meet the bill, how do you help them? places. They certainly had a feeling that they did not Keith Dryburgh: A lot of them have different kinds have enough. I think Glasgow said that it would run of debts; that is why they cannot make the payments. out after five weeks if it gave everybody one. There It is about negotiating with creditors and making sure is a prevailing feeling that it is not enough. they are paying priority debts; a lot of people do not realise that council tax is a priority debt and the Q234 Chair: We will pursue the question of the Provident is not. So it is also about making sure they fairness of the allocation and whether there is some are paying the right people to stay in their homes. method, as it were, that can be identified behind the way in which the money has been allocated. It Q230 Jim McGovern: Everything they have to pay certainly does not look to be fair at the moment, but will still have to be paid. There will not be any obviously there may be a basis for it that we are not financial help—there will just be advice. aware of. Keith Dryburgh: I guess there are a lot of things you Keith Dryburgh: Certainly, with Glasgow having the can do around that to make sure the person is in the highest number of applications but not the highest budget, there is a clear mismatch there. best position to be able to pay their rent. Chair: Yes. I did not intend any particular disrespect to Ealing, but, as far as I am aware, Ealing has a much Q231 Pamela Nash: We are talking here about the smaller population than Glasgow. No doubt we will UK Government, the Scottish Government and local pursue that with the Minister. authorities. Is there any way you think they could be Jim McGovern: Looking at the Dundee figure, the working together better on the bedroom tax? Are there Government contribution is £311,904, and the overall any gaps that you see that should be filled? It could be limit seems to be £779,760, but at the top the heading two of the above—not necessarily all three together. it says “(2.5x)”. If someone in this room put the paper Keith Dryburgh: It is a difficult area. Obviously together, can they explain it? housing is devolved and benefits are reserved. In this Chair: You are referring to Annex B. Annex A is case, certainly, they are rubbing together and creating something that came from the Scottish Government, friction. With the independence debate, I guess it is which we all have difficulty understanding. Annex B difficult to see them working together as closely as is the one where we will try to clarify the figures. they might be; I will probably steer away from it in Jim McGovern: Where did we get this from? terms of today. There is certainly more that can be Chair: We got it from our trusty staff. done to make sure that it does not go against the Jim McGovern: Okay, so can one of the trusty staff housing policy in Scotland that has developed through explain it then? the last 20 or 30 years, with flexible housing. It is Chair: I think the buck stops with you. important that the kinds of steps that local authorities Jim McGovern: A note is being passed from person have taken to improve their housing stock and so on to person. are not sacrificed for this benefit policy. Chair: The DWP gave us this. It is a list of all the local authorities and the contributions they have. I am Q232 Pamela Nash: That was interesting. I will not sorry—I did not realise that Keith Dryburgh had not ask you for your view on independence—that is seen this. It gives the Government contribution to that another inquiry—but you mentioned the fact that the payment and the overall limit of two and a half times debate is taking place at the moment at the same time that; it is just a simple multiplication. It is the as the bedroom tax. Do you think that is having an allocation of the discretionary housing payments. impact on how people are reacting—in particular, on Jim McGovern: It looks simple, but I do not have a how the Scottish Government may be interacting with higher in arithmetic. What does it mean? the UK Government, or reacting to this situation? Chair: In each case, the Government contribution is Keith Dryburgh: I will try to steer clear of this, but how much the Government are paying to individual benefits are certainly an issue in both policy debate local authorities for them to use in the discretionary and the independence debate. I think the bedroom tax housing payments. Since they can add 150% to that, has become part of both debates. the second column—the overall limit—is how much the local authority can spend on it. As Alan touched Q233 Chair: That is very diplomatic, if I may say so. on earlier, in response to a parliamentary question Can I come back slightly to the question of from him, we got the answers on how much they had discretionary housing payments and the amount of been allocated last year and how much they had money that has been allocated to them? We have had actually spent, showing that some local authorities in some of the figures. We will obviously pursue this, Scotland had not spent up to their allocation. The because I see that Ealing gets more than Glasgow and figures show how much each individual local that Enfield gets two and a half times as much as authority could pay out in DHP. As I understand it, Edinburgh; Derby and Doncaster both get more than that is the maximum that they are allowed to pay, Dundee. Are you aware of how these figures have which obviously falls far short of the number of been arrived at? requests that they will have. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG02 Source: /MILES/PKU/INPUT/035419/035419_o002_michelle_130618 CORRECTED Final.xml
Ev 34 Scottish Affairs Committee: Evidence
18 June 2013 Keith Dryburgh
Jim McGovern: The first one—for Aberdeen—is half from the nearest available accommodation. So it is a million pounds. Is that times two and a half? an issue all over the country. I would hope that local Chair: Yes. authorities are passing on best practice between them. Jim McGovern: Why doesn’t it just give the figure? Why does it say that figure times two and a half? Q238 Sir James Paice: But you are not aware of Chair: The Government give it £226,000. If what that may be. Aberdeen wishes to top it up with another 150% of its Keith Dryburgh: Not on the rural aspect. I have seen own money, as a local authority, it will be able to a briefing on it from the Highland Council that really spend the £566,000. showed what the impact on their tenants is and where Jim McGovern: Times two and a half. in the highlands the particular problem points would Chair: No, that is times two and a half. The second be. figure is two and a half times the first figure. Jim McGovern: I see. Q239 Chair: In terms of following up best practice, Chair: The main issue for us is obviously that these obviously the Scottish Association of Citizens Advice amounts are inadequate. Secondly, we are not entirely Bureaux will deal with Scotland, but presumably you clear about how they have been allocated between have relationships with bureaux in England, Wales individual local authorities and we are seeking some and Northern Ireland. We will be contacting them as clarification from those who made them. It is a bit like well, but it would be helpful if you could draw to our the local government finance allocation; you are never attention any examples of good practice to ameliorate entirely clear how these things have been arrived at. the impact of which you are aware and that we might I turn back to the questions. We wanted Jim to pick not otherwise pick up. up the next one. Keith Dryburgh: Absolutely. Chair: Again, particularly when we were discussing Q235 Sir James Paice: I am conscious that there implementation earlier, it was clear that there is could be a vote in five minutes, Chair. I want to ask always a degree of discretion—certainly on the about the exchange of best practice, really. discretionary payments, by definition. Those are Presumably the CAB, whether in Scotland or in things that we might want to reflect in any report that England, have an interchange of information right we produce. Jim will pick up question 12. through. Do you know what is going on in local authorities in terms of exchange of best practice on Q240 Jim McGovern: I imagine that Citizens the best way of minimising evictions, helping—well, Advice Scotland would have a view on this; although right across the piece? Are you aware of what is going obviously you cannot drive a policy, you may be able on? Can you help us? to influence it. What would you see as a way out of Keith Dryburgh: I know COSLA and the Scottish our current situation? What might be the solution? Government have a partnership agreement to make Would it be more social housing? sure that best practice is passed on to local authorities. Keith Dryburgh: In the long term, social housing COSLA has been heavily involved in making sure that providers will have to adjust their house-building it is given proper guidance and that there is that policies and look at the types of housing that they exchange of best practice. COSLA would probably build, although I understand there is reticence to build provide the best answer on that. more one-bedroom houses, which would be going against the grain of housing policies in the past. I have Q236 Sir James Paice: So COSLA is doing it. offered to send you the policy solutions that we are Keith Dryburgh: I know there has been a lot of work suggesting. We want more exemptions for disabled and that the Chartered Institute of Housing has been children and disabled households, and to make sure involved, with Government funding, to do something that households are not penalised when clearly there similar. is no available housing for them.
Q237 Sir James Paice: What about the particular Q241 Jim McGovern: So, to quote an old trade issues of rural areas? Obviously Scotland has a lot of union banner, it should be homes for the homeless, those, but so do parts of England. That is where your and that will provide work for the workless. point about lack of supply of alternative Keith Dryburgh: I am not entirely sure— accommodation would be particularly acute. Do you Jim McGovern: Just agree. know whether any particular exchange of information Chair: The vote is on. When we come back, we will is happening in rural areas, or if there is any good want to draw matters together and, in particular, give practice we should be aware of? you the opportunity to make any points that you think Keith Dryburgh: This is a really important point for we have not raised with you already. We will be back Scotland. Scotland differs quite a lot from the rest of as quickly as we can. We will start as soon as we have the UK in that we have a lot of rural and remote areas. a quorum, if that is acceptable to people. I think they will be developing good practice. A Sitting suspended for a Division in the House. number of local authorities have a lot of rural areas, On resuming— so they will be passing on that best practice among them. I saw a case quite recently. It was in South Q242 Chair: We are sorry for that interruption. We Lanarkshire, where there are a lot of built-up areas, want particularly to make a couple of points. First, it but it concerned a person who lives in a village in the would undoubtedly be helpful if you were able to south of South Lanarkshire and she is 50 miles away come back to us with additional information along the cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG02 Source: /MILES/PKU/INPUT/035419/035419_o002_michelle_130618 CORRECTED Final.xml
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18 June 2013 Keith Dryburgh lines that we have indicated about whether or not the to live in their home any more or, at least, that they deficiencies that you have identified flow from the have to pay more to stay in it. principle, the design or the implementation, and whether or not there are actual proposals that can be Q247 Lindsay Roy: Are you keeping track of any made that would ameliorate or mitigate some of the allegations like that that have been made by members difficulties. Then the Government will have to make of the public who have come to see you? a choice about whether or not they want to do that, Keith Dryburgh: We have certainly had lots of but we want to put it forward. people. We have a feedback system; bureaux feed the It would also be helpful if you were able to come back most important cases back to us, and our evidence is to us on a regular basis, as you get updates. We have based on that. A number of them start, “The client found the written evidence that you have provided us came in distressed and crying.” A number of people with very helpful and have not wanted to go over in were upset, which is bound to impact on them. great detail the material you have already given us in writing, but that will be incorporated into any reports Q248 Lindsay Roy: So that evidence is available. we produce. If you can continue to do that, that would Keith Dryburgh: Yes, absolutely. be helpful. Lindsay Roy: That is very helpful. If we could get Keith Dryburgh: Absolutely. that information, it would be very useful. Chair: I said earlier that at the end of the questions we would give you the opportunity to give us the Q249 Chair: I should mention that we are thinking answers you had prepared to questions that we have of producing a report by the time that Parliament not asked, if there are any. I am sorry—Lindsay wants breaks up, which is 18 July. We would have to agree to come in first. it by then, even though it might be published slightly later, but we would collect additional evidence over Q243 Lindsay Roy: There are a couple of things. I the summer with a view to having a look at matters have heard anecdotal evidence that a number of again in October. Initially, we are working towards people who have paid the bedroom tax have then been that mid-July sort of time. Do you have any forced to go to food banks for food. Have you any observations that you want to make about things we evidence of that? have not asked you about? Keith Dryburgh: There are actually two cases in our Keith Dryburgh: I just want to emphasise the Scottish submission that refer to that. They relate to people aspects of the impact. We have talked about rurality, who were told, “You have to pay £60 or whatever for and I think it is important to bear that in mind. The your rent this month,” who have paid it straight away disability statistics are also interesting; 79% of and got to the stage where they were five days or so households in Scotland that are affected have a away from their benefits and had nothing. So we have disabled person, but it is only 63% across the whole had some people. of GB, so that is a particular Scottish issue. About 69% of those seeking advice at citizens advice Q244 Lindsay Roy: I noticed two case studies, but bureaux are disabled or describe themselves as such, do you have any wider evidence? so the disability angle is really important, particularly Keith Dryburgh: There has certainly been a huge for Scotland. increase in the number of clients we see whom we The last point is to emphasise that it cannot be looked have to refer on to food banks. at purely in isolation from other issues. The person who is affected by ESA or by PIP cannot choose Q245 Lindsay Roy: Do you keep a note of the which benefits they are affected by, so they get number of people you refer to food banks? affected by all of them. That is something that is Keith Dryburgh: We are starting to, as of April, but missed. You can say it is 105,000 for this and 200,000 it is very much developing. It is something we can for that, but 60,000 of them may be affected by both, give you at a later date. so it is really important to bear in mind that to some Lindsay Roy: That would be very helpful. people this is just one more change. It may be the Keith Dryburgh: We certainly have plenty of case worst one, but they have been affected by one before studies. I did an analysis of 100 clients we had to refer and will be affected by one in the future. on to food banks. For about two thirds of them, it was related to the benefits system. Probably about half of Q250 Lindsay Roy: This is going back over old them were to do with benefit delays and another half ground, but can you give us examples of exemptions were to do with benefit sanctions. in relation to young people as opposed to more mature adults? My impression is that youngsters are Q246 Lindsay Roy: Similarly, have there been issues protected—they are exempt—but many members of around health in relation to the bedroom tax? Are the adult population are not. Would that be a true there health issues that have emanated from the reflection of your experience so far? pressure to pay this additional amount? Keith Dryburgh: There is a lack of clarity about Keith Dryburgh: I think it is inevitable that there will young people. The Gorry case showed that young be. We cannot underestimate the stress that this people’s human rights are affected if they have a causes. It is not the benefit change that causes the disability and they do have to share. The Government biggest financial harm or affects the highest number did not appeal that but, equally, they did not write it of people, but it is the one that goes into somebody’s into regulations, so there is a lack of clarity. We still home and tells them that perhaps they do not deserve get issues where a person comes in and says, “I have cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG02 Source: /MILES/PKU/INPUT/035419/035419_o002_michelle_130618 CORRECTED Final.xml
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18 June 2013 Keith Dryburgh two children with x disability. They are not supposed Have they focused on disabled young people, or are to share, because the doctor says so. The local you not aware of that? authority has given us two rooms, so they do not have Keith Dryburgh: I think the DHP funding came with to share, but I am being told that I am under- strings—that you were supposed to spend x amount occupying.” I think there needs to be greater clarity or it was earmarked for disabled people. I think the from the Government as to whether they are actually Government have given some guidance on who exempt, because they are not officially so. should get it. I am not sure how that is interpreted at There are very few adults who are exempt. Unless you local authority level, but certain amounts are have a full-time overnight carer, you will not be earmarked for people with disabilities and so on. exempt if you have a disability. There are some with Lindsay Roy: Thank you. That is very helpful. part-time family carers who are not exempt. Q254 Chair: Do you have any final points? Q251 Lindsay Roy: To put it in a nutshell, further Keith Dryburgh: No, that is it. clarity is required. Chair: Thank you very much for coming along. Keith Dryburgh: Yes, absolutely. Thank you, in particular, for the written evidence that CAB provided, which we have found very helpful— Q252 Lindsay Roy: You have been seeking that and, particularly the case studies. Hopefully we will speak I suspect, this Committee will do so as well. to you or hear from you again once you have more Keith Dryburgh: Yes, especially in terms of young information. people with disabilities.
Q253 Lindsay Roy: Are you aware of the priorities given by councils in their discretionary payments? cobber Pack: U PL: COE1 [SO] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG03 Source: /MILES/PKU/INPUT/035419/035419_o003_michelle_130716 Corrected Final.xml
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Tuesday 16 July 2013
Members present: Mr Ian Davidson (Chair)
Mike Crockart Sir James Paice Jim McGovern Lindsay Roy ______
Examination of Witness
Witness: Dave Moxham, Deputy General Secretary, Scottish Trades Union Congress, gave evidence.
Q255 Chair: Welcome to the Committee. As you First Minister in June about the bedroom tax. What know, we are investigating the impact of the bedroom did you ask the Scottish Government to do? tax in Scotland. We are particularly interested in Dave Moxham: We asked them very specifically to efforts that the Scottish Government, local authorities, take action with respect to the funding of local social housing groups or other organisations could authorities in order to enable them to make full use of make to mitigate the effects in any way. the flexibility that is provided for them within DWP Could you start by introducing yourself for the record legislation and guidance on discretionary housing and telling us what position you have? Could you also payments. We were fairly specific in our letter that we tell us what this has got to do with you, in the sense believed the approximately £10 million that has been that the STUC is there as an organisation of unions, made available in Scotland this year had the potential rather than representing tenants? to be enhanced to the tune of an extra £15 million— Dave Moxham: I am happy to do that. My name is that is to say, £25 million in total—and that, while not Dave Moxham. I am deputy general secretary at the completely mitigating the impact of the bedroom tax, STUC, so I have a wide range of policy this would be a serious chunk of money that could responsibilities, as you would expect. It has to be a have an effect on many, many of the affected tenants matter of knowledge, at least to some members, that and, of course, the housing providers themselves. the STUC flatters itself that it takes an interest in I might add that we also support a couple of other issues that go beyond the workplace and, in particular, initiatives I am happy to speak to you about later with sees itself as one of Scotland’s important civic voices. respect to the potential to change the law in When we come to an issue such as the bedroom tax, Scotland—section 16 of the Housing (Scotland) Act obviously we have a concern in relation to our own 2001—to allow housing debt to be treated as ordinary members—housing officers and the like—who in debt and, therefore, mitigate evictions. We also many cases will be implementing aspects of the support Shelter’s call for the Scottish Government to bedroom tax, along with other welfare changes, but provide additional support for housing providers. we also take a wider view on the impact of the However, as you suggest, the key part of the letter that bedroom tax on Scottish society as a whole. If one we wrote to the Scottish Government two or three goes back to the community charge, aka the poll tax, weeks back related to discretionary housing payments. you will recall that the STUC did the same at that time, too. Q258 Lindsay Roy: Have you had a response yet? Dave Moxham: We had the response that I attempted Q256 Chair: Could I start by asking you what the to get through to the clerks last night. I believe it was STUC’s stance on the bedroom tax is? received on Friday, 11 July. Frankly, it was Dave Moxham: It probably will not come as any great disappointing. surprise to you that the STUC opposes the bedroom tax. There are a couple of reasons for that. The first, I Q259 Lindsay Roy: What have they done so far to suppose, is moral. We believe that, as evidence shows, mitigate the worst effects? What more do you think people’s home—their environment—is the most they could do specifically? important thing to them; survey after survey has Dave Moxham: A significant amount of money has indicated that. Taking an essentially fiscal approach to been provided for advice in Scotland. The Scottish trying to manage their housing is probably immoral, Government enhanced the amount of money available but it is certainly not practical. I am sure you will to advice agencies, principally citizens advice bureaux already have heard evidence from a range of housing but also local authority advice functions. That was providers that, on a practical basis, the policy is certainly welcome, but it was advice—not substantial unlikely to work in Scotland; there is simply not the support. You can advise people all you like, to be number of houses of suitable bedroom size available frank, but, if they have not got the money, they have in order to effect the change that the Government wish not got the money. So they have undertaken some to undertake. So, on both moral and practical grounds, measures. we think it is a poor policy. We were very clear in our letter that we recognised some of the financial constraints under which they Q257 Lindsay Roy: It will not be a surprise to you have currently been put. However, we were very to know that I also oppose the bedroom tax, but we explicit that, for what we consider to be a relatively have it and are here to discuss ways in which we can small amount of money, £15 million—although I mitigate the worst effects. The STUC wrote to the know everything is relative—we believe that real cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG03 Source: /MILES/PKU/INPUT/035419/035419_o003_michelle_130716 Corrected Final.xml
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16 July 2013 Dave Moxham mitigation could take place. The difference between Any piece of guidance that says that a local authority that and almost any other form of proposed action is the size of Glasgow could spend zero or £7 million that it actually removes the debt. Most of the other clearly has a fairly wide view of the discretion that is proposed actions with respect to evictions and other available to the local authority. So the discretion is things do not remove the debt from the individual but there—the guidance makes that clear. It must be just change the way in which the debt will be pursued, applied consistently, but many of the rules are up to whereas our proposal specifically suggests something the local authority. So, as a mechanism for use for that will help the individual. dealing with the problem that we are facing, it exists. I can go into some detail on what individual local Q260 Lindsay Roy: So this would avoid the debt authorities are doing. The problem for many of them burden and all the stress and anxiety that go with it. is that, frankly, they do not have the resource to use. Dave Moxham: It would. I do not know whether it would be helpful for me to explain briefly how the Q262 Lindsay Roy: Are you saying that the Scottish discussion re housing payment works, in my view, in Government could top up that funding? the way it is currently being implemented in Scotland. Dave Moxham: Absolutely, they could. You will note Lindsay Roy: That would be very helpful indeed. from the letter that was sent to us in the name of the Dave Moxham: Detailed guidance came out on 1 Minister, Margaret Burgess, that they refer to DHP as April from the DWP; that is a Government document. a reserved issue. It is, but, as everyone here will be It bears the reading, as it is actually a very lucid and aware, local authority funding is a devolved issue. The clear document. It makes very clear that the additional amount of money that the Scottish Government moneys that have been provided this year by the DWP, choose to give to a local authority is entirely up to which increased funding from the relatively small them. amount of about £30 million, I think, to £155 million, can be used—I think I quote exactly—“with a wide Q263 Lindsay Roy: Why do you think the Scottish degree of discretion” by local authorities. Within that Government are not topping up this funding? What is guidance it states that there are a number of priority the reasoning behind it? groups, if you like, that it directs local authorities Dave Moxham: One can take two views; I will towards helping. I will give you a couple of examples. exercise both of them for you. The first would be that, One is families where one of the young children might in the context of the very tight budget round and of have a significant birthday coming up. If a child is having to take other action—I have already spoken nine but will soon be 10, it suggests that local about the advice support that they have been authorities should prioritise those families. It also providing, but there is additional support that they suggests that local authorities should prioritise people have given in lieu of the 10% cut in council tax with caring needs. benefit—they simply do not think they can afford it. I am afraid to say that the other suspicion is that this is Q261 Chair: Could you clarify for the record what tied in in some way with the referendum debate. the significance of 10 is? Dave Moxham: Of 10 million? Q264 Lindsay Roy: It could be politically motivated. Chair: No, age 10. Dave Moxham: I have heard it aired and suggested, Dave Moxham: Yes. There are various different at least, that “Wait until 2016 and all will be better” formulations based upon the mixed sex of children, might be one of the motivating factors. I have no way the number of children and their relevant ages, so you of knowing which of those is the stronger of the two. can have a number of different significant birthdays. Obviously a significant birthday would be when Q265 Lindsay Roy: Would you like to say a bit more somebody was 15 and was going to become 16, about how local authorities have dealt with this, because a 16-year-old and a 14-year-old would be because there seems to have been a differential expected to have separate rooms. If one of two approach? children over 10 were a male and one were a female, Dave Moxham: We have a real postcode lottery they would be entitled to two separate rooms, developing. I am not one of those—and nor is my whereas, if they were the same sex, they would not. organisation—who suggest that, in all cases of policy, There are a number of different triggers that are made local authorities should act in exactly the same way; available, but that is the relevance of that. there is clearly differentiation. Maybe I could give a The DWP guidance is clear in two respects. It is clear couple of examples. I know the figures for the four that local authorities must use this money consistently, councils that are represented here, which may show and it does provide guidelines, but it is also very clear the difference. in its use of the term “wide discretion.” In a sense, As you may know, Mr Roy, your local authority, Fife, that is obvious, if you think about a local authority is making full use of discretionary housing such as Glasgow, which could spend zero. In previous payments—it is topping them up by 150%. The figure years, prior to the current benefit changes, some local eludes me, but something like £600,000 comes to authorities have actually returned some of their mind. In the case of Glasgow and Edinburgh, as far discretionary housing payment money to the DWP; as I am aware, there is currently no top-up taking they have not used it. Theoretically, Glasgow could place. In the case of Dundee, the top-up figure is 50% spend zero; it will not, but it could. It could also spend of the possible 150%, which is to say that about a £7 million. I will come on to the discretionary aspect third of the additional top-up is being used. You have of that in a minute. three major cities and the kingdom represented here, cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG03 Source: /MILES/PKU/INPUT/035419/035419_o003_michelle_130716 Corrected Final.xml
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16 July 2013 Dave Moxham and you have a complete disparity between the ways enormous postcode lottery. If you live in Glasgow, in which local authorities are currently using their Dundee or Fife as a tenant facing the bedroom tax, DHP. your situation is completely different in terms of the support you can expect through DHP. Q266 Lindsay Roy: But even with a complete top- up in Fife, it is not adequate to meet all the needs. Q271 Jim McGovern: At the risk of sounding very Dave Moxham: No. It is very difficult. If you look at parochial, it is worse in Dundee than it is in Fife, some of the local authority assessments, they differ in for example. terms of how much the full use would mitigate. It is Dave Moxham: Yes. A couple of weeks ago, COSLA probably fair to say that, if you think of a figure that did a bit of work in which it spoke to 30 of the local previously existed in Scotland of £2 million or £3 authorities. They are very basic figures; it may have million for DHP, which could potentially now be £25 more behind them that it is to publish. I think it spoke million, you have a sum of £22 million. The overall, to 30 of the local authorities. It found that 10 were top-line cost of the bedroom tax—all in, if nobody doing something and that six were using their total moves, if no rooms are redesignated and if nobody capacity. The others, frankly, are not doing anything pays—would be £52 million. The question, in a sense, at all. Dundee is in the middle, if you like, in that is, to what extent will some people move, some people respect. pay and, as I said, some rooms be redesignated? Therein lies a gap of probably, I would imagine, about Q272 Chair: Obviously those figures for Dundee are £10 million or £15 million across Scotland, even if quite worrying for a member from Dundee, because it DHP is used, but the difference would be fairly looks like Dundee city council is not doing as much significant, particularly for the worst-affected families, as, say, Fife council is. Surely the figures that you if it were properly implemented. have are not necessarily the final figures. Presumably, if Jim and others called on Dundee council to put in Q267 Lindsay Roy: But even in Fife there is not the more money and were able to demonstrate that there capacity to downsize for those who want to do so. were deserving cases, the council could still top it up. Dave Moxham: No. Local authorities and, to an Dave Moxham: I have not seen which councils are extent, the Scottish Government are still stuck affected by this. COSLA says that a number of between that rock and a hard place, but we bring the councils have made what you might call potential rock quite significantly closer to the hard place if we provision, which is to say that they might not—they make full use of DHP. might spend more. However, to my knowledge the majority of those that have committed—I have not Q268 Chair: If you are stuck between a rock and been through every single one; I do not think anybody hard place, you do not want them moved together has yet—have done it through formal council process, tightly, do you? which is to say that it has been part of a budget-setting Dave Moxham: I am sorry. I got my— process that they will spend 50%, for example. Chair: You got your direction of travel wrong. Chair: I see. Dave Moxham: It probably will not be the last Dave Moxham: There are formal council papers that metaphor that I get wrong today. Thanks for the I have accessed in respect of all of these things. They correction, Chair. are decisions; they do not say, “We have spent this so far, but we might have to spend some more down the Q269 Jim McGovern: Thanks very much for line.” I am not saying that these things cannot change, coming along. I am intrigued and, indeed, puzzled by but there is no indication that that is the case. the figures that you applied to Dundee there. Could Chair: Mike wanted to come in on this. you clarify that? Dave Moxham: I think I have a note of the exact Q273 Mike Crockart: It strikes me that it is figure for Dundee. Theoretically, Dundee could input staggering to have such a wide disparity between the an extra £450,000, which would match the £320,000- 30 you have spoken to. How do councils calculate odd or £330,000 that it gets from the DWP directly. It their potential liability to arrears? How do they plan is choosing to put in £150,000. forward for the next year on what they think they really need to put aside to deal with this? I come from Q270 Jim McGovern: From where would it access Edinburgh. You mentioned that some councils have this? From the Scottish Government? hung back on DHP in the past. Last year Edinburgh Dave Moxham: No, from its general funds. You have handed back £162,000. Now we find that it is not this real disparity between the fact that the largest topping up at all, despite the potential to top up about local authority, Glasgow, could spend a total of £7 £2 million. million, of which nearly £5 million would be its own Dave Moxham: That would seem right. money, and the fact that it is spending only £2 Mike Crockart: Yes, just over the £2 million million—so it is putting in nothing in addition. potential—and it is not putting any of that in. How Dundee is going into other areas of expenditure, if does it calculate? you like, to find this £150,000, but it is doing only a Dave Moxham: There is a bit of guesswork here, but third as much as Fife is. There will be loads and loads I think there are probably a number of factors. The of reasons for that relating to budgetary and other first thing to say is that I imagine the DHP granted pressures. I am not necessarily criticising local and the DHP limits are fairly rigorously identified and authorities for the choice they make, but it is an are based on DWP figures for overall housing benefit cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG03 Source: /MILES/PKU/INPUT/035419/035419_o003_michelle_130716 Corrected Final.xml
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16 July 2013 Dave Moxham spent. So the kind of baseline figure for how much the allocation, which is worth noting. I think the figure DWP thinks is a minimum that is appropriate and the they quote is 6.5% of the overall additional allocation, 150% addition thereafter is probably a fairly rigorous which does seem low. It does seem particularly with starting point. respect to the fact that it seems reasonably certain that There will be differences, which will be hard to 80% of Scottish tenants of affected households will divine, but I would imagine that the criteria would be have a disabled person in them. based on the number of disabled households, who are The reason I am hesitant to say that the Scottish more likely to qualify. We know that in Scotland 80% Government are right on that is that part of it, of of the houses affected have a disabled person in them, course, is related to house price, because 14% of as opposed to the UK average of 66%. There will a somebody’s rent is different from 14% of somebody factor relating to how many of the over-occupancies else’s. Not having access to the exact criteria that are are two-bedroom over-occupancies compared with used, I am hesitant to say that I think the allocation is one-bedroom over-occupancies. wrong. I am fairly certain that, however the formula Frankly—this is probably a fairly difficult but truthful has been applied, the base information that the DWP thing—it will also reflect the amount of resource that has—how much housing benefit it spends—will be as the council is putting into advertising and promoting accurate as any figure that you could expect. the availability of DHP. Historically, it has not been a widely understood mechanism for people to use. If Q276 Sir James Paice: Can we go back to the issue you go on to council websites, which increasingly are of what different local authorities are doing? You people’s first port of call, you will see a wide disparity referred earlier to a study that COSLA had done of 30 between how they are advertised and different sets of of them. Is there more that should be done to get all criteria. There will be only a couple of inaccuracies, the information on what every local authority is doing, and none of them will be inaccurately described, but how much of the maximum DHP—in other words, the there will certainly be very different levels of obvious allocation plus one and half times that—they are using accessibility for somebody who, frankly, may be a and how they are funding it? Who should be trying to punter who is just coming on to see whether they are pull all of this together so that we get a better picture accessible. There may be something about how clunky of what is happening? it is and how much friction there is in the system, Dave Moxham: There is an agreement between the because they will base it partly on how much demand Scottish Government and COSLA to monitor this. The they had in the past. If they were inaccessible in the initial set of figures came out as part of that. I said past, they will probably still be inaccessible now. So there was a study; actually it was a fairly brief bit of there are three or four different factors. work, but it was part of the study that was released two or three weeks ago. I am happy to provide the Q274 Mike Crockart: But statistics for the factors clerks with the reference to that. It showed that 22% that you talked about—the number of disabled of the allocation—that is to say, the base allocation— households and the level of under-occupancy—should had been used in the first two months, which is be available to councils or even the Scottish somewhat more than you would expect if it was Government to divine down and figure out what the spread evenly over the whole year, but there may be potential is. a number of factors influencing that. Dave Moxham: You are absolutely right, but there That was a long way round of saying yes, I agree that will be a difference again depending on whether that monitoring should take place. To be fair to the councils are dealing predominantly with direct Scottish Government and COSLA, it is worth noting housing provision or with one or more housing that their commitment to monitoring on, I think, a associations. The money is accessed from the two-monthly basis from now on is better than that of council—it is not devolved to housing associations. the Westminster Government, who, as I understand it, The information that councils have may differ have said that they do not have any plans just now to depending on their tenure or the nature of their monitor until the end of the year. housing provider. You will also find that some housing associations will be very good at promoting this and Q277 Sir James Paice: I want to double-check that supporting tenants to draw down DHP; others will not. I and, hopefully, the rest of the Committee have Chair: Obviously we are concerned about the understood it right. You have the DHP base allocation, allocations of DHP, so we are checking. We have just which is money from central Government. Then there seen that Enfield has two and half times the allocation is a possibility of spending up to one and half times of Edinburgh; I think that Derby and Doncaster have as much again. Your contention is that the Scottish more than Dundee. So we will look at the criteria that Government, if they chose to do so, could agree to are being used there and try to sort that out as quickly fund some or all of that top-up. as we can. Dave Moxham: Yes. If I thought I was wrong, which I did not, the letter that I have received from the Q275 Sir James Paice: I was just going to ask that Scottish Government confirms that. You can be question. From what you are saying, you and the absolutely certain that they would have told me if they STUC do not have any concerns or issues about the thought that they could not do it. distribution of the allocations. You have not uncovered any issues. Q278 Sir James Paice: I tend to agree with you. Dave Moxham: I recognise that the Scottish Turning to individual authorities and, perhaps even Government have had a complaint about the overall more, to the issue of the tenants themselves, who do cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG03 Source: /MILES/PKU/INPUT/035419/035419_o003_michelle_130716 Corrected Final.xml
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16 July 2013 Dave Moxham you feel is responsible—and is there more that should You said just now that it is not doing any top-up, but be done—in terms of publicising and promoting the earlier you referred to £7 million. It is £7 million if DHP options for individual tenants and, indeed, for Glasgow did the top-up, isn’t it? ensuring that every council is fully aware of its scope? Dave Moxham: I am sorry—I should have said that Dave Moxham: I think that councils should and could £7 million is its maximum capacity. From memory, it do better. Were the Scottish Government to do what I has £2.8 million or £2.9 million, and then whatever suggested they should do, that would probably be as 2.5 times that is. big a single hit in raising awareness as you could expect. It is strongly in the interests of housing Q281 Sir James Paice: That is what it is planning associations to do it, and I presume they are. There is to spend. a kind of misconception that must be infecting some Dave Moxham: Yes. I should not say that it is not local authorities. On their sites, in how they publicise spending anything—it is just not topping up. it, they are very clear that there is a form that must be filled out. Very often when you go on, the first thing Q282 Sir James Paice: The STUC recently took part you see is the form; there is no explanation or in a conference entitled “Scotland United Against the anything. It is very much a case of, “If you can find Bedroom Tax”. Apart from the political issues and the it, come and get it.” views of the STUC, which you enunciated at the If you read the DWP guidance, it clearly states that beginning of your contribution, did that conference that need not be the case. The DWP clearly states that discuss any practical issues around the challenges, a proactive approach can be taken. We understand some of the things we have talked about today or, from a range of housing providers, including councils, that they have been proactively contacting tenants to perhaps, other issues relating to how you can mitigate say, “Have you thought about moving? Have you the impact of the tax? thought about managing your money, blah, blah, Dave Moxham: Yes. As you would expect with a blah?” Put simply, in my view they could be far conference full of many angry people, there was a more proactive. great deal of heat to go with some sparkles of light, How do I know that they are not being proactive? but I have to say that the overall concentration at that There are no stats for that, but, if you spend as much event—I do not say this just because it is the STUC’s time as I have in the last two or three months issue of the day—really was on what the Scottish campaigning on this issue, you get contacted by a lot Government could do. of people. I can tell you that there are a large number It is fair to say that there are some people who, of individuals out there who are not aware that they because the STUC’s position does not potentially might be eligible for DHP. Without going into the cover every single penny of bedroom tax arrears, are details of their cases, I can be absolutely certain that strongly in favour of the position that has been put in a number of those cases they would get it almost forward by Shelter, which sees the potential for up to without a second thought. £52 million of underwriting of housing providers’ debt. That was also strongly put forward. I suppose Q279 Sir James Paice: Have you been able to draw they were the two main policy issues, along with the any conclusions from the work you have been doing issue of the Scottish Government adopting a no as to whether there is any distinction between those evictions policy; I would not mind talking about that local authorities where most, if not all, the social at some point, although I will answer your question housing is their own, and those where it is first. Those were the main policy issues that came out predominantly in housing associations? of it. Dave Moxham: I have not; the answer to that is no, I What is absolutely clear is that, in a large number think. As you may be aware, essentially Glasgow does of communities across Scotland now, we are seeing not directly provide any of its housing any more, and community activity that perhaps we have not seen for it does not provide additional DHP. Edinburgh is still a while, which is partly campaigning but is partly a major provider of its own housing, and it does not about self-reliance, at least in terms of advice. More either. I have not elicited an obvious link, which you and more community activists want to know about may be implying, based on its being in the interests, things such as discretionary housing payments. They you would imagine, of a local authority that directly want to know about how people can appeal their provides its housing essentially to rob Peter to pay decision. So there is quite a strong upswell of Paul. You spend the money on DHP to stop yourself community activity around those kinds of things, too. getting stuck in court dealing with debts. It might be that a pattern could be elicited with a full amount of Q283 Sir James Paice: As you might expect, coming information available, but I could not say that for from where I do, I want to take you up on something certain just now. [Interruption.] in relation to your attack on the policy itself. You used Chair: Somebody is about to get lines. the word “morality,” which is quite strong. I am not Sir James Paice: I am sorry about that—that was saying that you should not use it, but I would therefore mine. like to challenge you on the distinction we have or the Chair: “I must always switch my phone off in contrast we have established, which is that people who Committee meetings,” 500 times. are in private rented accommodation do not get housing benefit for extra rooms that they do not need. Q280 Sir James Paice: I know, I didn’t. I’m sorry Are you arguing that they should or that it was about that. I want to go back to the Glasgow figures. acceptable before the bedroom tax came in that you cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG03 Source: /MILES/PKU/INPUT/035419/035419_o003_michelle_130716 Corrected Final.xml
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16 July 2013 Dave Moxham should have a different benefit regime for publicly Q285 Chair: Could I come back to the question of owned housing as opposed to private accommodation? local authorities for the moment? You are suggesting Dave Moxham: No. To a fair degree, I agree with you that the Scottish Government should provide money that the only consistent approach is to say that those to local authorities to top up the DHP, yet the top-ups in private accommodation should also not that have taken place already have been done by the automatically be subject to the type of sanction that local authorities, which obviously have managed to we see. There is a slight difference, which is that find the money from within their own resources. What people who have ended up in social housing have evidence is there that those that have not topped up essentially been placed there by an authority, whether the money have not done so as a result of a lack of that is a local authority or a housing authority. They resources rather than a belief that there will be a lack have been told that that accommodation is suitable for of demand? them. In many cases, they will have spent many Dave Moxham: I could quote specifically from a weeks, months or years on waiting lists in order to number of local authority papers that say, “The get there. demand will be there, but we can’t afford it.” As I Don’t get me wrong—I am not suggesting that none said, I have not read all of them. I did take the opportunity to look specifically at some of the of these sacrifices are made by people in the private councils in areas that members represent. Argyll and sector, but they will have found themselves in that Bute, for instance, which is a relatively small situation. To be frank, having in many cases waited authority, is very explicit. It says, “This is going to for years and years, they will have expected that that cost us x. This is what we would need to spend. We place would be their home. That does exist in the can’t afford it.” Some of them are very explicit in private sector, but not to such a widespread degree as respect of that. I do not think that any of the local in the public sector. I half-agree with you that there authorities that COSLA has surveyed on this has come needs to be some consistency, and more consistency back with the view that it will not incur significant than there is, but I think there are some differences extra costs. in terms of how people relate to the differences in housing tenure. Q286 Chair: I should probably give an apology for Mr Reid, who is on the HS2 Bill Committee. You Q284 Sir James Paice: Finally from my perspective, researched his local authority, but unfortunately he can I turn to what else could be done in the medium was not able to be here. Graeme Morrice is on the to longer term, on the presumption that policy does same Bill Committee; if you researched his local not change and that the bedroom tax remains in place? authority, I am afraid he is not here either, because I fully understand that there are concerns about lack he was pulled off to something else. Presumably the of one-bedroom places, in particular, but maybe others Scottish Government say that they have no money as well, for people to downsize to. Is there something either. Why do you think that the Scottish more that could be done within Scotland, presumably Government, in particular, rather than the local by the Scottish Government, to increase the authority, ought to provide the money for the availability of such social housing so that the additional DHP? problems can be addressed? Dave Moxham: The best thing you can say about the Dave Moxham: They have done one thing that I think local authority settlements over the last couple of will have something of an effect and that the STUC years for Scotland, particularly for 2012–13, is that has long supported, which was to end the right to buy. they were adequate given the other pressures the Of course, the right to buy has always had the effect budget was under. COSLA has been relatively polite of enshrining and capturing in concrete some of the about it, but I really think that the settlements were misallocation or over-allocation of rooms in tight for local government and that most of the figures perpetuity, because, once you take a three-bedroom bear that out. I am talking about in comparison with house with one person in it out of the market, it is out other Departments, rather than across the board. So I for ever. In a sense, they have done one of those think it is particularly tight for them. things. I think that they are dealing with the large majority of the other social problems, if you like, that come forth We will always argue for more house building, which as a consequence of austerity. Essentially, they are could be of assistance, but these are fairly long-term also freezing their council tax by diktat from the answers, to be honest. My fear is that what we will Scottish Government—there is no real choice for them see is a combination of a large number of evictions in that—so they do not have an opportunity there. I next year—I think there will be only a small number know that for six or seven years now the STUC has of evictions this year—and a large number of people adopted the unpopular policy that serial council tax moving into fairly temporary and not particularly freezes are not a good idea, but we have at least been suitable private sector accommodation, which to some consistent on it. extent, at least, will then affect the private sector I think the year-on-year decision that people who do market as well. I really think that we are talking about pay the council tax should have it frozen contrasts what can be done in the next couple of years. To be fairly strongly with the current Scottish Government honest with you, I believe that in a couple of years’ inaction on the bedroom tax. Remember that many of time, whoever is in government, the nature of this the people who are affected by the bedroom tax are policy and, frankly, its failure to achieve even its own precisely the people who are not assisted by the targets will become apparent. council tax freeze, because in many cases they will cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG03 Source: /MILES/PKU/INPUT/035419/035419_o003_michelle_130716 Corrected Final.xml
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16 July 2013 Dave Moxham not be paying it. They will be paying just the water people to have a spare room, we should subsidise charge, and the water charge is the only bit that is not everybody to have a spare room. To be frank, that protected by the council tax freeze. That is a rather seems to be quite a daft argument, given that what we long way round of saying that I believe that, in the are trying to do is spend less money across the piece tight financial situation, the Scottish Government have in Government. more flexibility than local authorities have to find the Jim McGovern: He is showing us what the money. evidence is. Mike Crockart: That is not an argument for saying Q287 Chair: That is the point I wanted to clarify— everybody should get extra money for a spare room. that the STUC is of the view that the Scottish Jim McGovern: If that is what you are talking Government have a greater degree of flexibility about—a spare room. available to them than the local authorities have. Dave Moxham: Yes. Q290 Mike Crockart: That is not what I am saying. Moving on, before I talk a little more about the Q288 Chair: I was at the STUC conference you response from local authorities more generally, referred to earlier. I appreciate that there were a lot of previously you said that in the ring-round that you people there with quotas of newspapers to sell to one did, you found that there were six local authorities another, and then to gymnasts whom they were that were using the full top-up. pursuing after the meeting, but can I clarify whether Dave Moxham: That was COSLA’s information, but normal people, as it were—campaigners—understood yes. this distinction between the local authority paying the top-up and the Scottish Government paying the top- Q291 Mike Crockart: I want to try to figure out why up? In your view, were they clear about whom they some local authorities feel able to respond and others saw as being responsible for it? do not, and whether the responsibility lies with local Dave Moxham: I think they were. We had local authorities or more with the Scottish Government. In authority representatives there; at least, we had the general, are those smaller local authorities with less housing convenor of the city of Edinburgh council, as exposure? well as politicians from various parties there. There Dave Moxham: can be no doubt in my mind that the majority of the I can tell you. COSLA says there are people at the conference identified the Scottish six. To be fair, I have also found six, but I have not Government as the people who should be taking more looked at all of them. Six could be eight, because action, and they are not at all impressed. These people COSLA has missed a few and I have not been through will take different views on the constitution; many of them. The ones that I have that are making full use them will be pro-independence, but they were not at of their DHP are Fife, West Dunbartonshire, North all impressed by the idea that waiting for 2016 is the Lanarkshire, Aberdeen, Aberdeenshire and North best that we can do on this matter. Ayrshire. So there is quite a disparity in size. North Lanarkshire is one of the medium-sized areas. West Dunbartonshire, Fife and Aberdeen are fairly big, but Q289 Jim McGovern: Dave, I was interested in what you were saying about the comparison between the others are smaller. private sector housing and public sector housing. I do not know whether you would agree with me, but it Q292 Mike Crockart: That is interesting. I did not seems almost like a race to the bottom—if private want us to form an opinion based on the fact that it sector tenants do not get this sort of benefit, let’s make was six, and potentially those six could be Shetland, sure that public sector tenants do not get it. Would it Orkney, Western Isles and other ones in between. not be better to equalise it up the way, rather than We have talked about the monitoring of DHP—the down the way? calculations and whether councils are doing that for Dave Moxham: I could not agree more. The thing to themselves to figure out whether they have got the remember is that we are not talking about enormous right sums. Are they or anybody else also doing any sums of money. If we talk about this compared with work to monitor the impact overall of the bedroom some of the other major welfare reforms that are going tax or spare room subsidy upon local authorities more on, it is hard to justify the policy with respect to generally, in terms of the level of arrears and things private or public sector tenants on the basis of its like that? freeing up billions of pounds. For relatively small Dave Moxham: There is definitely a report of amounts of money—everything is relative—compared increased arrears. I noted it down just before I came; with some of the other changes we have seen, we I will see whether I can find it among my scribbled could do what you say. I do not know whether it is a notes. I understand that arrears have increased race up; I am careful of mixing my metaphors with fourfold on what they would have been expected to Mr Davidson in front of me. I agree that we could be at this time. I know that is a fact, because COSLA race to the top, rather than race to the bottom, if that has said that. I am not clear about whether I have an is allowed. actual figure for what that means in terms of money. Chair: Racing to the top rather than the bottom, I certainly know that COSLA believes that that kind between a rock and a hard place—we have got that of increase, if extrapolated over the year, would clear. amount to an increase in housing debt of £25 million. Mike Crockart: I am really not sure of the sense of From those early figures, which showed a fourfold the argument that, because we have subsidised some increase in debt, it extrapolates a £25 million increase cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG03 Source: /MILES/PKU/INPUT/035419/035419_o003_michelle_130716 Corrected Final.xml
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16 July 2013 Dave Moxham over the year. As I said, that is COSLA’s work, not Dave Moxham: There are people far more expert than mine, but I think I am quoting it accurately. me—the solicitors and others who actually deal with these cases—to whom I would obviously defer. With Q293 Chair: That is presumably on the basis that, of many of these things, the proof of the pudding is in the £50 million that will be taken out by the the eating—it is how it is done. A council without a introduction of the bedroom tax, £25 million will be no evictions policy might evict very few people also. met by a combination of DHP, people moving and I would be nervous about saying that I think they are people paying up. The deficit will then be £25 million. meaningless—I do not think they are—but I am fairly Is that only for local authorities or is it for local clear on my ground that the number of people in the authorities as well as housing associations? first year who will be protected by these no evictions Dave Moxham: I imagine it is just for local policies will be fairly limited. authorities. I say “I imagine,” because I am kind of basing it on my reading of something that COSLA Q296 Mike Crockart: Earlier you talked about the wrote that I do not have with me. worries that you have about the likelihood of there Chair: We are going to invite COSLA in as well, so being more evictions in the second year. Is that we will clarify that point with it in due course. because of the 12-month transition and the cumulative build-up of arrears? Q294 Mike Crockart: We will leave that for another Dave Moxham: A very likely scenario would be that day. I turn to the stance that many local authorities a council has a no evictions policy and a number of and local housing associations have taken, which is a tenants do not pay for that first year. At some time in no evictions stance. What is your opinion on that the second year, they reach the type of levels where stance, in particular? an eviction would be highly likely, in the eight-week- Dave Moxham: We generally support that position— plus arrears category. If the council does not have a we support that position. We don’t generally support no evictions policy for the second year, you might it—we support it. Here comes the but—the but is that, want to ask yourself the question, “What assistance, of course, they are not blanket no evictions policies, particularly, have they given to that tenant?” in any case. Even in the case of Dundee city council, I am not one who believes that a no evictions policy which was the first to come up with a no evictions willy-nilly will encourage people not to pay their rent. policy, it is still caveated by saying “assuming that I think most people want to pay their rent, if they can; reasonable efforts have been made to pay.” Of course, they are decent. However, you are certainly not it is described as a 12-month transition arrangement. helping if you have a one-year no evictions policy You could take the cynical view that it is actually and, at the end of that, you come back and whack quite hard to rack up in one year alone, from a people because all the debt they built up in the first position of zero, enough debt to make you liable for year is added to second-year debt and they find an eviction anyway. I do not think it is rigorous, but themselves subject to eviction. normally people think of eight or 10 weeks’ rent arrears as being the trigger for final action. Q297 Chair: Presumably a policy of no evictions as So caveat number 1 is that the policies themselves are a result of debt arising from the bedroom tax is unfair qualified. Caveat number 2 is that they may not on those whose arrears arise as a result of financial prevent that many evictions taking place, because not difficulties because of changes in their other benefits. many were likely to take place in the first calendar You end up with two classes, as it were, of people year anyway. The evictions that are more likely to who are affected by welfare reform—those who are take place will be in cases that have been sisted and due to be evicted and those who are not. That is also are being held in court for other reasons, and the an issue that we want to explore in due course. bedroom tax is the thing that tips them over the edge. Dave Moxham: Yes. There is obviously a specific I am not quite sure how even no evictions local issue arising potentially as a consequence of the authorities will deal with those situations. change to direct payments and universal credit. I The other enormous caveat, of course, is that it does understand that Lord Freud has at least stated that not get rid of the debt. It is interesting that the Scottish there will be periods of time—one month and two Government have cited very clearly that they will not months—over which the move away from direct take action under section 16 of the Housing (Scotland) payments will be judged if people are incurring Act 2001, because that does not get rid of the debt, at significant debt, but that still puts forward the the same time as encouraging SNP local authorities to potential for somebody not to pay their rent for four, take precisely that action. We are in favour of such six or even eight weeks and have a bedroom tax policies because they cannot do any harm and we do arrear. That sort of combination could move people not want to see people evicted. How meaningful they more quickly along the line towards eviction. are in terms of the number of people helped—and certainly in terms of the number of people they Q298 Chair: Before we move off the local actually take out of debt—is a more nuanced position. authorities, could I clarify the point that you made at the very beginning about the second of your requests Q295 Mike Crockart: So is it your view that, to the Scottish Government being to change the although it is a good headline, it does not actually Housing Act to make this ordinary debt? How would differ greatly from eviction policies that most local that impact upon the question of local authorities authorities would have been operating as a rule evicting somebody if they were not paying their rent? anyway? Presumably, if they did that, that would run up against cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG03 Source: /MILES/PKU/INPUT/035419/035419_o003_michelle_130716 Corrected Final.xml
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16 July 2013 Dave Moxham all the sorts of difficulties that you have been hundreds, maybe thousands, of cases in Scotland that identifying. have been sisted because people have a level of debt Dave Moxham: Yes. Many of the limitations of a and theoretically bedroom tax debt will push them local authority no evictions policy are also reflected over the top. Of course, those cases will be moved in the change to the Housing Act. The difference is very quickly because they are already in the system. that that part of the debt, at least, cannot be pursued Treating the bedroom tax component of that as through eviction. In my view, it is probably as ordinary debt would prevent those cases being watertight as or more watertight than a local authority pursued. policy as a way of approaching no evictions. Its two major impacts are similar. The impact on housing Q304 Chair: If somebody had failed to pay only that provider revenue stream is not improved, nor is the section that was due to the bedroom tax, it would impact for the individual in terms of their holding of spare them. If, on the other hand, they did not pay a ordinary debt, but it does make evictions less likely. larger proportion of their rent, they might not be evicted for the bedroom tax portion, but they could be Q299 Chair: That is right. It would clear them of evicted for the other portion, which had arisen from eviction for their debt, but they would still be pursued the loss of DLA. through all the other usual measures—wage Dave Moxham: If that reached the type of levels arrestment and all those sorts of things. that— Dave Moxham: Yes. It would just be treated as ordinary debt. Q305 Chair: That legislative change would not be a “get out of jail free”—or “get out of eviction”—card Q300 Chair: Was the suggestion that it should be no for everybody; it would be only for people affected evictions only for debts incurred as a result of the by the bedroom tax. bedroom tax or for debts incurred as a result of all Dave Moxham: Yes. It would be absolutely precise in non-payment? Is this a standard no evictions policy? that sense. Dave Moxham: It is the Government that have made this proposal. They can speak with more authority Q306 Chair: And it has not been proposed that the than I could, but my understanding is that it relates amendment to the Housing Act should be reworded to very specifically to bedroom tax arrears. That portion of the debt that could be clearly shown to be bedroom cover changes in benefits more widely; it applies only tax arrear would be treated as ordinary debt rather to the bedroom tax. than housing debt. Dave Moxham: It is entirely specific.
Q301 Chair: So somebody who is not affected by Q307 Jim McGovern: Probably every week I have the bedroom tax but loses their DLA payments, ends constituents come to my surgery with housing up in financial difficulties and then ends up in arrears problems and seeking to be rehoused in a smaller or would not be protected from eviction under this larger house. The largest social housing provider is proposal. obviously Dundee city council, but there are others— Dave Moxham: They would not be automatically Abertay, Bield, Servite and Hillcrest. Do you have any protected. They might be protected if the scenario in idea how housing associations are dealing with this which they would be likely to be evicted was the new problem? bringing together of two debts, if you like. If Dave Moxham: To be honest, the majority of the somebody representing the particular tenant were able information I have is from reading the evidence that to say, “£600-worth of this debt is bedroom tax was submitted to you with respect to the proportion debt”— of housing associations that are dealing with problems, so I have no hard statistics. One hears Q302 Chair: But if it were somebody who was not stories of housing associations dealing with these affected at all by the bedroom tax— situations quite differently, including from housing Dave Moxham: Then they would not be protected. association staff, some of whom feel that, quite frankly, they are being asked to act in too draconian a Q303 Chair: They would not be protected. That fashion. However, I do not really have any figures that would seem to be a slight deficiency in this. The figure I can put on that in terms of the way housing that you have related for the bedroom tax debts—or associations are dealing with it. money coming out of the system—being potentially They are very worried—particularly the smaller £50 million does not include the potential debts that housing associations. At least you can say that would arise from people losing, say, DLA or other Scotland’s smallest local authority, Clackmannanshire, benefits and then having to build up rent arrears. So has a discretionary housing payment quota that there would be other potential rent arrears as well as reflects the amount of housing benefit that is paid to the bedroom tax. Clackmannanshire. You might well be a small housing Dave Moxham: Yes. As I said, the one circumstance association with a disproportionate number of people in which it would help would be if someone’s housing who are affected by the bedroom tax. The smaller you debt was a combination of the two, because there are, the more likely that is to be a potential game would be a section of their debt that could not be changer for you. Thirty or 40-unit housing pursued as housing debt. Where that is particularly associations out there could easily find themselves relevant is that at this moment there are probably with 20 or 30 of their tenants affected by the bedroom cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG03 Source: /MILES/PKU/INPUT/035419/035419_o003_michelle_130716 Corrected Final.xml
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16 July 2013 Dave Moxham tax. This could put the smaller housing associations would be fairly unlikely to pay it. As I said, I am out of business. honestly sceptical that it will become a widespread policy, because I just do not see it working for that Q308 Jim McGovern: I had a meeting with Dundee long. city council, which has made clear that the DHP that The non-payment analogy does not work for me. I is available to it will come nowhere near covering the have heard it suggested, for instance, that non- number of people who need that help. Do you know payment of the bedroom tax might be used as some whether any of the associations I mentioned— sort of protest. For various reasons I could go into and Hillcrest, Abertay, Bield and so on—have a no bore you with, I do not think that the two situations evictions policy? are analogous—largely because by its nature Dave Moxham: I am not aware of any housing everybody was liable for the poll tax, and, if 30% of association in Scotland that has a stated no evictions people did not pay, you had a crisis on your hands policy. What they are doing in reality, on the ground, somewhere between local authorities and, at the time, may differ, but I am not aware of any advertised no the Scottish Office. We are not talking about a major evictions policy. Bear in mind, of course, that, when revenue stream and the possibility of withdrawing Dundee gets to look at the amount of money it gets funds that will see Government grind to a halt; it is through DHP, that is not just for its directly housed relatively small beer. So I do not think that non- tenants. The DHP figure will relate to all social payment would work as a political strategy, even if housing in its area. It is not just for spending on its some were advocating it. own tenants—it is for spending on all social housing tenants in Dundee. Q313 Jim McGovern: Because a comparative minority of people—and the poorest people—are Q309 Jim McGovern: We have information that at being hit by this, Government can just ignore it. least one housing association, East Lothian, is actually Dave Moxham: It certainly would not have the two paying this tax on behalf of its tenants. Are you aware big things that non-payment of the poll tax had—a big of any others? political hit and genuine crisis in terms of local Dave Moxham: I was not aware that it was, to be authority revenue streams. At the time that was honest with you. I was aware of— transmitted directly to the next tier of Government, Jim McGovern: That is if they are turned down for albeit a Conservative Government, which still had a DHP. hopes in Scotland and were successful in winning 10 MPs there in 1992. I think the politics and the Q310 Chair: Yes, if they are turned down. The amounts of money involved are widely different, to information that we have in the briefing that we have be honest. been given is that, if people apply for DHP and are turned down, the housing association will meet Q314 Mike Crockart: Turning to the exemptions their— that have been set out, do you think that the current Dave Moxham: I am sorry—you are talking about a exemptions are sufficient? If not, what areas would housing association; I thought you were referring to you like to see them extended to? the local authority. I was not aware of that, but I Dave Moxham: It is slightly difficult to come up with presume that for some that is possible. I would particular categories when you do not believe that imagine that for most it is not—or certainly not on a anybody should be sanctioned at 14% or 20% of very long-term basis. basic benefit. What is clear is that the categories that are outlined as having the potential for assistance from Q311 Jim McGovern: You do not think it is realistic. DHP, such as families with children with significant Dave Moxham: It will eventually affect their revenue birthdays coming up, just make no sense. I met a stream. When it affects their revenue stream, they family in Clackmannanshire, as it happens, who were have very few options. Their options are repairs and two years away from a significant birthday. employment. Frankly, most of them are down to the Essentially, some time in the next year they will have bone already. Every situation is different. It is good if to move house, and some time the year after that they housing associations are able to do that, but I would will be able to move back again. Forget the humanity be very sceptical that that is something that could be and the morality—it just makes absolutely no sense adopted wholesale by most housing associations where there are children involved, who will, by without major revenue stream implications. definition, change their age. I think that has to be looked at. Q312 Jim McGovern: I remember that probably in As you probably picked up, there are also a lot of the late ’80s, at the time of the poll tax, there was a worries in relation to families where somebody has a campaign not to pay it. I did not pay it, but I was a disability that makes it unlikely that they will be able council employee at the time. The first people who on a regular basis to sleep in the same bedroom as had their wages arrested were council employees, so I their partner—classic conditions being epilepsy and had my wages arrested. Do you think that associations situations like that. There is a very good reason why saying that they could pay this tax on behalf of tenants partners with an epileptic in the family do not always is sending out the message, “Don’t pay; don’t worry share the same bed. about it”? Another example I would give you is a family I met Dave Moxham: I imagine that, as soon as it became in Stirling. For whatever reason, the family were clear that somebody else would pay for you, you hoping to regain custody of their children. Obviously cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG03 Source: /MILES/PKU/INPUT/035419/035419_o003_michelle_130716 Corrected Final.xml
Scottish Affairs Committee: Evidence Ev 47
16 July 2013 Dave Moxham the judgment as to whether or not they regain custody the family I was talking to were going to move in should be properly undertaken, but, assuming that that order to downsize. So there is definitely a rural decision was made, the idea that in the meantime that element. There is also a general housing supply family would have moved to a smaller house that was element. It seems to me fairly obvious that, if you are incapable of housing their children, which would making it virtually impossible for somebody to move potentially impact on the decision that the social to other social accommodation because of the level of worker and other agencies would make as to whether housing supply, there must be some sort of test of their children should be returned to them, seemed to reasonableness in terms of whether or not the be daft. It seems to me that, where a family are deduction should apply to them. actively within a process of seeking the custody of their children, to take away their bedroom and, Q319 Chair: One of the suggestions that have been therefore, one of the factors that might see them come made to us is that the tax should apply only after a back is a bit daft. I could go on, but there are definitely suitable offer has been made and rejected. There are some very practical mistakes that are being made in issues around what is suitable and so on, but, leaving respect of exemptions from this. those aside, that would accept the principle of the bedroom tax but would allow a get-out where people Q315 Chair: We have had discussions before about cannot possibly move because the circumstances are issues of principle, issues of implementation and so that there are no houses. Is that an acceptable halfway on. I think it would be helpful if you could draw to house that the STUC might be prepared to consider our attention anomalies like these that ought to be supporting? looked at, either by central Government or by Dave Moxham: I am a trade unionist. I will take somebody else, with a view to making a degree of anything that I can get in a negotiation, without fine-tuning of the system—factors that ought to be affecting my general view that the tax is wrong and taken into consideration before the tax is applied. In that the legislation should be repealed. So, yes, it is the way that pensioners are ruled out, you could reasonable. I sense that part of the Government’s indicate whether there are other categories that ought strategy in relation to this is specifically that people to be ruled out as well. That would be very helpful should move into the private sector. I wish you well for us. in convincing them otherwise. Dave Moxham: Again, I would defer to people with Chair: Before we make any recommendation along more specific knowledge. Those and a couple of those lines, I think we would have to be clear about others are very often the sorts of cases. what capacity there was in the private sector. If the issue of suitable offers is raised, those will probably Q316 Chair: To be fair, we will be asking them as have to include the private sector as well. Being able well, so there will be a degree of overlap. to demonstrate that there is simply nothing available Dave Moxham: Okay. that would not result in your incurring the bedroom tax is different from local authority or private sector Q317 Mike Crockart: I wanted to see whether there alternatives or both being available. We would were particular groups. You have already talked about therefore want to consider what those options are. those with disability, who are a fairly large group in In due course, we will have to clarify what terms of those affected. Are there are other particular information is available to various people about the groups that you feel are badly affected? Are there capacity in the private sector, for example. I am not areas we should be spending most time looking at? clear about whether there is anybody at all who has Dave Moxham: There probably are. Maybe it is just an overview of that position at the moment; we have because it is a warm afternoon, but I cannot think of not come across anybody yet. It is clear what is another specific group. I think there is an issue around available in the public sector, through various housing supply as well. agencies, but not what is available in the private sector and, therefore, how you would measure or check Q318 Mike Crockart: Can I help here? Do you think whether someone is turning down a reasonable offer that this is a worse problem in rural areas, for or opportunity. We will have to have a look at that. example? That, of course, is what the staff are for. We will rely Dave Moxham: I do not have the stats for that, but it on them to be able to assess all of that for us. Lindsay is absolutely clear that it is likely to be significantly wants to ask about the situation going forward. more difficult to find suitable alternative accommodation in the highlands and in other rural Q320 Lindsay Roy: How do you propose to improve areas than it is in Glasgow; the comparison between the provision of social housing in Scotland? How do Glasgow and the highlands is the most obvious. Some you see that moving forward? people might say—I am sure Ian might agree—that Dave Moxham: The financial climate is tight. In the there is a big distance between the east end and the last two budgets—it is not so bad in this budget—we south side of Glasgow as well, but it is clear that the saw fairly significant hits for the capital investment more rural the area, the less likely there is to be available to the Scottish Government, so it will not be suitable alternative accommodation. done easily. We have always prioritised as one of our Again, I give the example of the housing estate I budget demands the building of more social housing, visited in Clackmannanshire, where all of the houses including the building of direct council housing as were three or four-bedroom houses; it was a council well as local authority housing. It is a matter for the house estate full of such houses. I do not know where Scottish Government. More money should be spent. I cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG03 Source: /MILES/PKU/INPUT/035419/035419_o003_michelle_130716 Corrected Final.xml
Ev 48 Scottish Affairs Committee: Evidence
16 July 2013 Dave Moxham do not pretend that finding the kind of capital space year’s budget. That was welcome. It is even welcome that is required to do that is easy in the current that the Westminster Government have decided that climate, but it would be a double-plus good if we there will be some house building in the next period. could find some way of doing it. We need more of that—it is the alternative to austerity. I do not imagine that you and I disagree one iota on Q321 Lindsay Roy: Could the capital budget be the double-plus good that such a strategy would be. augmented? Dave Moxham: For the last couple of years, the Q325 Jim McGovern: Chair, can I digress slightly? Scottish Government have shifted some resource from The Scottish Government recently announced that revenue to capital. Housing did not really see the they will stop the right-to-buy policy for social major benefit of that, to be honest. We certainly felt housing. In Dundee, every week people who cannot that they could have gone a bit further with respect to get a decent council house because all the decent that. It is unlikely that we will change our view that council houses have been bought come to my surgery. the Scottish Government should invest more in capital Does the STUC have a view on stopping the right expenditure on housing. to buy? Dave Moxham: We always opposed the right to buy. Q322 Lindsay Roy: So, in effect, that has We welcome the fact that it has now been got rid of exacerbated some of the problems around the in Scotland. bedroom tax. Dave Moxham: I think it has. It would be unfair to Q326 Chair: I would like to pick up one or two final characterise that as a one or two-year problem. The points. There is an assumption that this is a fairly low- pattern of house building over the last 20 or 25 years level issue, apparently because it is not getting much has taken us in a certain direction that we all accept press coverage—partly, I suspect, because not many has a relatively low number of one-bedroom houses journalists are affected by the bedroom tax. How wide attached to it. That has provided a problem in a whole a range of people do you feel are actually affected by range of areas. I was a councillor in the west end of this? In particular, is it only the unemployed—only Glasgow; I know that the complete lack of one- those who are entirely on benefits—or is it a number bedroom accommodation there caused major of people who are on low wages as well? blockages in the housing system as far back as the Dave Moxham: Obviously there are a number of early 1990s. It is part of a problem, but I think it is a people on low wages who are affected by this and by long-term problem rather than the fault of the other benefit changes. It is having an effect in Scottish Government. communities generally. There is an extent to which, in my view at least, it is not just the bedroom tax—it Q323 Lindsay Roy: Can the private sector help here? is the bedroom tax in the context of the wider welfare Dave Moxham: Decent private sector accommodation changes. In the first case, it is frightening people and is always to be welcomed. It does not necessarily save making them angry. In some cases, it is making them the DWP any money, of course, because—if we are better organised. As you can imagine, I spend quite a talking about similar quality—it normally comes in at lot of my time speaking at public meetings and other a premium. One of the ironies of this policy is that, if events. Those events are more likely to be about the it were totally successful and people jumped out into bedroom tax and the wider benefit issue, to be well all of this wonderful private sector accommodation attended and to have fairly determined and angry that was freely available, the DWP would probably people associated with them. end up spending more money on housing benefit than It is being seen as part of a broader attack. You would it currently does. expect me to put in a word for some of the low-paid Lindsay Roy: A supreme irony. workers and, in particular, some of the people who are Dave Moxham: Indeed. on very temporary contracts just now—atypical hours, even zero-hour contracts. That is all adding to a high Q324 Jim McGovern: I wonder whether the STUC level of insecurity. If you are implying that it is part has a policy on the construction of social housing. As of a picture that is being reflected in alarm in our I said to my Committee colleague earlier, there are communities, I totally concur with that. simply not enough one-bedroom houses for people to I will be slightly overtly political here. There has been move to. We also have thousands of construction some suggestion that public sector workers would workers on the dole who cannot find work. There agree with the benefit cap because their own wages seems to be an equation there—build the houses and have been capped for the last two or three years. If get the construction workers off the dole. the intention was in some way to say, “You are better Dave Moxham: Absolutely. Much of our policy off than those who are unemployed,” or “You should reflects the policies I am sure you of heard of in the disdain the right of local authority workers to a decent green new deal. That is not just about building new wage rise,” and in that way to divide people, I have houses—it is also about dealing with existing houses, not discerned any of that in Scottish communities. retrofit and various other things. Of course, it is fairly clear that the more that happens, the better the housing Q327 Chair: The second point I wanted to raise was is, the less fuel poverty there is, the more jobs there the question of where your campaign goes from here. are, the more apprentices there are and the more an You had your event in Edinburgh. Is it your intention economy can get going. There has been quite a lot to have similar events elsewhere in Scotland? What of talk about capital investment, certainly around this are the next steps that you intend to pursue? cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:06] Job: 035419 Unit: PG03 Source: /MILES/PKU/INPUT/035419/035419_o003_michelle_130716 Corrected Final.xml
Scottish Affairs Committee: Evidence Ev 49
16 July 2013 Dave Moxham
Dave Moxham: We are part of a campaign, and there summer and subsequently, to meet with some of the are a number of different facets to it. Our priority in groups in various locations. East Lothian has been the next period is likely to be to try to reflect some of mentioned; clearly, at some stage we will want to meet the discussion that we have had today. Today we have it either informally or formally to clarify what its discussed a situation in which what local authorities policy is, what the impact is and so on. If we had a are doing is very different. How, therefore, does note—an idiot’s guide, almost—to best practice, that Scottish Government policy relate to that being very would be very helpful to us. different? Jim McGovern: Speak for yourself. Frankly, I would like to see MSPs, local councillors and MPs, where we can get them, meeting with local Q329 Chair: Okay—an idiot’s guide to best practice communities. I would like to see a set of local for me and a superior sort of person’s guide to best community meetings going on now, so that people can practice for my colleagues, if that is how they would really begin to shine a light on some of these prefer to have it. differences in policy in respect of DHP, non-eviction Finally, I think we have established from the evidence policies and the rest of it. There is an extent to which that we have had that the response of the Scottish you can hold lots of national conferences and national Government really seems to be quite weak on a lot demonstrations—the STUC has always done that, and of this, particularly when we look back at how, say, I am sure we will continue to do it—but I think that Strathclyde, Lothian and other regional councils this is a battle that will be fought in communities and reacted at the time of the miners’ strike and other that, to some extent, will require new community events. Is that a fair assessment, or are we being leaders. It is not a question of electing or choosing unduly harsh? heroic leaders to take us forward somehow. Dave Moxham: No, you are not being unduly harsh. It is a fair assessment. As you know, the STUC does Q328 Chair: You talk about local people having not choose to fall out with people for the sake of it, local meetings with the people you mentioned—MPs, but we are strongly of the view that the Scottish MSPs, councillors and so on—but at the moment there Government are failing to do all that they can. There is no guide to best practice, as it were—or is there? is not really a politer way to put it than that. You were shaking your head there. That would enable Jim in Dundee, me in Glasgow and Mike in Edinburgh Q330 Chair: At the end we always ask whether our to say, “Look, this has been identified as being the witnesses have any answers prepared to questions that best practice available. We think you should be doing we have not asked. Are there any other points that x, y and z.” you want to add that you think we should have raised Dave Moxham: I am nodding my head in agreement with you and that have not been covered so far? with you, because there is not. One of the outputs of Dave Moxham: No, there are not. I have probably our conference was to look at how we can do that, spoken for at least as long as you expected, so thank hopefully in not too challenging a way—what are the you very much. 20 questions, or even the 10 questions, that you need Chair: Sometimes we go on for far longer, so don’t to ask your local representative? Some of the worry about that. If you have no other points, thank questions will be fairly obvious. you very much for coming along. That was very Chair: If the STUC and some of the campaigning helpful. groups are developing that, we would find it very useful to see it. It will be our intention, both over the cobber Pack: U PL: COE1 [SE] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
Ev 50 Scottish Affairs Committee: Evidence
Tuesday 10 September 2013
Members present: Mr Ian Davidson (Chair)
Mike Crockart Sir James Paice Jim McGovern Mr Alan Reid Graeme Morrice Lindsay Roy Pamela Nash ______
Examination of Witnesses
Witnesses: Gordon MacRae, Head of Communications and Policy, Shelter Scotland, and Alastair MacGregor, Chief Executive, Argyll Community Housing Association, gave evidence.
Q331 Chair: Gentlemen, welcome to this meeting of Chair: In the interests of openness, I ought to declare the Scottish Affairs Committee. As you know, we are that my wife worked for Shelter at one point and that investigating the impact of the bedroom tax on people I helped to raise money for it. However, that was over in Scotland. We are particularly interested in looking 30 years ago, while my wife was working for at ways in which either amendments could or should Shelter—when she was very, very young, I had better be made, or efforts can properly be made, to mitigate say. And having put that on the record and quickly the worst impacts of the bedroom tax. As you would covered myself—oh God, I hope she is not watching expect, members of the Committee have different this—I turn to Jim. views on whether or not it should have been applied, but we are where we are. We are mainly interested in Q332 Sir James Paice: Good afternoon to you both. focusing on the impacts and efforts that can be made I will start by addressing some Shelter issues, in mitigation. although both of you may want to comment. As you For the record, could you start by introducing probably know, I am an English MP, but we, as the yourselves and telling us a little bit about your Scottish Affairs Committee, are looking at this purely background, to set your evidence in context? I will from the perspective of Scotland. From your contacts start with Alastair. and studies, do you feel that Scotland has been Alastair MacGregor: My name is Alastair affected by these changes any differently from the rest MacGregor. I am the chief executive of Argyll of the UK? Is there something uniquely Scottish that Community Housing Association, a landlord that has has impinged on how they are affecting individual 5,119 properties in the Argyll and Bute council area tenants? of the west highlands. As an association, we have at Gordon MacRae: There are some subtle differences the present time around 530 tenants affected by the in housing policy and rights in Scotland that make the bedroom tax. We have been trying to work with the impact slightly different north of the border. There are local authority, through our own staff, to mitigate the two clear areas that I would identify. One is what we call the 2012 homelessness commitment that the effects of that. Scottish Parliament passed universally over 10 years Gordon MacRae: My name is Gordon MacRae. I am ago, which ensures that in Scotland, as opposed to the head of communications and policy for Shelter England, anyone who becomes unintentionally Scotland. You may be familiar with the Shelter brand, homeless has the right to settled accommodation. The but a lot of people may not be sure what we actually spare room subsidy limits, in effect, the local do. Principally we provide advice in communities authority’s ability to discharge that duty, because it across Scotland, predominantly in Edinburgh, now faces the prospect of placing a homeless Glasgow, Dundee and Aberdeen; there are some other individual in a property that may be too large for them small local offices across the country. However, our under the housing benefit rules. That means that in main service to the public is through our helpline, Scotland the corporate responsibility remains with the which receives about 20,000 calls every year. Within local authority to give those individuals a reasonable the organisation, we also spend a lot of time offer of a property, but now that reasonable offer may campaigning to improve access to housing and to not be covered by housing benefit for them, as their enable people to access their housing rights. other income does not meet the rent. That is one area Looking at the impact of the welfare reform where there is a particularly Scottish dimension. programme as a whole but of the spare room subsidy or bedroom tax in particular, we see it as unhelpful to Q333 Sir James Paice: Forgive me for interrupting, local authorities that are trying to discharge their but that is effectively a conflict between the policy of duties. In our view, it is clearly unfair to individuals the Scottish Government and the policy of the UK affected by it. We have tried to look at some practical, Government. pragmatic steps that may be available to all layers of Gordon MacRae: It is one of those areas where social government, be it at UK, Scottish or local authority policy has developed in different ways at UK level level, to help to mitigate it until such a point as the and at Scottish level. It was possible to mitigate that policy can be reversed, and that can make a real when housing benefit and other benefits were difference to people’s lives. compartmentalised. With the prospect of universal cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 51
10 September 2013 Gordon MacRae and Alastair MacGregor credit coming in, that will become even more difficult Gordon MacRae: So that it would not be to unpick. You might say that that is the result of a reasonable— decision made by the Scottish Parliament, but I would Mr Reid: Would it be within the power of the Scottish say that that was unanimously agreed—there was no Parliament to change the Homelessness etc. vote against it by any party at the time. (Scotland) Act and to legislate so that what you have The other area I would identify is in temporary suggested—that is, the council putting the homeless accommodation. Scotland is more reliant than the rest person into a larger property—would not be a of the UK on local authority-provided temporary reasonable thing to do? accommodation. The rules that we have seen come in Gordon MacRae: Yes—for settled accommodation, with the spare room subsidy, and the other welfare the Scottish Parliament has that power. However, you reforms, are making it more difficult for local start in temporary accommodation. The reality of the authorities to ensure that they do not lose money way the homelessness laws operate is that you are through their revenue account for the delivery of likely to be in temporary accommodation for a temporary accommodation. substantial period. If you further limit the options for In the policy briefing we have done for a campaign local authorities to house those people—we know we have just launched in advance of the Scottish there is an undersupply of smaller properties either in Budget, we have given an example of a veteran who temporary or in the mainstream stock—where do the was made homeless after leaving the armed forces. people go? You have a choice between people being The council placed him in a three-bed temporary flat literally on the streets or the sort of hidden before the changes were implemented. His eligibility homelessness of people living on couches in various was cut by 25% while he is still waiting for the offer places. of settled accommodation, so he is now receiving a Shelter’s view would be that it is better that people bill for 25% of his rent, although he has no means have a roof over their head, albeit one that they may to pay that. If he were in private sector temporary struggle to pay for out of housing benefit when they accommodation, as is the norm elsewhere in the UK, are in temporary accommodation, and that we should that gap would be narrower, because of the different work towards a reasonable property being made rules that are applied. available. That is why, in our submission to the Chair: Before we move on, Alan wants to come in Scottish Government’s Budget, our focus is on short- specifically on that point. term mitigation but also long-term capital investment in supply. Q334 Mr Reid: As you said, the Scottish law on homelessness is that the council must find the Q337 Chair: Could I follow that up? I do not quite homeless person reasonable accommodation. Is case understand your point about how this is a Scottish law such that it is considered a reasonable thing to do problem, as distinct from a UK problem. First, there if the council puts that person into a house that is too is the question of the obligation to rehouse, and then big for their family needs and the person therefore has to pay the rent for that larger house? giving somebody a house that is too large for them. Surely that applies for the rest of the United Kingdom Gordon MacRae: I think it is fair to say that case law has not yet been established post these welfare as well. changes. What we do know is that people are Gordon MacRae: In terms of settled accommodation, receiving the bills for it. but we are focusing here on temporary accommodation in the initial phase. Q335 Mr Reid: Have your legal advisers suggested Chair: I understand. that tenants in that situation would have a case against Gordon MacRae: When someone presents as the council? homeless to a local authority, the local authority will Gordon MacRae: Recently—this week, actually—a do an assessment of whether they are intentionally decision was made on a case in the Fife courts, I think, homeless. If they are found to be unintentionally around what some bedrooms could be determined to homeless, they have the right to settled be, but to our knowledge there is not yet any case law accommodation. The reality of the availability of established on whether a reasonable offer of supply preceding the welfare changes was that there accommodation is one that the housing benefit would was a considerable waiting time in temporary not cover. The challenge that an organisation such as accommodation before getting the settled ours faces is what advice to provide to a homeless accommodation. What has changed now, however, is person. How do we advise them? They can either take that during that waiting period many people are in a property where they are likely to run up arrears from temporary accommodation that under these new rules the start, or they can stay in temporary—or, in some is too large for them, because those are the only places, emergency—accommodation, with little properties that are available. prospect of moving on. Q338 Chair: I understand both elements of the issue Q336 Mr Reid: Would it be within the power of the completely. What I do not understand is why you say Scottish Parliament to change the Homelessness etc. that this is a uniquely Scottish issue. These are (Scotland) Act such that it would not be reasonable difficulties that arise from housing mismatch or for the council to put the person into large shortages of smaller houses. Presumably, that also accommodation where they could not afford to pay applies to any other part of the United Kingdom where the rent? single-person accommodation is not available. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
Ev 52 Scottish Affairs Committee: Evidence
10 September 2013 Gordon MacRae and Alastair MacGregor
Gordon MacRae: The difference is that the temporary accommodation in Scotland, because of the different accommodation in Scotland is council or local homelessness legislation. A priority need assessment authority-provided, which means that it falls into these is done in England that is no longer done in Scotland. new rules that limit the available income for local A priority need assessment looks at people who authorities. It is not just the rent—it is the present as unintentionally homeless and determines management of that temporary accommodation unit. who is a priority. It tends to be mums with children, The majority of temporary accommodation provided people with disabilities and others, under what used elsewhere in the UK is sourced from the private rented to be called a points system. sector, where there is a different set of rules. In Scotland, everyone who is unintentionally homeless has the equal right to settled Q339 Chair: I understand that. Again, this is not a accommodation. In the first instance, that is temporary uniquely Scottish issue. It is perhaps applying to accommodation. The homelessness rate in Scotland is Scotland disproportionately because the balance of six times that of the rest of the UK. That is largely accommodation in Scotland is skewed towards the down to the fact that there is a different set of rights public sector rather than the private sector but, if there in Scotland, which creates an added pressure on the is anywhere else in England, Wales or Northern local authority in terms of its need to source adequate Ireland that has the same pattern and has to house temporary accommodation to fulfil its legal people in public sector accommodation, exactly the obligations under the homelessness legislation. same issues will apply. Gordon MacRae: Absolutely. Q342 Chair: Can I just be clear? The fact that there Chair: Fine. is six times the number in Scotland is entirely due to Gordon MacRae: I would say that this is a the way in which the Scottish Government have particularly Scottish issue, rather than a uniquely decided to implement their legislative responsibilities. Scottish issue. Again, we are trying to distinguish whether or not the way in which the UK Government have applied this Q340 Chair: That is what we are trying to is uniquely adversely affecting Scotland. Unless I am distinguish. When coming out with recommendations, mistaken, you are saying, “No, it is not. It is a we are trying to distinguish between what is combination of, first, the legislation that the Scottish disproportionately Scottish, perhaps, and what is Government have introduced, and secondly, a uniquely Scottish and to which there is a uniquely disproportionate social pattern both of housing and Scottish remedy. I think we have clarified that neither of individuals.” of these is uniquely Scottish but that they are, in fact, Gordon MacRae: There is no evidence of the UK likely to be disproportionately Scottish. Government singling out Scotland in this process. Gordon MacRae: The only area that I say is uniquely These are simply the consequences, unintended or Scottish in those terms is the settled, longer-term otherwise, of the differences in social policy between accommodation. There were circumstances in which Scotland and England. people could be provided with settled accommodation in properties that may be too large for them under Q343 Sir James Paice: Can I come back to a point these new rules. I agree with Mr Reid’s point that it you made earlier when you talked about there being is not in anyone’s interest for that policy to be the no case history? That really raises the issue I wanted norm, but, due to the availability of properties, there to discuss next with both of you. When we took are occasions when people are provided with settled evidence before the parliamentary recess, we were accommodation that may be two-apartment rather told by all our witnesses that, basically, it was too than one-apartment accommodation. That option will early to draw any conclusions about the effect of this no longer be available to a local authority in Scotland, in Scotland or, indeed, anywhere else. Do you feel and it will need to find a different way in which to that that is still the situation, or do you think that there discharge its duty to house a homeless person. are now enough data to draw real conclusions on the impact of the withdrawal of the subsidy? Q341 Sir James Paice: You say that in England the Gordon MacRae: It is still early to make a majority of temporary accommodation is provided by comprehensive assessment of the impact. We have the private sector, which may or may not be correct— certainly seen some changes in the first six months. I am not in a position to argue—but is it not the case We have identified what we are calling six actions that in the private sector housing benefit has not been after six months that we think are practical and paid at all for unnecessary bedrooms, spare rooms or pragmatic steps that the UK Government, the Scottish whatever you want to call them? When you say that Government and local government can take. It will it is different between Scotland and England, the only take time to see the arrears that are built up by difference is that, where temporary accommodation is individuals who either cannot or, in some provided by a council or a housing association, the circumstances, will not pay as a consequence of these spare room subsidy is being abolished, whereas it changes. We are also hearing from landlords that it is never even existed for people in private quite difficult to determine what are bedroom tax accommodation. So, using your very broad-brush arrears and what is just a broader issue of differentiation, Scotland is only moving to the underpayment. English system. I think we can draw some conclusions, especially Gordon MacRae: The difference is that there are around discretionary housing payments. There has more people with the right to temporary been a degree of a postcode lottery in how they have cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
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10 September 2013 Gordon MacRae and Alastair MacGregor been applied. We have done a considerable amount of Alastair MacGregor: There are differences in rents work with local authority chief housing officers. We and accommodation. The concern that we have is that published a policy paper on how we thought many of our tenants are on extremely limited incomes. discretionary housing payments could be applied in Many of the people in our properties who are affected Scotland. That was welcomed by a number of local are very poor as it is. Our concern is that, if they authorities that have looked towards it, the main do not get the top-up through a discretionary housing elements being a transparent process, so that everyone payment and we are unable to move them, there will can see on the council website how that local authority be an issue of ongoing poverty for them and us. is going to disburse the funds that it has available. The earlier discussion about property sizes was One of the things we are keen to see is that local interesting. One of the key challenges that we have is authorities spend all their discretionary housing that only 26% of our housing stock is one-bedroom payments and that they use the ability to top up. We accommodation. If you take the island of Islay as an have also called on the Scottish Government to make example, we have 329 properties on the island, of provision to support those local authorities that do top which only 66 are one-bedroom properties. Ten of up and to reinstate moneys that have been taken from them are sheltered housing, which is obviously elsewhere in the local authority’s budget to do that. allocated differently. We have 19 cases affected by the To us, it is vital that discretionary housing payments bedroom tax and our turnover of houses on Islay every are made easier to apply for and that they help the year is 19, so our ability to respond in a local situation maximum number of people the system allows. to move people is constrained. That is one of the One of the early conclusions we would draw relates challenges we find in a rural area. I think there is an to the difficulty in temporary accommodation. If there urban-rural difference here. It may be easier in our were scope for an exemption for homeless people in urban conurbations to move people relatively closely local authority temporary accommodation, that would because of more supply of one-bedroom properties, relieve a significant amount of the pressure at local but in parts of rural Argyll that is very difficult indeed. level. We would certainly see it as unfair for someone It is a real concern to the housing association that we who is unintentionally homeless and has no real do not have that option. choice about the temporary accommodation they are The Chairman made a point about what we can learn provided with to be landed with a bill that every from this. Our position is that we want to see the agency knows they cannot pay. bedroom tax repealed. However, if it cannot be A long-standing commitment from Shelter and Shelter repealed, we believe there should be a recognition Scotland is the need to address the underlying issue, that, if at the point when the legislation came in which is the lack of supply of social and affordable someone was under-occupying, through no fault of rented properties in general. That is a priority that we their own, they should be able to agree with their would see for the capital budgets of Scotland. landlord to work towards a move over a period of Obviously, if there are any decisions at UK level, time, if that is possible. That would be a reasonable some Barnett consequentials may accrue from those compromise to try to address that particular issue as well. between the supply that is available and under- Alastair MacGregor: Argyll Community Housing occupancy. Association did an analysis between April and July of this year and found that our arrears had increased by Q346 Sir James Paice: Okay; I know other £94,000. We believe that is attributable to the colleagues will want to come back to that point. bedroom tax consequences affecting our tenants. Finally, what effect is this having on your two organisations, in terms of the services that you Q344 Sir James Paice: Is there an issue here provide—the advisory work and so on, and obviously, between the deductions for the abolition of the spare in the case of Argyll, the literal housing? I know you room subsidy and the actual rents being paid? Mr have partly answered this, but I would like to have it MacGregor, many of your properties will obviously addressed directly. Mr MacRae, how has it impacted be in very remote and rural areas. Are the rents there directly on Shelter? significantly lower than in more densely populated Gordon MacRae: We have seen a significant increase areas? Is there therefore a conflict between the in calls to our national helpline and visits to our deduction laid down by Government and the actual advice-giving website. We provide training on a rent that people are paying? commercial basis to local authorities and have seen a Alastair MacGregor: I do not think so. Our rents are big increase in inquiries from them. in the third quartile of rents in Scotland, because historically they were relatively low. Argyll Q347 Sir James Paice: You say you have seen big Community Housing Association came out of a increases. Can you put some percentages on these housing stock transfer back in 2006. Our average rent increases and quantify them for us? as a housing association is £71 per week per property, Gordon MacRae: We have gone from about 17,000 but that varies between larger and smaller properties. calls to this point in the previous 12 months to 22,000 calls in the last 12 months. I cannot break it down Q345 Sir James Paice: So the amount that those more than that, but that has been a significant increase tenants who are having to pay—or are losing the spare for us. We are also seeing a shift in the types of issues room subsidy—is not proportionately greater for people are coming to us with. It used to be that the somebody in a low-rent property than for somebody principal reason for people approaching us was the in a high-rent property. traditional homelessness issues of relationship cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
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10 September 2013 Gordon MacRae and Alastair MacGregor breakdown, unemployment and leaving care or the years. That is reflected in some of the pressures institutions. We have now seen a significant increase that we now find. in what we characterise in our internal statistics as financial issues, to the point that now over 50% of the Q352 Sir James Paice: With hindsight—which we inquiries that we receive are about those. all have, of course, and is of great value—can it be People may have more than one reason for their argued that you could have been quicker off the mark? approach, but we reckon that that is down to the state Forget the advent of the abolition of the spare room of the economy as a whole. We are not able at this subsidy—was your building programme not keeping stage to identify whether it is purely a bedroom tax up with the changing family structures you have issue or a welfare reform issue, but we are certainly spoken of? seeing more people approaching us on financial Gordon MacRae: Argyll Community Housing matters, compared with what used to be the traditional Association’s new build programme started only in homelessness issues of relationship breakdown and 2009, because we are a relatively new housing leaving institutional care. association. That house building programme is based on an analysis of the demands that are on the waiting Q348 Sir James Paice: Does Shelter Scotland as an list of 3,500 in Argyll and Bute. There is a significant organisation receive significant funds from the proportion of one-bedroom properties within that new Scottish Government? build programme, which is being completed and is Gordon MacRae: We do. Recently, we put in current at the present time. We support Shelter’s proposals to provide advice services for moneys that campaign, which effectively says that we should be are being distributed via the Scottish Legal Aid Board. building 10,000 new homes in Scotland per year. We receive direct grant funding for our law service. Currently, the Scottish Government’s target is 6,000. Obviously, we supplement those services with our We believe that that level of house building could start own public donations. We provide very much a mixed to address more quickly some of the issues that are economy of services in local areas. Without the direct around at the present time—not just around the grants for those particular services, we would not be bedroom tax but in relation to the demand for able to provide the advice and support that we affordable housing in Argyll and Bute, which is provide. profound at present. Chair: Pamela, you wanted to come in specifically on this. Q349 Sir James Paice: Have the Scottish Government been able to provide you with any more resources to deal with this increase of, I think, 30% in Q353 Pamela Nash: Thank you, Chair. I apologise calls that you have talked about? for not being here earlier. My colleague just asked Gordon MacRae: There is an allocation currently you about the number of one-bedroom properties and under way, through what is called the making advice whether, in hindsight, we have not built enough. Do you agree that in Scotland we were building homes work fund that is being distributed by the Scottish for life? My understanding is that the reason why Legal Aid Board; I believe an announcement will be more one-bedroom properties were not built was that forthcoming on that shortly. So there has been new the difference in cost between a one and a two- allocation of money, for which Shelter, among others, bedroom property was not that much, and that we is one of the applicants. were more likely to create a longer-term home for the tenant. Is that correct? Was that part of guiding your Q350 Sir James Paice: But you have not yet directly policy on house building previously? received any more funding to cover the extra work. Alastair MacGregor: From our point of view, that Gordon MacRae: An announcement on how that was not a fundamental determination for the houses money will be allocated has not yet been made. that Argyll Community Housing Association has been building. Benchmark guidance is laid down by the Q351 Sir James Paice: Finally, Mr MacGregor, you Scottish Government for what we can build against told us just now about the shortage of one-bedroom for various sizes of house. The applications we put in properties, particularly on Islay. You gave the figure are based on something called the strategic housing of 66, of which 10 are sheltered. Was there a shortage investment plan for Argyll and Bute and submitted to of one-bedroom properties before the withdrawal of the Scottish Government with the support of the local the subsidy? authority. They come back with an allocation against Alastair MacGregor: In recent times, we have been the house types we have put in. To date, the proposals building more one-bedroom properties to respond to that we have put in have not been refused by the housing need in Argyll and Bute, as family Scottish Government. Not all have been approved, but compositions have changed. Obviously there is that is a resource issue. increasing demand from one-person households that The housing mix we have put in has been reflective we have reflected in the houses that we build. The of the needs that we now see in Argyll and Bute. issue for us at the moment is that we do not have the Increasingly, those are towards providing more one- resources to build enough quickly to deal with this bedroom accommodation. I think that historically so particular issue. Historically, for very good reasons, many three, four and five-bedroom properties were the houses that were built in Argyll and Bute over the built in the ’50s, ’60s and ’70s because family years were larger properties, with two, three and four composition at that time demanded that. We are now bedrooms, but family composition has changed over dealing with an historical redress issue. cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
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10 September 2013 Gordon MacRae and Alastair MacGregor
Q354 Pamela Nash: Can I check a point I wanted to Scotland and should be able to be looked at quite come in on earlier? I apologise if this was covered effectively. before I came in. My constituency lies in North Lanarkshire. The council house rent for a one- Q356 Pamela Nash: Where are they held centrally? bedroom property in North Lanarkshire is less than Gordon MacRae: The Scottish Government do a 4% lower than that for a two-bedroom property; off rents survey. the top of my head, I think the figure is 3.7%. The Government’s language around this being a spare Q357 Pamela Nash: This is my last point. I have room subsidy is therefore not adequate. Someone is done quite a bit of research on this in the last couple being fined because they are getting 14% of their of weeks, since it was brought to the attention of all housing benefit taken off them, even though the rent of us in one of our evidence sessions. The only figures for a one-bedroom house is less than 4% lower than I can find are for average rents for each council, but that for a two-bedroom property. Is the difference in those are not broken down by property, which is rent between a one and two-bedroom property the required for us to have a proper analysis of this. My same for your housing? concern is that the Government either have not looked Alastair MacGregor: For historical reasons, there are at this, or are keeping those figures private. different rents in Argyll and Bute. Typically, for a one- Gordon MacRae: You may know better than I, but bedroom property, you could be talking about £40 or the Scottish Government certainly hold those figures. £42 a week. A two-bedroom one can be £53, £54 or Alastair MacGregor: I can speak only about housing £55. I am happy to come back with a breakdown of associations. There is a series of returns called annual the association’s rents, if it would be helpful, but that performance statistical returns that are compiled by is an example. the Scottish Government and ask for rent details of every registered social landlord in Scotland. Those Q355 Chair: I think it would be helpful. This is a should be available through the Scottish Government very important point. As Pamela said, it has been and through the Scottish Housing Regulator. suggested to us that there is a punitive element to the Pamela Nash: I will definitely go back and ask, but bedroom tax, particularly the question of the previously they could give me only average rent, not differential in rent terms between a three-bedroom and broken down by number of bedrooms. a two-bedroom, or a two-bedroom and a one-bedroom property, being less than the amount that is being Q358 Chair: Can I follow up on these two points? deducted from housing benefit, and that people would One is about the punitive element. When I read actually be better off if, instead of having a certain Shelter’s six points, I was a trifle surprised that the percentage deducted from their housing benefit, they punitive element was not covered in them at all. Was just had the differential deducted—if you understand that because you were not properly aware of that, was that. it because your six points were formulated too early It would be immensely helpful, because you are here in the process, or was there another reason? and this is being recorded formally in the way that the Gordon MacRae: The six points relate to where we discussion we had in the western isles was not, if you are now—we are very much focused on what practical were able to give us a breakdown of your various steps we can take now. The message that we get from types of properties, taking into account the points that a number of tenants is that they feel this is a punitive we have made about the amount that is being deducted measure against them as social tenants. It is simply and the amounts that people would lose if they simply not something we have the data on, but there are other got the reduced amount of housing benefit, had they people such as SFHA and other landlord bodies— been in the proper property. Pamela Nash: Is this something Shelter is aware of? Q359 Chair: Fine; I just wondered why you had not Have you heard across Scotland that the difference in picked it up. The second point relates to the Shelter rent is much, much less than the housing benefit cut? money from the Scottish Government. We understand Gordon MacRae: It is certainly something we have that, basically, the UK Government made an been told about by the landlords we have spoken to, allocation of cash for information purposes and that but I have not seen specific figures on it. What we there was then a Barnett consequential for Scotland, have seen is the differential between the cost of a two- which is now being distributed, so effectively this bed social property in the main cities in Scotland and money came from the UK Government. Can I clarify that of a one-bed property in the private rented sector, whether you experience any difficulty as a result of which is logically, in the likely scenario, where being, on the one hand, recipients of funding from the someone would end up. It is fair to say that local Scottish Government and, on the other hand, housing allowance, which is the housing benefit expressing less than total enthusiasm for each and element for the private rented sector, in every city in every one of their policies? We have been made Scotland is greater than the housing benefit payment aware, both privately and publicly, by other witnesses for a two-bed social property. So the process of that the Scottish Government—particularly since encouraging someone to downsize into the available Scotland is a relatively small society—are not quite properties, which in the current climate are likely to open to the divergence of opinion we might have be in the private rented sector, would actually see an hoped for. Has Shelter experienced any pressure on increase in the subsidy coming from the state. I do not these lines? have to hand the differential between a single Gordon MacRae: Shelter Scotland and Shelter in the landlord’s rents, but the figures are held centrally in UK was founded as a campaigning organisation. We cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
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10 September 2013 Gordon MacRae and Alastair MacGregor have never knowingly held back on saying what we solution in Mull, so someone would probably be quite think to be the case. At times those comments are willing to move to another village in Mull if that were welcomed; at other times they are not necessarily an issue. I think they might see that as reasonable, as helpful. However, most Members of Parliament, both would we. The issue then is, if people are living in at Holyrood and here, recognise the role that an Appin, have been there all their days and the only organisation such as ours seeks to play. While we opportunity is to move to Oban— would have liked to see some of that advice money Chair: Which is how far away? made available more quickly and sooner, we are quite Alastair MacGregor: It is about 19 miles away from comfortable about being able to campaign effectively Appin. In many rural communities, people have been and at the same time to use those moneys that are there all their days. They have networks and support available to invest in good-quality services, because in these communities, particularly if they are people we think that the voluntary sector more broadly is well who have relied on family support throughout the placed to get to those hard-to-reach individuals who years. I think there is an issue here of poverty and might otherwise refuse the support of a Government, vulnerability, and a lot of the networks in communities local authority or landlord body. provide that kind of support.
Q360 Mr Reid: Thanks very much for coming today. Q363 Chair: If 19 miles is too far, is 10 miles too In earlier questioning, Alastair, you talked about the far? Is 5 miles too far? We are going to make mismatch in the housing stock. You gave the example recommendations at some stage. It may be that the of Islay, where there was a shortage of one-bedroom question of what is reasonable is taken into account. I properties. Do you agree that it would be completely take your point that an island is an island, as it were, unreasonable to expect a tenant to move from Islay to but presumably Appin is not an island. It might the mainland to find a smaller property? therefore be appropriate for somebody to consider a Alastair MacGregor: I think it would, unless someone move somewhere within the environment, but within wanted to move. As you probably well know from what sort of distance—to Oban? When you are your own constituency work, there are a lot of close- making judgments about these things, what sort of knit communities in Argyll and Bute. A lot of people distance do you consider reasonable? provide support for families in many of these Alastair MacGregor: A neighbouring village might communities. Our view as a housing association is be reasonable. Duror is further north by about 6 miles, that there should be housing solutions to local housing but we do not have any other social houses available challenges. On that basis, I think it would be until the village of Benderloch, which is another 10 unreasonable to ask anyone to move to the mainland miles away—it is a different community. If push came from the island of Islay. to shove, you might say that that is reasonable in terms of not being too far away, but in many rural Q361 Mr Reid: Presumably it is not just on the communities the bus network is not that great. The islands that the same situation arises of close-knit realities are that many people do not have a car, so communities a long distance apart. Is it also the case there are issues around that as well that come into on the mainland that somebody in a small village play when we make these considerations. where there was not a one-bedroom property would have to move a long distance to the nearest town to find a one-bedroom property? Q364 Mr Reid: You say that the bus network is not Alastair MacGregor: Absolutely. If you take the that great. Do you mean that there is about one bus example of the village of Appin in north Argyll, where a day? I think we have a housing stock of nine at the moment, Alastair MacGregor: In Appin, there may be the the reality is that the turnover of accommodation is school bus and two or three other buses that go back very low; when it comes to one-bedroom and forward, but there is not a frequency of public accommodation, there are two or three units. Just in transport compared with urban areas. I think that that, terms of practical steps, it is very difficult to facilitate too, is a factor in many people’s minds when they that solution in the local community. The alternative think about moving to other accommodation, if it would be to move to a town such as Oban. However, were available. as you will be well aware, the demand for affordable Gordon MacRae: In policy-making terms, we have to housing in Oban, too, is huge at the present time. Only be very careful about trying to have a one-size-fits-all in large urban conurbations where there are larger approach to reasonableness. As Alastair describes, it supplies of one-bedroom properties is it easier to find is very much unique to the individual. We must solutions, but for us it is challenging at the present always bear in mind that a number of people who are time. in receipt of these benefits are in work, so another element of a reasonableness test would be, would it Q362 Chair: Can I ask for guidance? Do you have a make employment sustainable if they had to travel rule of thumb that says, “It is reasonable to move further? No one would want to see the housing these people 4 miles but not 5 miles, or off an island”? circumstances result in someone having to leave If we are talking to Government about reasonableness, employment. Rather than having a sort of blanket do you have any guidelines as to how you determine reasonableness policy, we have to look at the reasonableness in that regard? individual circumstances, which can take in family Alastair MacGregor: In Argyll we would take the support networks, as far as child care goes, and what view that a housing solution in Mull is a housing is the sustainable outcome that we are seeking to cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
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10 September 2013 Gordon MacRae and Alastair MacGregor achieve through policy. We must focus on that, rather basically an average set down by the Scottish than a one-size-fits-all approach. Government. The average cost that we are paying towards house building at the moment is £120,000. Q365 Jim McGovern: Could I go back to a couple That is the average that we get against that stock for of points that were made earlier, including one by the developments that we do at the present time. Gordon? Thanks very much for coming in; it has been very helpful. I think you said that Shelter’s target Q371 Jim McGovern: I am still not quite sure I have would be 10,000 new homes per year. got the answer. In social housing—or affordable, Gordon MacRae: Yes. unaffordable or less affordable housing—what would Jim McGovern: Or was it Alastair who said it? be the net difference in cost between building a one- Gordon MacRae: Alastair mentioned it. bedroom house and building a two-bedroom house? Alastair MacGregor: The Scottish Federation of Alastair MacGregor: I do not have the answer to that Housing Associations and Shelter agree that 10,000 question on the basis of the houses that the association new affordable homes should be built in Scotland builds. We have an average house cost. I am sure that every year. if we asked a builder to build us one-bedroom houses, two-bedroom houses and three-bedroom houses Q366 Jim McGovern: Right—and the Scottish separately, they would give us a different price for Government are saying that their target is 6,000. those houses. We go on the basis of an average for the Alastair MacGregor: Of which 4,000 are affordable. house building developments that we do. Jim McGovern: Four thousand are? Alastair MacGregor: Four thousand out of that 6,000 Q372 Chair: But I think you understand the point are affordable. that we are pursuing. When we spoke to people in the Gordon MacRae: For social rent. The target is 6,000 western isles, they said to us that they had a tendency affordable homes, 4,000 of which are for social rent— to build two or three, rather than one, because the council or housing association rent. Other forms of marginal cost of construction was not all that high and affordable are things such as shared equity and mid- it gave them a substantial degree of flexibility. What market rent. I am not clear about is whether we may have a situation where the impact of the bedroom tax is to Q367 Jim McGovern: Right, so they are force people such as you into building a unaffordable. disproportionately large number of single-bedroom or Gordon MacRae: The determination is that they are smaller houses, which robs you of flexibility in the not socially rented. longer term, while the amount of gain is not actually Alastair MacGregor: They are a bit more expensive. commensurate with the amount of inconvenience it causes you as managers of housing stock. That is why Q368 Jim McGovern: The question I wanted to we are asking this—it is not like 20 questions. ask—it is probably a matter of opinion rather than a Alastair MacGregor: No. I am very clear on this— matter of fact—was: do you think the Scottish our housing development is not being driven by that Government will achieve the target of 6,000, which is prerogative at the moment. The proposals that we are 4,000 fewer than you want? putting forward to the Scottish Government are based Gordon MacRae: I think there is some concern on the housing needs that we see at the present time. around the levels of completions and starts. This is Clearly there are higher demands, as we have seen, measured by the number of properties that are for one-bedroom properties. That is reflected in the completed. application—
Q369 Jim McGovern: A one-word answer would Q373 Chair: Can I clarify this again? In terms of do. flexibility, if it were not for the bedroom tax, would Gordon MacRae: Yes for this year, but there are you be more inclined to build properties with two doubts about the commitments for future years. There apartments, even though somebody needs only one, is an annual commitment for every year of the on the basis that that person might not necessarily be Parliament. I think we have some doubts due to the in that house for ever or indeed, because many low level of starts in recent years. There is a line from seeking single apartments are older people, they might a start to a completion. We are a bit concerned that not necessarily be there for all that long? Might you there may not be enough properties currently being therefore want to be able to relet that house? A wider built to deliver the target in future years. trawl of people are eligible or suitable for a two- apartment property than for a one-apartment property. Q370 Jim McGovern: The second point relates to Alastair MacGregor: The reality for us at the moment something that Pamela asked; I am not quite sure that is that the bedroom tax has had no impact on how we we got the answer to it. In terms of the cost of have developed houses—we have done that purely on building new houses, what is the difference between the basis of the needs that we see. It may have a a one-bedroom, a two-bedroom and a three-bedroom greater impact on how we build in the future, if property? demand factors for one-bedroom houses continue to Alastair MacGregor: Argyll Community Housing increase, but at the moment our analysis is based on Association works on the basis that an average house our view of the waiting list and the needs on that list build grant is made available against something that at the present time. is called the three-person equivalent, which is Chair: That is helpful. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
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10 September 2013 Gordon MacRae and Alastair MacGregor
Gordon MacRae: Obviously, we are not house communities people wish to live in, so what is the developers or financial managers, but we have heard next best option? some of the larger urban housing associations make a However, we certainly do not think that communities similar case—that, where they get scale in a single should be artificially broken up because of the development, it makes sense in future planning to application of national policy. We want to see people build those homes for life, which enables carers and able to grow and manage a life in the community that other people to come in at later stages, because the they choose and to see a future supply of housing that marginal cost difference can be offset in future enables communities to be sustainable and to continue allocations. Bodies such as the SFHA and, potentially, to grow. These difficulties demonstrate the problems CIH might be better placed to identify the figures that happen when you pull one thread of housing behind that. policy and do not make allowances for the other Chair: As you will appreciate, you are here, so it is aspects of it. As we remove funding from one area, reasonable for us to ask you at the moment. there are consequences—possibly unintended— throughout the chain of housing policy elsewhere. Q374 Jim McGovern: I want to make clear that I am not trying to ask unfair questions. If I cannot ask Q376 Pamela Nash: Is it your role to advise only somebody from Shelter and a chief executive of a individuals? Do you think there is adequate advice to housing association, I am not sure whom I should ask. social landlords? I may be talking out of turn here— Gordon MacRae: I am simply suggesting that SFHA are there guidelines on how far is too far and whether or CIH—I am sure they will not mind my saying this people should be rehoused in their own villages, for here—may be well placed to provide hard facts, rather instance, or urban islands, which is a good phrase? Do than opinion, on that, because they are the those guidelines exist? representative bodies of the officers involved in Gordon MacRae: There are allocation policies for making those decisions. each registered social landlord—Alastair will be able to talk about those—which are particular to the Jim McGovern: Maybe we could do that, Chair—ask interpretation and policies of each locality. There is somebody else. guidance from the Scottish Government as well. Chair: We will pursue that. Pamela, you had a point you wanted to make. Q377 Pamela Nash: Just to be clear, are there national allocation policies that have guidelines? Q375 Pamela Nash: I am sorry—we are far away Gordon MacRae: As I understand it, there is national from it now. It goes back to the Chair’s point about guidance for registered social landlords to create their what are the rules and how you decide how far is own allocation policy determined by local need. too far. Gordon, you talked more about the individual Alastair may be better placed to talk you through that. circumstances and the differences. Does Shelter have Alastair MacGregor: In Argyll, there is an allocation a view on protecting rural communities and on policy called the HOME Argyll allocation policy, whether people should be rehoused there? I think which is run by the four housing associations in about my constituency, where there are a lot of Argyll. The idea behind that is to give a one-door villages. Because of housing pressures, people are approach to housing allocation. There is some often advised that they should be looking further flexibility within that, but there is overarching afield than just their own village, but they might argue guidance set out by the Scottish Government, through that there are transport issues or that they want to stay the Scottish Housing Regulator, on the basis of next to their family for child care. However, I housing needs. There are clear benchmarks appreciate that we are very different, because we do associations have to work against, particularly on not have sea borders or islands. Every area in Scotland homelessness nominations; there are also points will have different needs. Does Shelter have a view criteria against various types of housing need, which on that? are there as top-down guidance. Gordon MacRae: There are a number of urban islands You can develop local allocation policies—Argyll across Scotland, because of transport links and Community Housing Association has just developed various things. one for the village of Dalmally in Argyll—to meet Pamela Nash: That is a good phrase. particular needs. We were building houses that met Gordon MacRae: This is the difficulty we face. I particular demands in that area, and allocations were grew up in Paisley. Famously, Ferguslie Park is made in a weighting towards folk in that community. effectively cut off from the rest of the community by So there is flexibility within allocation policies, which a train line. That can make it difficult for people in can assist the building of affordable houses in terms of public transport links and so on. One of the particular areas to meet some particular local challenges we face as an advice provider is how to housing needs. provide someone with the right information and advice for them to make a decision on their future. Q378 Pamela Nash: I have one final point. The We certainly see it as a decision for the individual— reason I asked about a national policy was to see it is for them to determine what is likely to satisfy the whether that flexibility was allowed. In areas such as majority of their needs. In some circumstances, that your own, if there were national guidelines, there will be moving slightly further away, because we have might be more support and consideration of the to operate in the world that we inhabit. There are not specific impact of a new policy such as the bedroom necessarily the properties available in the tax when it comes in. My understanding is that, if cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
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10 September 2013 Gordon MacRae and Alastair MacGregor there is that flexibility, it might not allow those the figure was £152,000. In our discussions with decisions to be taken at national level. Argyll and Bute council, it has indicated that, on the Gordon MacRae: There is a degree of flexibility, basis of the increase in resource, it is willing to look especially in legislative areas such as homelessness. again at some of the cases that it refused for Again—to urge a slightly cautious note—we also need discretionary housing payment. Hopefully, that will to make sure that we have a housing policy that mean that our tenants who were previously refused enables people to move around for work. That policy discretionary housing payment will get it in the future. needs to reflect local need and local demand, but there At the moment, we have had 175 applications for is also a need to ensure that we have a housing policy discretionary housing payment, of which 100 have that does not draw artificial borders in communities. been assessed by the council and only 50% have been We need to ensure that people are able to move to successful. If that additional resource is brought into where jobs are and to find accommodation so that they play, it should be of assistance to our tenants. All I can take up those employment opportunities. would say is that not only Argyll Community Housing Again, I think this just demonstrates that there are so Association’s tenants will be applying for this—there many factors and variables within housing policy that are three other housing associations in Argyll and it is always beneficial to have a more joined-up Bute. Clearly, an increase in resources is welcome. If approach to any changes that come forward. One of it goes to the right people, that is obviously something the frustrations that we have had with the application that I would welcome as well. of the removal of the spare room subsidy and the Chair: We have a section on DHP in a moment, so introduction of the bedroom tax is that it has not we will come back to Alan. necessarily made it easy for decision makers in local communities to respond effectively to their local Q380 Mr Reid: Has the association changed its needs. allocation policy since the introduction of the Alastair MacGregor: There is one aspect of Scottish bedroom tax to try to help tenants who want to Government policy, perhaps, that clashes with the downsize? Westminster Government’s bedroom tax or spare Alastair MacGregor: A couple of months ago, the room subsidy legislation. At the moment in Scotland, association’s board made a decision to award 200 local authorities have a statutory responsibility to additional points to the transfer list to assist people to provide for homelessness. The housing association in get a better chance of moving, if they so wish. Argyll has to make 50% of our lets available to the local authority to discharge that function. We have a Q381 Mr Reid: I suppose it is only two months, so turnover of 450 properties a year, half of which have you may not yet have had much chance to evaluate its to go to meet that particular need. That limits our success, but what investigation have you been able to ability with what housing stock is left to facilitate moves and to assist people, if you see where I am do into the success or otherwise of that policy? coming from. Alastair MacGregor: At the moment, it is too early That is perhaps an unintended consequence of the two to give an overview on it, but in the early months of different aspects of housing policy that, in my view, the bedroom tax we are seeing a willingness by removes some of a landlord’s ability to try to help tenants to try to get assistance through the people in these particular circumstances. Not only do discretionary housing payment. I think there are 116 we have a shortage of one-bedroom properties, but applicants on the transfer list who have indicated that within the properties that we have available to let, they would be willing to move—out of about 530 who 50% are already away for another statutory are affected by the bedroom tax. requirement, before we move on to dealing with the implications of trying to move people to mitigate the Q382 Mr Reid: Is that since the bedroom tax came cost of the bedroom tax. into effect? Chair: Mike, do you want to lead off with your Alastair MacGregor: That is since the bedroom tax questions? came into effect. Mike Crockart: This is not really related to the questions that I have. Q383 Mr Reid: So 116 out of 530 have expressed a Chair: Fine. Do you want to pick it up just now? wish to move. Have any of them been able to find smaller accommodation yet? Q379 Mike Crockart: I will make it very short. Mr Alastair MacGregor: I do not have that figure MacGregor, you made a compelling case for a need available, but I can come back to you on it. for greater help for rural areas because of particular Mr Reid: Please could you come back to us on that. problems that they have in moving people great distances. That case has been made down here, and Q384 Chair: Can I clarify the point about those 116 the allocation of DHP for 2014 was increased in part people? I will phrase it in a different way. Let us say to mitigate the problem. Is that enough or is it merely that you are somewhere like Appin or Mull and you helpful? Is it going to the right sort of areas? know that there are no houses available. Are there a Alastair MacGregor: I think that only time will tell. number of people who will be adversely affected by At the end of July, the Westminster Government the bedroom tax but have not applied because they increased the amount of discretionary housing know that, if they do, the only transfer they would get payment for Argyll and Bute from £152,000 to might be off Mull? £370,000. We clearly welcome that, because before Alastair MacGregor: Yes, that could be the case. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
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10 September 2013 Gordon MacRae and Alastair MacGregor
Q385 Chair: So these figures do not tell us as much have been raised with us that, to be fair to the as they might, in a sense. If somebody is in a two- Government, are probably—or possibly; some of us apartment property in Mull and there are no one- are more generous than others—unintended apartment properties in Mull, for the sake of consequences. Others may feel that they are not argument, they will not apply because their only unintended consequences, but I think we have to alternative, if you gave them an offer, would be off assume that, if we can identify unintended the island, but you do not know whether they would consequences, we may get a welcome ear. be willing to move. It comes back to the question of Gordon MacRae: Short of full repeal, one of the areas reasonable offers, doesn’t it? we see as particularly unfair is the way in which this Alastair MacGregor: Yes. applies to people who have not even had the opportunity to refuse a smaller property. In the Q386 Chair: Maybe I can put this point to both of absence of a tenant being able to exercise some you. The question is: is it reasonable for people to be decisions around their own housing circumstances, penalised by the bedroom tax if they cannot be made they are still being penalised under this system. If the a reasonable offer? Very often, there will be people Government were minded to look at what could be you may have put into a house that is too big for changed and were not persuaded that full repeal was them at the time, but may fit them in due course—we the best way forward, that is certainly one area on certainly got this in the western isles—because they which we would look for some movement: is it were allocating for life. That has been your decision, possible to limit the scope of this to people who have but now they find themselves caught by the bedroom refused a reasonable offer of a smaller property? tax and being penalised, and there is nowhere for them Alastair MacGregor: I would agree with that. The to move. The question is whether it is reasonable for point I made in my submission was that, if the people to be hit by this tax in those circumstances. bedroom tax is not going to be repealed, what is a How would you respond to that? sensible way to address the issues and challenges Gordon MacRae: No, it is not reasonable for someone around that? There needs to be a partnership between to be caught by the bedroom tax for a decision that Government, local authorities and the housing they did not make and were not able to make. We association sector to work this through. Over a three- would see that as unfair and unreasonable. year period, we could look at having associations use their ability to change allocation policies, with support Q387 Chair: So what is the answer? from Government—and, if nothing else, the Gordon MacRae: We would say that the best answer suggestion that they do so—to give priority to is to repeal the proposal. Short of that, we should look assisting people to move by taking up offers that are at what other options are available to the UK not unreasonable. As a number of you will know, Government to achieve the policy outcome that they housing associations make allocations at the moment seek. One of the areas we have slightly struggled with on the basis of three reasonable offers on the waiting is to understand what policy outcome the removal of list. If we looked at a structure to work towards that the spare room subsidy is seeking to achieve. Is it a over a three-year period—the recognition would be recalibration of what is termed fairness, or is it to save that it applied to anyone who found themselves, not money? If it is the first one, that is clearly a political through their own making, in under-occupancy at the decision that politicians can make based on the time when the bedroom tax came in—many people objectives that they have. If it is to save money, we would say that that was a reasonable middle road. are struggling to see where the business case is to I may be wrong here, but I understand that one of the stand up the policy, because we think it is resulting in big concerns the Government had when looking at this additional cost to other parts of the state. We are was the huge increase in the costs of housing benefit certainly seeing the impact it is having on social in many parts of urban Britain, particularly London. I landlords just now. Alastair mentioned the arrears that think that rural Scotland is a million miles away from his housing association has seen. If there is the that. Some of the unintended consequences of this are opportunity to revise the legislation, I think that that in island and rural communities, where there is greater clarity on what the objective actually is here little scope in the short term to move people, you are would enable us to come forward with some leaving many very poor people in a situation where, suggestions about how that could be achieved. if they do not get assistance through discretionary housing payment, they will suffer more because of it. Q388 Chair: As I am sure you are aware, If people in government were able to look at that in Governments often decide on particular courses of a sensible way with housing associations and local action with a multiplicity of objectives, so wanting to authorities over a three-year period, we could work save money and wanting to make better use of the towards a sensible outcome in relation to it. housing stock are not mutually incompatible. Gordon MacRae: Just for the record, it is not our Particular solutions might fit one but not the other. In proposal that the bedroom tax remains in any form. I these circumstances, it would, therefore, be helpful if, think this is trying to identify where the particular upon reflection, you came back with any further inherent unfairnesses are. The only real long-term proposals. The Committee might have individual solution to this is to build more homes. We also have views, but it has no collective view on repealing the to look at the cuts that have been made to the house bedroom tax. However, we are in the market for building budget in capital terms, at both a UK and a looking at ways in which, perhaps, unintended Scottish level, to see the impact that those are having consequences can be addressed. A number of issues on this very discussion. We are likely to have similar cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
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10 September 2013 Gordon MacRae and Alastair MacGregor conversations 10 or 15 years from now because of the problem? Perhaps this has already started to change under-supply that is currently in the pipeline. because of the large waiting lists, but now that we are in the situation we are in, what is happening with Q389 Chair: Can I be clear? Would you as Shelter social landlords’ allocation policy? Has it caused a say that successive Scottish Governments since the problem? Is it now changing? Is the removal of the beginning of devolution—this is not a partisan point— subsidy making it worse or helping to move things have underinvested in capital spending in housing and along more quickly? What is your view? that this is therefore a problem that is cumulative? Is Gordon MacRae: I think it is fair to say that that a fair assessment? allocation policies are often the contentious area Gordon MacRae: Absolutely. I would go further back between campaigners like ourselves and social than 1999 and the start of devolution; I think we can landlords. The idea that we did not have a fair system look back to the mid-’80s, when we really started to and it did not enable single homeless people, in see the decline in supply of social and affordable particular, to access housing partly informed the housing across the whole of the UK. That has resulted homelessness commitment that came in. We in increased reliance on the private rented sector. We recognised that that created real problems for health mentioned earlier that local housing allowance is and other life chances. higher than housing benefit in the social sector. Over One of the things that we have identified around the past 10 years, Scotland has seen the private rented allocation policies because of the bedroom tax is that sector grow from about 4% to 11%, and we are seeing some landlords—not all—do not allow transfers for more families living there for longer. tenants who have arrears; they prefer to see those I know that one of the rationales that has been arrears resolved prior to any future transfer. Clearly, in expressed for introducing the bedroom tax in the these circumstances, you face the prospect of people social sector is that it does not exist in the private running up arrears without any prospect of being able rented sector, but one of the differences we should not to address those. We have seen a number of lose sight of is the security of tenure that people have landlords—we gave an example in our paper of one in the social sector. The private rented sector is in England, but we know anecdotally of some in inherently more insecure. People face the prospect of Scotland as well—take a policy decision to enable moving on every six months to a year. We are keen to anyone affected by the spare room subsidy or see in the forthcoming housing Bill in the Scottish bedroom tax still to be able to access a transfer so that Parliament during this parliamentary term movement towards a more secure private rented sector. Again, they may be able to resolve that. That is the type of that is about a pragmatic approach to the world we pragmatic, practical step that we would like to see find ourselves in. As more people are reliant on the taken through allocation and eviction policies to private rented sector, we need to give those families ensure that we are all doing everything we can to keep the same degree of security that other families who a roof over the heads of people affected by these are either owner-occupiers or social tenants enjoy. changes. Chair: That is helpful. Q393 Chair: Surely one of the issues with that is that Q390 Mr Reid: Alastair, you said that you had most people would seek a move to alternative housing awarded 200 extra points to tenants who want to as an improvement. You can see how other tenants downsize. What does that mean in practice for their and landlords may not be keen to allow people to chances of being rehoused? Where would it put them move to what they see as an improved house if, in on the waiting list? fact, they are still in arrears. If there were some Alastair MacGregor: Clearly, that number of points tweaking of the system whereby people could move would get them up to a level where they would get only to the equivalent category in order to downsize offers within a reasonable period of time. You know and to diminish their bedroom tax liability, as distinct yourself that that is dependent on turnover in from moving to somewhere better and nicer, that particular areas, but it gives them a realistic chance of might be an acceptable balance. I know that in my being housed a lot more quickly than would area people would see it as unfair if folk were allowed previously have been the case. That is the logic behind to have arrears and to move to better housing. the decision. Gordon MacRae: Again, this comes back to individual circumstances. It would be a judgment call Q391 Mr Reid: Will they be ahead of everybody as to whether downsizing is always an improvement else, other than the homeless applicants? in the circumstances of a tenant. It may just be a Alastair MacGregor: Yes, they will clearly have been rational decision that it is unsustainable for the given priority. That would be the outcome of that. individual to continue to rack up arrears at the rate at Chair: Mike, you wanted to pick up questions 5 and which they will be doing that and that it is both in the 6. Much of this has been covered already. interests of the landlord and the financial interests of the tenant to make that move, but there may be other Q392 Mike Crockart: I do not propose to ask factors. This goes back to why I was saying that, when question 6, because I think it was fairly well covered it comes to allocations and reasonableness, we have to in the answers that we have just had. My other take each individual circumstance on its own merits, question is about allocation policies more generally; it because applying a one-size-fits-all policy may fail to is probably directed more towards Mr MacRae. capture some of the other elements that are crucial to Historically, have allocation policies been part of the ensuring that a tenancy is sustainable. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
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10 September 2013 Gordon MacRae and Alastair MacGregor
There are other areas such as transport, employment any idea of the continuing shortfall with those who or family connections that are equally important to have applied—in other words, of demand and supply? avoiding future homelessness applications, which are Gordon MacRae: We support a number of tenants to very costly to the local council and others—up to apply for discretionary housing payments. It varies £20,000 at times. We need to do everything we can to slightly from area to area. For those tenants whom we avoid people presenting as homeless. Sensible support, we have seen a 50% success rate in some changes to allocation policies would not necessarily local authorities, whereas in others it has been 100%. reward someone for being in arrears, but they would It is very much dependent on local circumstances. remove a barrier that some landlords may That is why we are quite keen to see local authorities inadvertently have put in place, because that policy publish a transparent discretionary housing payments probably came in at a time when people who could policy, so that everyone can know how to go about have paid had not paid. making an application and on what grounds decisions Chair: Certainly. will be made. That would allow us to be clearer. At Gordon MacRae: What we are looking at here are times it can look, to our eyes, rather arbitrary because people whose income, which is supposed to be tied to all you get is the yes or no. We recognise that there is their rent, is now not enough to cover their more going on behind the scenes than that, but for an outgoings— advice agency such as ours, which works across local authority boundaries, it can be quite difficult at times Q394 Chair: Alastair, can you give your to be clear about what is happening in one place observations on that policy? over another. Alastair MacGregor: There is probably some difference between housing associations and Shelter Q398 Lindsay Roy: So you are seeing different on some aspects of allocation. I think where we would pictures. Would I be right in saying that in some cases agree is that a lot of the allocation policy issues could there are clear and consistent policy frameworks, but be solved if we built more homes to meet the needs. in others it is more obscure? There have been challenges for housing associations Gordon MacRae: It is certainly less transparent in in delivering against the homelessness legislation some areas compared with others. objectives, in terms of the requirements of housing associations to deliver. Q399 Lindsay Roy: Can you tell us where you found The question was about bedroom tax arrears and the good practice? issues around the move. Argyll Community Housing Gordon MacRae: I do not have a scorecard to hand. Association’s board took the decision to allow that Our experience is based upon where we have transfer to take place where a tenant is in arrears, particular types of services; it is not necessarily a because there was a recognition that, if we did not reflection of the policies and practices that are in place help the person to move, it would probably just add in that local authority. Certainly in South Lanarkshire, to the arrears. That does not mean that the arrears go where we have a support service that is quite an away; they are still our tenant, and they will still be intensive one-to-one support programme in which we managed under that arrears arrangement. However, we work very closely with the tenant, we have had very felt that that kind of flexibility in these particular positive results and are very happy. In areas where we circumstances would allow us to help the person help only provide advice, either on the telephone or at themselves, so to speak, so we have allowed it. some remote distance, we are not always able to see whether those decisions are made. That is a universal Q395 Chair: Given that you have a shortage of service across Scotland. My comments are really single-person accommodation, would somebody who based on Shelter’s experience, rather than the had arrears and was continuing to pile them up performance of local authorities. because of the bedroom tax be advantaged over somebody who was, perhaps, being affected by the Q400 Lindsay Roy: I think we are interested in bedroom tax but had not built up arrears? You can see Shelter’s experience. Could you give us details of that there is a question of moral hazard. where you are very happy with arrangements and Alastair MacGregor: At the moment, the association where you require further information from has made a decision to give additional points to any authorities? tenant affected by the bedroom tax, whether they are Gordon MacRae: I would be happy to follow that up in arrears or not. The offer would be made on the in writing. It is not something I have to hand here. basis of where they came on the list as a result of that, South Lanarkshire is one example of where I know not differentiating between— there has been—
Q396 Chair: So there is no bonus for being in Q401 Lindsay Roy: That is very helpful. Can you arrears, as it were. tell us which authorities have topped up to the Alastair MacGregor: No, there is no bonus for that. maximum discretionary allowance and which have Chair: I wanted to clarify that. We have now covered not? those points. Gordon MacRae: We have done a phone-round of all local authorities. To our knowledge, 14 out of the 32 Q397 Lindsay Roy: I want to focus on discretionary have topped up at present. They have not all topped housing payments. We have had a slight increase in up to 100%; some of them have topped up partially. the amount of money for those payments. Have you We would like to see the Scottish Government provide cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
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10 September 2013 Gordon MacRae and Alastair MacGregor
financial support for those local authorities that do top that those are limited by legislation and the powers up so that they are not losing from one part of their granted to our local authorities. In our view, there is a budget to make up that difference. basic business case for the Scottish Government to plug that gap in local authority budgets so that they Q402 Lindsay Roy: Have you had any explanation can with confidence top up by the full 150%. of why some have not been topping up to the maximum amount available? Q406 Lindsay Roy: Do you have information about Gordon MacRae: It is very much dependent on local how many are given a full discretionary payment, how policy makers’ decisions. At this point in time, the many are given 50% or 75%, how many are given a conversations we have had are in places such as Fife, six-month guarantee and how many are given a which has topped up. It wants to make sure that it does guarantee for a whole year? Is that kind of practice not suffer financially any consequences of increased being shared among local authorities? homelessness and other things. Other local authorities Gordon MacRae: On the first point, we do have some have taken an approach that seeks to prioritise figures, based on some research we have been doing discretionary housing payments; Edinburgh, for this week, which I am happy to send to the Committee instance, has published a policy to try to achieve that. so you can see where they all are. There is a bit of a In our view, it would be better to get the money out mixed picture. Some local authorities top up by about there. It is a time-limited pot, and we do not want to 76%, while some top up by 100%. With regard to come to the end of the financial year with money still published policies around whether that is a six-month, sitting unallocated. year-long or ongoing guarantee, again different local We believe that if every local authority can top up, authorities are taking slightly different approaches. In looking solely at the bedroom tax element of this— our view, the most important thing that they can do is bearing in mind that discretionary housing payments make that transparent, so that applicants know what cover more than just the bedroom tax or spare room offer is on the table. subsidy—we could potentially help an additional We have published draft guidance on how we would 6,000 to 8,000 people, depending on how you like to see discretionary housing payments discharged calculate it. A total investment of about £20 million across Scotland. The Association of Local Authority by the Scottish Government would enable every local Chief Housing Officers has encouraged its members authority in Scotland to top up by 150%, as the to look at that favourably. We hope that other local legislation allows. authorities will take it up, but at this point in time there is no national guidance on how discretionary Q403 Lindsay Roy: Could the Scottish Government housing payment should be allocated. legitimately go beyond that? Gordon MacRae: It is not our understanding that they Q407 Lindsay Roy: Are all local authorities could. We believe there are limitations placed on that. involved in means-testing, or just some? Actually, it is the local authorities that have to top up. Gordon MacRae: I could not answer that specifically, What we are keen to do is to encourage the Scottish I am afraid. Whether it is means-testing or just an Government to provide additional funding to local element of prioritising, we have noticed some press authorities so that they can do it. The restriction is on coverage that would suggest that some local local authorities— authorities have taken a means-testing approach. We would need to look further at how that policy is being Q404 Lindsay Roy: Is it within the power of the applied to know for certain whether or not that is the Scottish Government to top that up even further? That case. is the point I am trying to make. Chair: Mike, you wanted to come in on this. Gordon MacRae: As we understand it, it is not within the power of the Scottish Government to enable local Q408 Mike Crockart: We are focusing on what level authorities to top up by more than 150%. of top-up the 14 you talked about are making, and there is a variety, but that must mean that there are 18 Q405 Pamela Nash: I understand that the legislation that are not topping up at all. If we combine that with states that discretionary housing payment, specifically, what Mr MacGregor said previously about looking can be topped up by only 150%, but there are again at decisions because the allocation had changed, examples of local authorities that are creating other it indicates to me that policies are being drawn up on funds to help. They are calling it something different the basis of what money they have decided is to get round that. Is that widespread in Scotland? available, rather than on any other criteria. Could the Scottish Government still provide another Gordon MacRae: I think that is a reasonable fund in order to top up? assumption to make. That is certainly a logical Gordon MacRae: As we understand the policies, what conclusion, based on what has been said. would not be possible are additional funds directly to supplement rent payments. The legislation enables Q409 Mike Crockart: If you choose not to put in as local authorities to top up by 150% to cover housing much as a local authority, there are limits to the costs. Clearly it is within the gift of the Scottish criteria you can actually meet going forward. Government and local authorities to make other Gordon MacRae: Yes. Edinburgh city council, for hardship funds available for other problems that low- instance, which has not topped up, told us when we income households may face but, looking solely at spoke to it that it was going to monitor demand and housing and rental payments, it is our understanding that, if demand outstripped the available funds, it cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
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10 September 2013 Gordon MacRae and Alastair MacGregor would look again at whether or not it chose to top Q414 Lindsay Roy: Is the pragmatic case not to give up. Our view is that, if the Scottish Government can to all local authorities? If, for example, Fife has facilitate that more quickly, so that we can help more prioritised 150% and somebody else has not, the people more quickly and effectively, we should do money has been diverted from there to somewhere that—in this financial year, if at all possible. else. Gordon MacRae: But this would be an opportunity Q410 Chair: Can I clarify a couple of things? You for Fife to recover those moneys and to ensure that have called on the UK Government to “ensure that the services that were planned to be paid for out of them DHP budget for Scotland is proportionately funded.” are not lost in the future. On what basis do you believe that the budget for Scotland might not be fairly allocated? Q415 Lindsay Roy: So you are arguing that around Gordon MacRae: We had some concerns prior to the £20 million should be devoted to that, across the last round of the additional money that went to rural local authorities. areas. Some concerns were expressed to us by local Gordon MacRae: Our calculation, based on the authorities that Scotland was, in fact, losing out maximum that people can top up, if every local proportionately. That would seem to have been authority in Scotland topped up by 150%— addressed through the latest allocation. Our view would be that, in the event that further funds or Q416 Lindsay Roy: That is very helpful, because it exemptions are forthcoming from the UK is clear that otherwise it would have been quite Government, it is right and fair that Scotland ensures discriminatory. that it gets its proportionate share. Gordon MacRae: We would certainly say that a fair distribution of any additional funds that are made available by the Scottish Government would see those Q411 Chair: Yes, but there is the question of whether local authorities that have already taken a decision to or not the share was proportionate in the first place. top up being able to reinvest in the services they had We looked at some of the figures and could see that it to borrow from. looked as if a disproportionate amount of the money was going to some London boroughs. We are still Q417 Lindsay Roy: In something else? waiting for clarification on that, but we understood Gordon MacRae: Yes. Presumably a council that has that that was done on the basis of existing expenditure decided to top up has taken money from another and that therefore, while it was not fair pro capita, it budget heading already. was actually fair in terms of the expenditure levels. Is Lindsay Roy: Absolutely. that your understanding of the position? Gordon MacRae: That would enable them to put Gordon MacRae: That was certainly the basis of the that back. concerns that were expressed prior to the last round of allocations—the additional rural money that the UK Government announced in July. Q418 Lindsay Roy: That would give a uniform, fair approach across Scotland. Gordon MacRae: Yes. That would be our preferred Q412 Chair: So you are now—in as much as it is option. possible for you to be—happy? Gordon MacRae: I am not naturally happy. Q419 Chair: So the £20 million figure has been Chair: That is right, but you are less unhappy than calculated by working backwards from 150% of all you might have been. the ability that local authorities had to top up. Gordon MacRae: Yes. That concern appears to have Presumably, it has not taken into account the been alleviated for the time being. additional allocation that has been made, so 150% of that would be added on top. Q413 Chair: Can I clarify one other point? You say Gordon MacRae: The £20 million does include the that the Scottish Government should reimburse the last round of allocations. local authorities for topping up the 150%. Why do Chair: It does? you take the view that the Scottish Government Gordon MacRae: Yes. should contribute financially to this at all? Surely Chair: Maybe I should note for the record that you there is an argument that this is a local authority were nodding vigorously through that. Unfortunately responsibility, so local authorities should provide the the Hansard writer does not write down “Witnesses money. It is devolved, as it were—decentralised. nodded” or anything similar. That is why we like to Gordon MacRae: Very simply, because they can. make sure that it is caught on the record. I move on There are so many people in need that we think it to Alan, with point 10. is reasonable, especially considering where the future expense increased homelessness often results in will Q420 Mr Reid: It is on discretionary housing be felt—in the health service, the Courts Service and payments. Alastair, you said earlier that you were elsewhere—for the Scottish Government to step in to aware of 175 applications from your tenants for protect not just the individual tenants but the public discretionary housing payments. That was out of 530 services that are in local communities. We think that tenants you believed were affected. Could there be it is pragmatic and that, frankly, there is a strong more than 175, or is it just that you are only aware business case for making that move. of 175? cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
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10 September 2013 Gordon MacRae and Alastair MacGregor
Alastair MacGregor: There could be more than 175, arithmetic would seem to indicate that the council has because obviously the ones I am referring to are enough money to be able to satisfy every applicant. tenants who have come to the offices and got Alastair MacGregor: If you look at the applicants assistance from the association with applications to who come from the association, the level of loss that the discretionary housing payment fund. we saw was £300,000 across a year for these 530 tenants. All that I would say is that I assume that other Q421 Mr Reid: So you do not know whether other tenants from other housing associations are applying people have made the application directly—or do you for DHP as well. There are three other housing think that you would be aware of everybody who has associations in Argyll and Bute, albeit that we are the applied? largest one, so I assume that the council will be Alastair MacGregor: There may be others who have considering applications from those associations as applied outwith the support that we have given. well. I do not know how many applications there are People may have gone directly to do that. from other housing associations in Argyll, but there will be some. Q422 Mr Reid: Has the council told you how many of your tenants have actually applied? Q428 Mr Reid: But if the 50% is a representative Alastair MacGregor: Not for the totality. It has for sample and the amount of money available to the the ones we have been involved in. council has more than doubled, that would seem to indicate that, although the council might not be able Q423 Mr Reid: So there is no way of knowing how to pay the bedroom tax on behalf of every tenant many of the 530 have applied, other than by asking affected, it could pay the bedroom tax on behalf of the council. every tenant who has applied for a DHP. Alastair MacGregor: I can come back and clarify Alastair MacGregor: Against the criteria it appears to that point. be setting itself for assessment, I would argue that that is probably correct. However, as a housing Q424 Mr Reid: Thank you. Of the 175, you said that association, we would argue that any tenant who does 100 had received a decision letter. Do you know how not get a DHP assessment is still a vulnerable tenant long the other 75 have been waiting? and still has the challenge of paying their rent. That Alastair MacGregor: I understand that the one who comes back to other issues that I raised in my has been waiting longest has been waiting since July. submission. I think that in some sense we may have The council has advised us that it is bringing in the lull before the storm. In Argyll and Bute, certainly, additional resources—two new members of staff, I the last four winters have been fairly bad in terms of think—to assist with that particular process, to move weather. I think that for some tenants there will be things forward a bit more quickly. real choices between paying rent and paying fuel bills, and that will be a real test in the second half of this Q425 Mr Reid: Of the 100, you said that 50% had year. On your general point, although we have been successful. Is there a breakdown of the reasons concerns about the bedroom tax, the association that the council gave for rejecting the other 50%? welcomes additional resources to help people. Alastair MacGregor: We do not have that. We talked Gordon MacRae: It is important that we do not lose earlier about policies. I do not speak for Argyll and sight of the fact that discretionary housing payments Bute council, but it obviously has a policy. Under that go to more than just bedroom tax claimants. The policy, it has priorities and carries out a hardship test, Department for Work and Pensions says that so I assume that it will take into view what savings approximately 20% of the total fund should be someone may have and what other income there may prioritised for people who lose the spare room be in the home before it comes to an assessment of subsidy. In present terms, looking solely at the whether or not a payment will be made. The criteria moneys that are available to help people affected, if it measures against are fairly clearly marked out. nobody tops up, there is about enough money to help about one in 18 households affected by the change. Q426 Mr Reid: Do the council’s criteria shed any light on how it actually conducts that hardship test? Q429 Mr Reid: Is that for Scotland as a whole? Alastair MacGregor: They indicate that, before Gordon MacRae: Yes. coming to a conclusion on whether or not someone should receive a discretionary housing payment, it Q430 Mr Reid: As you know, the Government gave will ask questions about income into the home and double the money for sparsely populated rural look at issues around other benefits that may be councils, so presumably the figure for them is much available to the tenant. It has indicated to us that, lower than one in 18. because of the additional resource that has been made Gordon MacRae: If every local authority topped up, available—the increase from £150,000 up to there would be enough money for one in seven. It just £372,000—it will look again at cases it has rejected. shows that, even with a top-up, there would not be enough money—across Scotland, I accept— Q427 Mr Reid: You said that 50% of the applications were successful and that the amount of Q431 Mr Reid: Have you done the calculation for DHP that the Government had given to the council the sparsely populated rural councils that got the had more than doubled. Even a basic grasp of extra money? cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
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10 September 2013 Gordon MacRae and Alastair MacGregor
Gordon MacRae: Not specifically, but we can Gordon MacRae: That is the guidance from the certainly work that out. As I said, it is to do with the Department for Work and Pensions. Discretionary proportion of discretionary housing payments that are housing payments also go to people affected by the to go to the bedroom tax, as opposed to other elements benefits cap and people affected by— of the welfare reforms. Q439 Mr Reid: But the Government gave this extra Q432 Chair: If I have got him right, Alan was saying sum of roughly £200,000 specifically for the bedroom that, if the additional amount of money that has been tax. Are you saying that there is a different rule that given by the Government is topped up by the local stops the council using that for people affected by the authority, that in isolation would be sufficient to meet bedroom tax? all the costs flowing to tenants as a result of the Gordon MacRae: The guidance from the Department bedroom tax. for Work and Pensions to local authorities is that the Gordon MacRae: That has not been our proportion of the discretionary housing payments pot understanding—that there is enough money. made available for bedroom tax claimants is 20% of Chair: So there would still be a shortfall. the total.
Q433 Mr Reid: Can we look at some figures here? Q440 Mr Reid: Is that guidance or a mandatory rule? Alastair, I have written down a figure of £300,000. Gordon MacRae: It is guidance. Am I correct in saying that that is the total loss to your tenants, if there were no DHP? Q441 Mr Reid: So the council can choose to do Alastair MacGregor: If there were no DHP, that something different. would be the yearly loss. Gordon MacRae: Clearly, if local circumstances are different, but money has been added into the Q434 Mr Reid: Do you know what percentage of discretionary housing payments pot at different tenants in Argyll and Bute are your tenants? incremental stages in response to different changes Alastair MacGregor: At the moment, we have 5,100 that have been forthcoming. As it was clear that there tenants. Fyne Homes has 1,600, Dumbritton Housing were particular issues on the spare room subsidy, Association has 450 and West Highland Housing additional allocation was made on that. Guidance was Association has about 700. that around 20% of the pot would be for those households affected by the spare room subsidy. Q435 Mr Reid: So you are more than— Alastair MacGregor: I would say that we are Q442 Mr Reid: I think we have worked out that certainly about 72% or 73% of the RSLs stock in roughly £900,000 of DHP is available to Argyll and Argyll. Bute Council, assuming that it makes the top-up. From the figures that Alastair has given you for the Q436 Mr Reid: What is the total amount of DHP that number of tenants affected by the bedroom tax and the Government are giving the council for this year? your knowledge of housing and how many people are Alastair MacGregor: My understanding is that the affected in other ways, are you able to tell us whether top-up figure is £370,000 for the financial year that £900,000 would be sufficient to pay the bedroom 2013–14. tax on behalf of everybody affected? Mr Reid: If we multiply that by two and half—which Gordon MacRae: Our understanding is that that I cannot do in my head, but I am sure somebody has £900,000 would, in effect, make available around a— £180,000 for bedroom tax claimants. Mike Crockart: It is £926,640. Mr Reid: Thank you, Mike. I am not sure whether Q443 Mr Reid: Yes, but I think this is only a you did that in your head or whether you have a guideline—I thought you said that it was not a hard- calculator. So, £926,000 is available. If the figure for and-fast rule. ACHA is £300,000 and you have 72%, a quick off- Gordon MacRae: We are not aware of any local the-top-of-my-head calculation would indicate that authority that is applying the discretionary housing that would be £400,000 for all the social landlords. I payments contrary to the guidance. know you have the private sector as well. Gordon, if Chair: I can see how this circle can be squared. If all it is £400,000 for social landlords, can you shed any of the money made available through DHP were paid light on an estimate of how much there would be for only to alleviate the impact of the bedroom tax, it the private sector? would be sufficient. However, it is not being paid Gordon MacRae: As I said, assuming a full top-up in solely to alleviate the impact of the bedroom tax, and Argyll and Bute, 20% of that would go to bedroom therefore it is not sufficient to alleviate everything. tax claimants. That is the proportion that is available. That seems to me to be a way of squaring— There are also— Mr Reid: I understood that the extra £200,000 was specifically for the bedroom tax. That is perhaps Q437 Mr Reid: Are you saying that only 20%— something we would need to— Gordon MacRae: Only 20% of the discretionary Chair: That may be something we need to check. housing payments pot is available for bedroom tax- Even so, unless I am mistaken, that would still leave affected households. a gap in terms of meeting the other costs that have arisen. Presumably the benefit cap is unlikely to Q438 Mr Reid: Who said that? affect— cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
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10 September 2013 Gordon MacRae and Alastair MacGregor
Mr Reid: Ten houses are affected. Alastair MacGregor: We support tenants to fill out Chair: So that is unlikely to affect many people in the forms and attend liaison meetings with the council Argyll and Bute. I think it depends on what the to try to ensure that the process is moved as quickly breakdown is in individual areas. This is interesting, as possible, but we have no role in assessment. That but I am not sure that we can clarify much more of it assessment is carried out by a council officer. today without getting information from the individual council—and, indeed, other individual councils. Q449 Mr Reid: Do you have any suggestions that Mr Reid: I was just trying to explore whether the you would make to improve the DHP procedure? money the Government had given was sufficient to Alastair MacGregor: In terms of the current criteria mean that there was no longer a problem for the that the council is operating, which it indicated that it sparsely populated council areas. was going to review, there should be more flexibility Chair: I think this is very technical and very difficult, around the criteria for making funds available, which means that it is an ideal problem for the staff because we saw that early on one in two was not to resolve. We really need to consult, seek to clarify succeeding. If you apply the logic that previously and come back to you for your assumptions. It seems these people qualified for housing benefit, they must to me that we are not going to get this resolved today. have been poor. That is the point that I would make. We could go back and forth. We are all interested in I think it needs to look at those criteria again. trying to get things clarified— Mr Reid: Okay. I shall move on to the next question. Q450 Chair: Am I right in thinking that there are no Chair: Yes, please. I think that is what I was gently objective criteria for the allocation of DHP and that it suggesting. is entirely up to individual local authorities, under a scheme of decentralisation, either to devise their own Q444 Mr Reid: Thank you, Chair—I take the hint. criteria or just to make it up on a case-by-case basis? This is a question for Alastair. Do you know what the In fact, it is entirely possible that the criteria will vary average length of DHP payments to your tenants is? depending on how much money they have available, Alastair MacGregor: The initial indications that we so that, now that money has come in, some people got from the council were that it would range between who previously might not have got it may get it, 13 and 26 weeks. However, in a meeting in August it whereas cases that come in towards the end of the indicated that it would be willing to extend that to the year may or may not get it, depending on whether end of the financial year, when there will obviously they have more or less money? Again, nodding does be a review because of the issues of annuality. not cut the mustard, I am afraid. Alastair MacGregor: My apologies, Chair—I was Q445 Chair: Presumably, if circumstances change, waiting for you to finish. people are obliged to notify the council. Chair: You were posing—okay, I have now finished. Alastair MacGregor: There is notification that people Alastair MacGregor: I would agree with that. There are obliged to do, if there is a material change in an is guidance for DHP in Argyll and Bute that I have individual’s circumstances. brought with me today. On the bottom of page 1 it says: “The main features of the DHP scheme are that Q446 Mr Reid: If people’s circumstances do not the scheme is discretionary and decisions must be change, is there any rule that stops the council made in accordance with the principles of fairness, renewing the DHP, or is it allowed to renew it reasonableness and consistency.” indefinitely if circumstances do not change? Alastair MacGregor: My understanding is that the Q451 Chair: Yes, but you could hardly have a council has changed its position to say that, if scheme that announced that it was based on the circumstances do not change, DHP assessments will principles of unfairness, inconsistency and so on, continue to the end of March this year. Then they will could you? be reviewed again, because I assume that it will have Alastair MacGregor: The point I am making is that to take cognisance of any sums it gets from the that discretion lies within the judgment of the local Department for Work and Pensions for discretionary authority and its priorities. I think there is a wider housing payment for next year. I cannot speak for it, debate in which COSLA perhaps needs to get but that is my understanding of the logic that would involved about DHP assessments across the 32 local apply. authorities in Scotland. That would be helpful.
Q447 Mr Reid: Right. So is it your understanding Q452 Chair: Clearly, that is something that we can that the Government have not yet announced what the pick up as a recommendation. It does seem absurd DHPs will be for any future years? that vastly different criteria can be applied in different Alastair MacGregor: My understanding is that Argyll local authorities and at different times of the year, and Bute council does not know what the DHP depending entirely on how much money the council payment will be for the next financial year. That has available—left over in its parks department structure is based on what it is operating to within the budget, say. It could switch money into DHP in the current financial year. last couple of weeks, if bids were stacked up there and it had surplus money in one of its accounts. It’s a Q448 Mr Reid: Do you have any role in the DHP bizarre way of operating, but I can understand why procedure, other than helping your tenant to fill in local authorities find themselves in that position. I turn the form? to suggestions as to how we can improve. Shelter has cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
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10 September 2013 Gordon MacRae and Alastair MacGregor been listening to this exchange. Are there any to divert resources to deal with this. We have had to particular observations that it would make on this? deprioritise other areas of housing management work Gordon MacRae: On discretionary housing payments, at the present time as a result of this. in particular? Chair: Yes. Q454 Graeme Morrice: What have you Gordon MacRae: As I said, we would like to see deprioritised? everyone top up. We would like to see every landlord Alastair MacGregor: Effectively, at the present time and local authority publish guidance on how it will we have staff who would routinely deal with issues of apply the policy. While we want to see the total pot estate management helping tenants with respect to the spent, we also have to bear in mind that this is a pot bedroom tax, because we have seen it as a business of money for people whose circumstances change. If priority—on two fronts. One is to help tenants in all the money is spent in the first six months and arrears. We are also a housing association that has a someone falls on hard times in January, what access business plan with considerable levels of borrowing; to support will they have? That is why we think that we have £40 million of borrowing to support having a larger pot is a better way of operating. Government grants through other activities. Our As I have also stated previously, we think there is a business plan has to make sure that we get our income good case for the Scottish Government to use what in, so to meet the business case it is important for us powers and resources they have to support local to concentrate resources on helping our tenants to get authorities to make these changes. I made reference to their income in, because that income for them is the Department for Work and Pensions guidance for income for the housing association. local authorities on the use of discretionary housing payments. It has now included a good practice guide. Q455 Graeme Morrice: On that basis, would you We should ensure that that matches well with the suggest that those tenants who are not claiming transparent policies that are published by each local benefits and are therefore paying the full rent may be authority so that—to pick up Mr Reid’s point—we can losing as a result of this, as they are getting less of a see what proportion it is putting into the bedroom tax service? I am sure you are trying your best to provide and the other areas. Is it applying the guidance as set a full range of services; nevertheless, you can work out, or is it changing that to meet local needs? only within the limited resources that you have. Alastair MacGregor: Absolutely—there are short to Q453 Graeme Morrice: I will squeeze in my medium-term consequentials. We have decided that questions before the Division that I believe will be the No. 1 priority for the association in housing called shortly. I want to focus on support and advice management terms is dealing with this issue, because to tenants. I will address Alastair in the first instance. we see it as the greatest issue of vulnerability to our I take it that there is not a shortage of tenants banging tenants; we also believe it is an issue of vulnerability on your door to raise the issue of the bedroom tax and to our business. As I said earlier, we welcome their concerns and anxieties about it. What kind of additional resources coming in, because that will proactive information, assistance and support do you obviously help some tenants, but we are concerned provide to tenants on the whole issue of the bedroom about the uncertainty. The short-term nature of some tax and on the wider benefit reforms? of the discretionary housing payment criteria—the Alastair MacGregor: About 18 months ago, the fact that we are not clear about what next year’s association specifically developed a welfare reform income from discretionary housing payments will strategy in the organisation, because we realised that be—has been mentioned. While the old housing there was a lot of information that tenants would benefit system had faults, there was a degree of require to allow them to prepare for welfare reform stability about housing benefit—you knew you were and we wanted to give advice so that they could try getting it—and you could plan more based on that. to position themselves. Crucial to that is the dedicated We are in an area of some uncertainty at the moment. welfare rights team, made up of four members of staff, That has meant that we have had to change priorities that the association has. Over the last nine months, in housing management terms to try to counter that. their key role has increasingly been to provide advice on the bedroom tax and issues around welfare reform. Q456 Graeme Morrice: If people have financial That activity is about helping tenants with application difficulties in paying additional rent—the bedroom forms and trying to point them in the direction of other tax—they will have financial difficulties elsewhere. funding to assist them in terms of income Do you provide any kind of household budgeting maximisation. We have also invested quite heavily in advice and assistance, or is that something the local giving written advice in newsletters and fact sheets to authority is engaged in? our tenants, to encourage them not to turn a blind eye Alastair MacGregor: I keep saying that I cannot to this and to come in and sit down with the speak for Argyll and Bute council, but I am aware that association. Crucial to that are the changes that I have it has a welfare rights service and supports citizens said we have made to our allocation policy, to try to advice work in the local authority area. I know that give tenants the opportunity to move, if they want to. that kind of advice is available. We as an association, We have been successful in an application to the Big through our welfare rights staff, provide guidance to Lottery Fund to secure just over £296,000 specifically tenants as well. If we see debt issues, in particular, we to fund that kind of work. That has been helpful, but try to point them in the right direction to get them it does not apply to everyone; I am sure Gordon will assistance in those particular areas, as well as to be able to comment on other landlords that have had provide assistance. cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
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10 September 2013 Gordon MacRae and Alastair MacGregor
Q457 Graeme Morrice: Obviously you are a very universal credit will make a bad situation worse. rural and remote community and suffer the Rather than spending our time finger-pointing, we disadvantages of super-sparsity. How do you tailor should be spending our time getting ready for these your services specifically to your community? You changes, so that tenants and those affected get the best will not have local housing offices on everyone’s possible service and the most accurate possible doorstep, so what kind of outreach work do you get information at the point of need. That is why we have into to provide that kind of support in smaller asked the Scottish Government, in particular, to communities when it comes to some of these issues? prioritise strategic investment in advice and advocacy. Alastair MacGregor: Believe it or not, we have a We see that these are changes that will affect a far nine-office network, which is a fair cost to the broader cross-section of society, including many organisation. Out of those nine offices, staff do a lot people in work who are not able to spend time waiting of outreach work. We do a lot of visits to tenants in in a bureau office to get advice, so these services need their homes and a lot of work on the net, by to be available in new ways—online, on the phone communication to people, and we encourage people and in local communities. to come in and see us if they have particular issues— Chair: Can I stop you there? We have just been told or we will go to them. That has been developed as that there is a vote on. We will come back as quickly part of the strategy in the last year and a half to try to as we can. If you do not mind, we will start as soon mitigate and to get out the best-quality advice that we as we have a quorum. We will wait until we have the possibly can. first three—as long as one of them is me. Sitting suspended for Divisions in the House. Q458 Graeme Morrice: What do you do to ensure On resuming— that tenants receive the required advice on this issue before they reach the crisis point? Q460 Chair: Perhaps we could jump to Q14 on our Alastair MacGregor: We have a system in our office sheet; Gordon, I am conscious that you want to leave network that every Monday we do what we call a to catch a plane. Your action plan for Scotland briefing weekly arrears check. If someone has either gone into said that, “Social landlords have expressed concerns arrears or gone beyond the arrangements that they that mixed messages to tenants about the bedroom tax have, we make contact with them, either to go and see means tenants who can pay feel they don’t have to. them or to get them to come in so that we can have This may lead to a culture of non-payment of rent that early kind of intervention. That is effectively what generally.” Could you expand on where the mixed we call proactive housing management. It may simply messages are coming from, and the possible be that someone has forgotten, but it may be consequences? symptomatic of the fact that someone is having a Gordon MacRae: If we go back to the months leading bigger difficulty—it might be a choice between rent up to the introduction of the bedroom tax, Shelter and a fuel bill. We have that kind of early intervention Scotland asked the Scottish Government to convene so that we can try to provide assistance to people at a summit of registered social landlords, councils and that point in time. advice providers so we could get a unified position and give a clear and distinct message about the use of Q459 Graeme Morrice: That is very useful. Gordon, eviction for people who fall into bedroom tax arrears, how do you think that support, information and and so on. That was not possible. The summit did not assistance on this whole issue—not just the bedroom take place, although there were discussions between tax but the wider benefit changes—could be better COSLA and the Scottish Government about how best provided to recipients out there? to address the matters. The representative body of the Gordon MacRae: Prior to the changes coming in in housing associations published its own policies, which April, we were certainly concerned that Scotland as a were complementary but created a situation where whole—particularly the Scottish Government, at the some local authorities, in particular SNP local time—had not done enough to prepare the ground for authorities, came out with a no eviction policy. Other those changes. We wrote to the Housing and Welfare individual local authorities have their own policies. It Minister in November last year proposing that a created the sense that you would not be evicted if you summit of social landlords, local authorities and did not pay your rent. That is very unhelpful to advice providers be convened, with a view to trying landlords. Landlords did not think that our efforts to get a Scotland-wide response here. As an advice were always helpful, because we were keen to see a provider, you face the prospect of trying to support a strong response from the sector that would protect tenant who is navigating one of 32 local authority tenants, and that was represented in some parts of the policies and, potentially, up to 200 social landlord media and by some politicians as the idea of a blanket policies and is trying to know how they would apply, no eviction policy. and the potential for an eviction based on their arrears. Our view is that for bedroom tax arrears it is not in It was very difficult just to be able to provide good- the financial interests of either the tenants or landlords quality advice. to evict the tenant, but the mixed messages came from We have now had the making advice work fund seven local authorities taking one policy, a separate produced. We look forward, hopefully, to being policy being produced by registered social landlords successful in that bid and to being able to provide and other individual policies coming out. We would more advice to affected households soon, but we are hope that in the run-up to universal credit and the also very aware of what is coming down the line. In direct payments we can find a way of speaking with our view, the introduction of direct payments and one voice so that we avoid those mixed messages. 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10 September 2013 Gordon MacRae and Alastair MacGregor are very clear that anyone who can pay should pay Gordon MacRae: No part of this legislation changes their rent, but clearly anyone who is being affected by the tenancy rules as far as taking on a lodger. Some the bedroom tax is already in a situation of hardship social landlords may enable that. I know there has and should be supported to sustain their tenancy in been a move by some local authorities to support that any way possible. approach. To go back to your initial point about whether it is fair, we do not think that someone who Q461 Chair: Do you think social landlords in general is settled in their life should have to take a stranger are working hard and fast enough to anticipate the into their home purely because of a change of policy consequences of tenants falling into arrears? at national level. We know from clear evidence that Gordon MacRae: Some are and some are not. There it is better to focus on the housing circumstance of were very good examples of social landlords getting individuals to ensure they have a sustainable tenancy out there early and knocking on doors to identify to avoid people falling into the trap of homelessness affected tenants. Alastair described earlier taking staff or other housing difficulties. It is yet to be proven to away from core roles to put that in place, but for other us that taking in a lodger plays a significant role in social landlords there are clear benefits to knowing delivering that outcome. their tenants a little better so they are able to respond to their needs. Like any situation, there are good and Q467 Jim McGovern: I do not know whether my bad examples. next question is for both you and Alastair. In the western isles, we heard evidence from various people. Q462 Chair: There is one particular point I want to They said that some people’s lifestyles were pretty pick up. You mentioned earlier the private sector chaotic and, when universal credit comes in and being more expensive for a one-bedroom apartment people are expected to pay their rent, there will be a than RSLs for two-bedroom apartments, and that lot of people in more difficulty. Would you concur applied across a whole number of areas. We would with that? ask you to prove it. Maybe you could send us material Gordon MacRae: Absolutely. We would favour a indicating that that is the position. For those of my flexible approach to direct payments. We think the colleagues who have come in from the vote slightly tenant should be able to exercise a choice—that the late, I have just realised that Gordon MacRae has to payment should be made directly to the landlord. It is be off to catch a plane. Therefore, we have moved to just a pragmatic way to ensure that people do not fall questions that are particularly relevant to him. At this into greater problems, because in many circumstances stage, is there anything in particular that colleagues they are coming from a chaotic and difficult want to direct to Gordon before we give him the background. That would seem to us to be a sensible opportunity to raise with us any additional points? approach that maintains the housing revenue account Fortunately, Alastair is not leaving until the sleeper, of the landlord but also enables the tenant to keep a so we have until about 11 o’clock with him. roof over their head. Alastair MacGregor: It is the highland sleeper. Chair: When does that leave? Q468 Jim McGovern: Alastair, what is your Alastair MacGregor: At 9.26. experience? The various ways in which people are Chair: You have 20 minutes to get there, so we have supposed to deal with this include increasing their until nine o’clock with you. income. One of them is taking in a lodger. What are most people doing? Q463 Jim McGovern: Gordon, earlier you referred Alastair MacGregor: There is a degree of trepidation to the fairness—or, more accurately, unfairness—of among many people about what might be round the this policy. For you, the main factor is that people are corner. As to the issues around direct payments, I being hit by it without having an opportunity even to concur with Gordon. Like it or not, people have been refuse alternative housing. Do you not think it is also used to the housing cost being paid directly to the extremely unfair to expect people to take in a lodger? landlord. That suits them; it suits the housing Gordon MacRae: Yes. For one thing, some social association. That has the potential in future to cause landlords do not allow tenants to take in lodgers, so particular issues about payment, particularly where the there are restrictions on that already. sum is lumped up and there is no access point for the landlord at an early stage to get those sums. That is Q464 Jim McGovern: Even though the Government added to some of the issues I mentioned earlier about have introduced legislation, social landlords can still the uncertainties. Today, we have talked a lot about say, “We don’t care about the legislation; you’re not the bedroom tax. The issue around the introduction of taking in a lodger.” universal credit has the potential to cause more Gordon MacRae: Many social tenants are restricted financial concerns for housing associations in the in sub-letting the property. future because of that particular issue. Gordon MacRae: I would agree with that. Q465 Chair: Is that about me moving out and letting it to somebody else, which is entirely different from Q469 Jim McGovern: This legislation is trying to sub-letting in the sense of bringing in a lodger? encourage people to move to smaller properties—we Gordon MacRae: Yes, but both things are restricted. have heard of the difficulties regarding that—and one of the options is taking in a lodger and earning extra Q466 Jim McGovern: The legislation does not income. What is your experience? What are people override that. doing? cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
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Chair: Jim, if you don’t mind, maybe we can take the private rented tenancy regime that assumes that, for questions to Alastair once Gordon has gone, because as long as someone is paying their rent and fulfilling he wants to leave in a few minutes to catch a plane. their tenancy responsibilities, they would be able to Jim McGovern: Sorry, I didn’t realise what a hurry have security of tenure in that home. The exception to he was in. that would be if the landlord wanted to move into the property themselves, sell it or make it available to a Q470 Pamela Nash: Jim mentioned taking in a member of their direct family. That is very similar to lodger. As a young person at university who comes to the situation in Germany just now where the private London, you realise that outside Scotland the further rented sector plays a far greater role in meeting south you get housing costs go up. Is it not the housing needs, especially for what you might call the expectation of young people to live on their own until mid-market and people who perhaps cannot afford the they get married? Do you think there is a chance that top end of the market but who would find themselves there could be a change of culture in Scotland and locked out of the social sector. Along with other young single people would not expect to get their own reforms around access to a housing tribunal flat or property and might look at living with other programme, rather than calls for dispute resolution, people? and registration of letting agents to improve standards, Gordon MacRae: Shared accommodation is very we think that puts together quite a broad package of different from an existing tenant taking in a lodger. modernising Scotland’s private rented sector to make The changes to local housing allowance to increase it fit for families in the future. the shared accommodation rate to all under-35s is something that has not been given the same degree of Q473 Lindsay Roy: Is there not a potential issue of attention but is now already in place. That also poses child protection in taking in a lodger? some difficulties. Gordon MacRae: Potentially, in some circumstances.
Q471 Pamela Nash: But does that have an impact in Q474 Lindsay Roy: Are local authorities doing Scotland? I see it when I am in London. anything about that? Gordon MacRae: It applies in Scotland, and certainly Gordon MacRae: I am not familiar with what efforts the Scottish Government have expressed the desire to have been made specifically around that issue. increase the availability of shared accommodation. Lindsay Roy: I think it is something we should Shared accommodation, along with forms of follow up. supported accommodation, can play a useful role, especially for people coming from a more chaotic Q475 Chair: I am conscious that you have to leave. background. We do not want you huddling under a bridge The larger point is that we are seeing a generational somewhere in London tonight because you miss your shift in the housing expectations of young people. I plane. Are there any final points you want to make? mentioned earlier Shelter Scotland’s campaign called Are there any answers you have prepared to questions Rethink Renting to try to encourage a greater degree we have omitted to ask? of security in the private rented sector. That stems Gordon MacRae: I think I have had a fair opportunity very much from our observation that for a new to air most of the issues as we see it. For us, the most generation—the jilted generation, as it has been important thing is that we get every layer of termed—the private rented sector is likely to make up government, whether it is UK, Scottish or local, a large aspect of their housing future. It is right that pulling in the same direction to try to mitigate the we address their expectations, in the same way that impact. We would like to see this policy repealed, but this generation looked at the tenancy regime in the we do not want to get too drawn into what the second social sector and housing ownership was expanded in best would look like. We have already indicated where previous decades. How are we going to create a stable we think there are inherent unfairnesses in the way housing platform for people coming out of university the policy applies to people who have no option other and young professionals who now are increasingly than to accept the offers of accommodation provided. reliant on the private rented sector as the only option, The other element we should not lose sight of is what given that they are priced out of owner occupation and preparations we are making across Scotland for the are unlikely to qualify for any form of social tenancy? introduction of the reforms that are yet to come. We need to learn the lessons from some of the failures to Q472 Pamela Nash: You mentioned in your earlier get a unified approach to the bedroom tax so we do evidence that we should be seeking to make private not end up in a situation where tenants are confused rented accommodation more stable. How do we do by mixed messages or inaccurate advice because all that? To me, a council or social landlord is more stable the agencies involved do not find the opportunity to because they have more properties and you get come together. lifetime tenancies. How can you ever get a longer- Chair: Notwithstanding the point that in general you term tenancy in the private sector? do not want to get drawn into efforts to ameliorate Gordon MacRae: It is always going to be different in rather than abolish, that is not our position in a sense. the private rented sector from the social sector, but the We will have to decide whether or not we want to proposals we have put forward are that you would make recommendations for abolition or not, but we modernise the assured tenancy regime and remove the are also interested in the question of amelioration. short secured tenancy. That would remove the six- Therefore, we would ask Shelter to reflect on the month tenancy you have just now and bring in a points raised with you. If you think there is anything cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
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10 September 2013 Gordon MacRae and Alastair MacGregor constructive to add, maybe you get in touch with us. I understand from the local authority that they are We have already asked you to give us a number of keen to use some of the DHP payments to assist points of information following the views that you people with “move payments”—to help them with expressed. Could I thank you very much for coming? that. Again, that may help some people to move if that We hope you catch your plane. In the meantime, we opportunity becomes available to assist them. will return to the remaining victim. Currently, we have housing coming off site. For example, recently in Dunoon we had new-build, one- Q476 Graeme Morrice: Thank you very much, bedroom properties that came back. We targeted Chair. We will try and get this wrapped up by twenty people to move into them from the transfer list who past nine tonight, Alastair, so that you can catch your were caught with the bedroom tax and moved them train. Obviously we have touched on alternatives for into those. These are some of the tools that are within tenants experiencing the bedroom tax in terms of our control and at our disposal. going into smaller houses. We talked just now about taking in lodgers and all the consequences Q479 Graeme Morrice: You mentioned that you surrounding that. From your point of view, what are have adjusted your allocations policy with regard to tenants doing to try and find the money that has to be people in this situation to try and get them into smaller paid to you? Where are they getting that from? Are properties because they are obviously currently under- they making sacrifices elsewhere? What is happening occupying. You mentioned that you awarded an out there? additional 200 points. All that is relative. I do not Alastair MacGregor: The evidence that we are seeing know how you work your system or what the from our staff liaising with tenants on this particular maximum points are that you can get. In terms of issue is that people are making choices within limited allocation of housing, that has to be based on pure household budgets at the present time. As I mentioned housing need. earlier, the big one coming this winter is the issue of Alastair MacGregor: Yes. The reality is that, in order fuel against the issue of rent. I think that will be a big to assist people affected by the bedroom tax, we had issue affecting us this coming winter. to offer the 200 points to all people on the transfer list because not to do that would be regarded as in breach Q477 Graeme Morrice: Clearly people are of legislation. We believe that, in terms of those 200 experiencing genuine hardship as a result of this points, it effectively gives a priority with regard to our bedroom tax. allocation policy. If people want to move and we have Alastair MacGregor: That is what we are the properties available in certain areas at certain experiencing on the ground at the moment in terms of points of time—and they are two big “ifs”—that what tenants are telling us. Clearly, as I mentioned should assist some people because, with the housing earlier—and there is obviously a caveat—we will that we have available, they will come near the top of need to see what happens in relation to the additional the list as a result of that action. That has only been discretionary housing payment that comes through. At brought in within the last month as a result of the this point in time, with one in two rejected by the local policy change. If you ask me in six months’ time the authority in its initial application of its own criteria, it question, “How many people has that helped?”, we effectively means that people have to find that balance could say whether that has been a success or a failure of rent themselves. The fact that our rent arrears have or somewhere in between. gone up by £94,000 would suggest that people are struggling as a result of that. Q480 Graeme Morrice: Have you evicted? Alastair MacGregor: We have not evicted anyone yet, Q478 Graeme Morrice: What do you do if tenants although the association does not have a policy on come up to you and say, “Look, we just really can’t non-eviction in relation to bedroom tax arrears. Our afford to pay this,” and are racking up arrears? You policy is that eviction is a last resort. will have normal procedures with regard to people who experience arrears, but you will have a Q481 Graeme Morrice: You have evicted in the particularly acute problem, bearing in mind you have past—but not over this. just said that your arrears have risen by nearly Alastair MacGregor: Not over this, no. It is a point £100,000. How do you deal with this particular that Gordon was making earlier. From time to time problem of people not being able to pay the bedroom we get people who just don’t pay their rent and turn tax? a blind eye. Eventually, when every other avenue has Alastair MacGregor: With people in those been exhausted, a Sheriff will grant us a decree on the circumstances, we have tried to do a further benefit basis of reasonableness. That test has to be passed. check to see if they are missing out on something that they could get to help them pay their rent. We also Q482 Graeme Morrice: Do you find that most effectively have arrears management plans that we people are working with you to try and resolve that will put into place for individual tenants in order to problem? They have a problem and we all understand set up an arrears payment plan to assist them. For what that problem is. many that will be quite difficult in relation to the Alastair MacGregor: The reason why I think that is pressures that they are under. We will try and look at happening at the moment is because, 18 months ago, that as a way to help and assist tenants. we took a decision to do as much proactive work as I mentioned earlier the policy change we have made we could. Gordon commented earlier that not all in relation to houses and if we can get people to move. landlords have done that kind of work. We had cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
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10 September 2013 Gordon MacRae and Alastair MacGregor decided to prioritise this, so we contacted everyone to Q488 Chair: Maybe I am misunderstanding this. I talk through the particular issues that affect them. At thought that the Govan Law Centre proposal was that the very least, that has helped us in getting people into there would be no eviction as a result of bedroom tax the DHP process. Hopefully, they can come out with arrears. That, in a sense, would be earmarked quite increases in resources and that will ameliorate their specifically. Only that amount of arrears would be circumstances in some way in the future. Today has ignored, as it were, from the point of view of eviction. shown us some trends. In six to nine months’ time we Is that your understanding? will have a much more accurate picture of what the Alastair MacGregor: Yes. There are two things. One real picture is to beyond the bedding-down period. is that when the universal credit system comes in, all arrears are going to be lumped together in that system, Q483 Chair: We understand that the longer we wait, so there is an issue there. The issue then is, if you just the fuller the picture. We also want to try and make take it at its starkest that there is no eviction for the some recommendations for change in the meantime. element of bedroom tax arrears, who then picks up Alastair MacGregor: I agree with that absolutely. that tab for housing associations that cannot effectively collect that money if there is going to be no eviction in relation to that particular issue? Q484 Chair: We are going to have to progress on the Presumably, that debt would then lie with the housing basis of imperfect information. In the note that you associations, and we all have business plans to factor gave us, which I think is very helpful, you do mention that in, as I have indicated here. Islay as being a case study. You say that, of a housing stock of 329, only 66—which is 20%—are one- bedroom properties. What, of course, we don’t know Q489 Chair: Let me come on to that separately from this note is how many people are seeking those because I want to put something to you about that. one-bedroom properties. It would be helpful, for Apart from that question of debt accumulating, is there any reason why that policy would cause you example, if we knew what the number queued up for difficulties? them was. One of the issues that we are probably Alastair MacGregor: going to make recommendations on is the question of It would not cause us difficulties if we could get an assurance that any loss as a result reasonableness and whether or not people have of that could be paid back to the housing association. declined reasonable offers to move, and, also, in that If there is a Government intervention in relation to particular circumstance, whether or not the difference that— between a two-bedroom apartment and a one-bedroom apartment is greater than the 14% of housing benefit that people would lose. That is the question of Q490 Chair: That is the other point I wanted to raise punitiveness as well. with you. We have been told by Gordon MacRae and others that it would not be possible under existing Alastair MacGregor: Chair, there are 19 bedroom tax legislation for the Scottish Government to pay cases on Islay at the present time. That is not the same additional top-ups to the discretionary housing as the number of people who might be applying for a payments. However, it is my understanding that, if one-bedroom property. you wrote off rent arrears caused as a result of bedroom tax difficulties, the Scottish Government Q485 Chair: That is right. The fact that there are 19 could refund that to you or give you equivalent grants. bedroom tax cases doesn’t mean to say that there are In a sense, that is another way of skinning the same twos going for ones. Some of them could be threes cat. If you were in a position where the Scottish going for twos and so on, couldn’t they? Government were meeting any arrears of rent caused Alastair MacGregor: Yes. as a result of the bedroom tax, and you then had the Govan Law Centre proposal about no evictions, would Q486 Chair: We need that sort of clarification, that structure cause you a difficulty? because, if the Government—or the Scottish Alastair MacGregor: As an organisation that is Government—are going to make some sort of minor intrinsically opposed to the bedroom tax, if there was adjustment, we need to back it with facts and figures. a facility that involved the Scottish Government Alastair MacGregor: I will come back to you on that. compensating the association for the loss of income that would then tie in effectively with a no-eviction Q487 Chair: Graeme was asking you a question policy, I am sure my board of management would about eviction. As you will be aware, it has been consider that proposal in a favourable way. proposed that the Scottish Parliament should adopt the legal change being proposed by the Govan Law Q491 Chair: But you would only be enthusiastic Centre, which is about no evictions because of rent about the Govan proposal if it was balanced by arrears caused by the bedroom tax. What is your something that covered any arrears being dealt with. response to that sort of proposal? Alastair MacGregor: Absolutely, Chair; yes. Alastair MacGregor: The difficulty I have, as someone who works for a landlord, is that, if you have Q492 Chair: We have heard before from the Scottish a policy that indicates there is no eviction, my concern Federation about how the difficulties of arrears would be that on the back of that you end up with a building up would affect the cash flow and so on, and situation whereby it may be interpreted as an your power as a borrower to attract further finances. indication that you don’t need to pay rent. Alastair MacGregor: Absolutely. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
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Q493 Chair: That is helpful. I want to look at a management and services that we have signed up to couple of other points. One of the aims of the deliver for our tenants. That is a concern as well. bedroom tax in general, as well as making cuts in expenditure, is to reduce expenditure on housing Q496 Mr Reid: Can you give an example of things benefit in particular. Are there any other alternative that you wouldn’t be able to do if you lost this money? ways of achieving this that you would draw to our Alastair MacGregor: Effectively, income that we lost attention and that we could point out to Government? as a result of increased rent arrears would have a Alastair MacGregor: There are issues with the direct impact on our ability to carry out repairs to our amount of benefit that is paid in the private rented houses, to do cyclical maintenance and to invest in sector. That has been recognised by Government as new heating systems and things like that. being particularly high. That is a particular area that the Government could explore again. I also agree with Q497 Chair: Thank you very much. As before, are Gordon that, if there was greater investment in there any answers that you had prepared to questions affordable housing through construction and new that we have not asked? Are there any additional build and getting people into homes, that should observations that you want to make? reduce the benefit in the long term. People would be Alastair MacGregor: There is the point I made in my less dependent on benefits. There are further options presentation in relation to what happens if the there that should be explored. bedroom tax cannot be repealed. There needs to be more joined-up thinking in relation to consistency of Q494 Chair: I want to clarify the logic of that. I can DHP applications. I think there is a role for COSLA see how there would be savings if people were in in that. The Government should also look at people social landlord rented properties rather than private who have ended up in this situation, not by choice but rented properties on the ground in that the rental because they were under-occupying at an unintended levels, and therefore the housing benefit payments, are point in time. If they were allowed that three-year lower; but I don’t see any other economic gains as a period to work with landlords to get reasonable offers, result of that. to assist them to move and be exempt from the Alastair MacGregor: Of house building? bedroom tax in that set of circumstances, that would Chair: Yes, apart from the general one in the allow housing associations, local authorities and economy about job creation, but it is not necessarily Government to work together in a strategic way to the same people. deal with the impacts it would have on the ground. Alastair MacGregor: Obviously, by building houses, we can tackle some of the other economic issues. Campbell Christie produced a report before he died Q498 Chair: Thank you. I would pick up one point about the benefits of joined-up thinking in terms of about the question of consistency of DHP. I can investing to save money for the future. Where I am understand the merits of consistency across the really coming from is that the Government should country as a whole, but balanced against that is the look at housing as a long-term investment, to make right of local authorities to come to their individual savings in the health service, and issues around decisions and choices. How do you square that circle? education. In my view, overcrowding causes particular Do you think your housing association would prefer issues in terms of attainment for children. Bad housing to have a nationally established set of rules, which also causes problems for the health service, presumably would be flowing from Edinburgh, or to particularly in terms of bronchial issues and issues have discretion? We often hear two different around that. If there was a look across the way and arguments. People don’t want to have the postcode not in isolation, the Government could save money by lottery but, on the other hand, people in rural investing in housing, which would avoid the knock- circumstances want to have a degree of discretion. on consequences of some of the issues around bad You end up arguing that there should be differences housing. dependent upon postcode. Chair: That covers most of the points that we wanted Alastair MacGregor: I could end up arguing both to raise. Do my colleagues have any follow-up points ways here, Chair. I understand the position taken by that they want to raise? the Westminster Government for the 21 local authorities and to give additional resources to rural Q495 Mr Reid: If you lose money because of tenants authorities like Argyll and Bute. My concern the other not being able to pay the bedroom tax, what way is that, if there is not a degree of baseline implications does this have for the association? consistency, you could end up with many vulnerable Alastair MacGregor: We have quite a tight business people becoming more vulnerable because a local plan, Mr Reid. Obviously we have borrowings to pay authority might decide that the maintenance of ancient back and covenants to meet. We have a very tight rent buildings, within its remit, might be a priority in that arrears policy in the association because we believe particular year. There is not an easy answer to that. In that, by doing that, we have a stable business. The my opinion, we are dealing with issues of pretty implications for the association are that, if we don’t severe poverty here. I think COSLA and Government get our rental money in and arrears go up, first, it have to look at a baseline here. There may be could put pressure on the borrowings we have to pay flexibility above that baseline that a local authority back. Secondly—and it is a point that Mr Graeme would wish to get something additional, but that needs Morrice mentioned earlier—it means that we have to to be the absolute line in the sand. There needs to be divert resources from other aspects of housing a baseline agreement that people build from. cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:25] Job: 035419 Unit: PG04 Source: /MILES/PKU/INPUT/035419/035419_o004_michelle_130910 CORRECTED Final.xml
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Q499 Chair: That is helpful. Is that a personal view, Chair: Thank you very much for coming along. That your Association’s view or a Federation view? has been very useful and very helpful to us. I Alastair MacGregor: My Chair may pull my ear later, apologise for the break in the middle because of the but I think the board of the Argyll Community vote, but we had no choice. Housing Association would also share that view. cobber Pack: U PL: COE1 [SE] Processed: [10-12-2013 14:35] Job: 035419 Unit: PG05 Source: /MILES/PKU/INPUT/035419/035419_o005_michelle_131009 CORRECTED Final.xml
Ev 76 Scottish Affairs Committee: Evidence
Wednesday 9 October 2013
Members present: Mr Ian Davidson (Chair)
Jim McGovern Sir James Paice Graeme Morrice Mr Alan Reid Pamela Nash Lindsay Roy ______
Examination of Witnesses
Witnesses: Councillor Matt Kerr, Executive Member for Health and Social Care, Homelessness and Welfare Reform, Glasgow City Council, Morag Johnston, Assistant Director, Financial Services, Glasgow City Council, and Richard Gass, Manager of Social Work Services, Service Modernisation, Glasgow City Council, gave evidence.
Q500 Chair: I welcome you all to this meeting of relationships with the 67 different housing the Scottish Affairs Select Committee. As you know, associations in the city. Some are better placed than we are undertaking an inquiry into the impact of the others to deal with homelessness and some are better bedroom tax in Scotland and looking for ways in placed than others in terms of the effects of bedroom which any of the adverse impacts can be mitigated. tax. Some have been hit with having something like At the beginning, can I ask you to introduce 75% of their tenants affected by the bedroom tax. For yourselves for the record? the smaller housing associations that is particularly Morag Johnston: I am Morag Johnston, assistant bad. In your own constituency, I believe Elderpark director of financial services at Glasgow city council. Housing Association has been hit, with something like Councillor Kerr: I am Councillor Matt Kerr, the 53% of its tenants potentially affected by the bedroom executive member for social care at Glasgow city tax. That is quite significant, particularly for the council and spokesperson for welfare reform. smaller housing associations. Richard Gass: I am Richard Gass. I deal with welfare The knock-on effect on homelessness is that as we rights within the service modernisation section of move people through the temporary furnished social work in Glasgow city council. accommodation, which we get through our partners in the social housing sector, we cannot move them on to Q501 Chair: Before we start taking evidence from permanent accommodation, because the smaller you, I would like to let you know that we have houses are not there. Most people who are homeless decided to go on tour in Scotland, where we will visit are single—that is still the case. Naturally, if we want various locations. We have arranged to go to to move them on, we cannot move them into a place Glenrothes next Friday. We have had a letter from a where they will be in detriment almost instantly and James Dornan, who is an SNP MSP in Glasgow, where the likelihood of that tenancy breaking down is inviting us to have a meeting with the Castlemilk very high. That then leaves us with a logjam in terms groups in Cathcart and so on, so we will do that at of temporary furnished accommodation. It means that some stage. It would be our intention, probably at that we have a massive shortage of temporary meeting, to invite in a number of local organisations. accommodation and are becoming more reliant on The Committee very much welcomes the SNP using bed and breakfast—something that we have engaging with us in this way. Can I start by asking been trying to stop doing for decades. you for an overview of the impact, as you understand All of that means we are spending an awful lot of it, of the bedroom tax on Glasgow? money in the process. The homelessness section alone Councillor Kerr: The overall welfare reform picture of my budget is about £2.5 million overspent this year. in Glasgow is that about £114 million a year will be A great proportion of that is because we are becoming lost to the city economy, so there is obviously a more reliant on bed and breakfast and because of the massive impact in Glasgow. In Glasgow we spend logjam in temporary furnished accommodation. So about £300 million a year on housing benefit. That is that is how it affects me day to day— obviously a substantial sum. An impact on that will obviously make a very big difference to how we do Q502 Chair: I want to clarify that point. As I our business. understand what you are saying, people who are Morag, who is next to me, may be the best person to homeless are being moved into temporary talk about the nitty-gritty of the particular financial accommodation. You have accommodation available numbers, but the biggest thing I am seeing day to day to them outside, but because it would incur the in terms of what I am doing in social care relates to bedroom tax they are unwilling to take it. homelessness, which comes under my remit. There is Councillor Kerr: It is not that they are unwilling to a problem there. The problem is not necessarily a take it. There is a combination of factors. The housing spike in homelessness, but being able to move people associations themselves are reluctant to let them, quite on and through the system. understandably from their point of view, because there As a Glasgow MP, you will be aware that the housing is an increased risk of rent arrears building up. We as stock in Glasgow was transferred from the local a homelessness service are also reluctant to move authority some 10 years ago. We have built up them into those situations, particularly if you are cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:35] Job: 035419 Unit: PG05 Source: /MILES/PKU/INPUT/035419/035419_o005_michelle_131009 CORRECTED Final.xml
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9 October 2013 Councillor Matt Kerr, Morag Johnston and Richard Gass talking about some very vulnerable people who have reform is going ahead without any cognisance being led quite chaotic lifestyles, as unfortunately many given to the housing supply to fit with the policy. The people have. If they go into a situation instantly, as housing supply does not exist to fit the policy. Some soon as they get a permanent let, where they are in concerted effort has to be made with regard to rational detriment straight off the bat, there is all the more planning around housing supply. chance of that tenancy breaking down and of the There may be more potential around discretionary endless cycle that happens in homelessness, housing payments, but I want to emphasise that that unfortunately, of people coming in and out of the would be a stop-gap solution. I am instinctively system—sometimes for years—continuing. If we are nervous about that, because by doing that you are to break that cycle, we need to get people into substituting a system that is reliant on discretion for a permanent accommodation as soon as we possibly system of rights. I do not think that is a sensible way can. It needs to be something settled, where they are to run a welfare system in any country. However, I not in detriment straight away and where they have a recognise that that would be a sticking plaster. chance to grow as a person and to be able to take on the responsibilities required of them. Q507 Chair: Generally, as we go through this, we will identify a number of difficulties. It would be Q503 Chair: Two issues arise from that. First, are helpful if you could also indicate to us whether you you saying to us that there are insufficient single- have identified a possible solution and how the rules person houses available for let? could be tweaked or changed in some way or another. Councillor Kerr: Yes. We got diverted slightly on to the question of homelessness. Could you tell us in general terms Q504 Chair: Secondly—we will come to this later— about the impact of the bedroom tax on Glasgow and presumably discretionary housing payments could the difficulties that are being caused to the council? deal with that shortfall in these circumstances. Richard Gass: I will give some examples relating to Councillor Kerr: Yes; discretionary housing payments people. The bedroom tax is about having an extra are coming into the picture. We can go into this in bedroom, yet many folk upon whom it impacts do not more detail later, but the discretionary housing regard themselves as having an extra bedroom. The payments percentages we are now using to fill the rule for the allocation of the number of rooms, as you gaps created by the bedroom tax are growing know, is that two children of the same sex under 16 massively. We used to spend about £1.5 million on are expected to share. In a household where you have bedroom tax for the traditional reasons, if you like— a 15-year-old studying for exams and a three-year-old people in transition, often coming through the child, on paper they would be expected to share a homelessness system, or particular housing they bedroom. In reality they will not share a bedroom, required to deal with disability and what have you. because if it is a three-bedroom house they will have What has changed now is the proportion. Morag may a bedroom each. That household will not identify be able to correct me on this, but I believe that so far itself as having an extra bedroom. If you look at the we have spent over £1 million effectively plugging private rented sector— the gaps created by the bedroom tax and have spent only some £60,000-odd so far on the more traditional Q508 Chair: Let me take that example. Is the GHA’s reasons for using discretionary housing payments. allocation policy—or the allocation policy that you That tells me that there is something seriously wrong had before the bedroom tax came in—at variance with with the system. We are moving from a system that the criteria used by the bedroom tax in terms of the actually gets decisions right the first time to a system age at which people would normally be allocated a that is more discretionary. That is a fundamental separate bedroom for a child? change in how the welfare system operates. While Richard Gass: I cannot comment on GHA’s allocation there should be room for discretion, we should not policy. I was not aware of Glasgow city’s allocation have a system relying on discretion. policy. I certainly would not regard having a 15-year- Chair: Jim wants to come in on that point. old in one bedroom and a three-year-old in another bedroom as under-occupation. Q505 Jim McGovern: Thank you for coming along today. I am the Member for Dundee West. Quite Q509 Chair: Some other local authorities have recently I had a meeting with council officials. They spoken to us about their allocation policies, and the made it clear that the discretionary housing payment age ranges they use vary from that of the bedroom would come nowhere near the need. Does that apply tax. It is then a question of which moves to in Glasgow as well? accommodate the other. What is your next example? Councillor Kerr: Absolutely. Richard Gass: The rents in the social sector are at a more reasonable level—if I can use the word—than Q506 Chair: Maybe we can come back to that; we in the private sector. If we require families to seek have a section on DHP later on. I raised it only in the smaller accommodation and that accommodation is context of that particular issue. What is the solution to not available in the social sector, they are then driven this problem of the homeless that you have identified? to the private sector where, ironically, the rent for the Councillor Kerr: There are a number of solutions. To smaller property will more than likely exceed the rent be straightforward about it—although this is not a of the property they have just left. We talk about straightforward thing to do—the issue is housing solutions, but this seems to be a problem that will cost supply. I am sure you have heard this from others. A housing benefit expenditure rather than save money. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:35] Job: 035419 Unit: PG05 Source: /MILES/PKU/INPUT/035419/035419_o005_michelle_131009 CORRECTED Final.xml
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Q510 Chair: Do you have examples that you can let room, the rules as they stand expect that they would us have? You do not need to read all of them out just share. The Government made a concession in light of now, but it would be helpful if you could the Gorry decision that where disabled children were substantiate that. unable to share, it would be reasonable for them to Richard Gass: There is one particular one. In the have their own room. The same logic should be private sector, rents are determined by the local applied to adults. If adults are unable to share because housing allowance, which is at the 30th percentile. For of disability, they should be afforded a bedroom each. a two-bedroom property in the private sector, housing benefit would be permitted up to the level of £115.38. Q517 Chair: You say “unable to share,” but If we take Maryhill Housing Association as our presumably there is not an objective definition of model, you are looking at in excess of a six-bedroom “unable”—or can one be devised? The danger there is property in the social sector. A one-bedroom in the that it comes down to a question of discretion again, private sector is £91.15. That would afford a rent in doesn’t it? It might not be desirable to share, but the social sector of perhaps a five-apartment property. “unable to share” is really a different end of the spectrum. Q511 Chair: Can I be clear about whether you are Richard Gass: There will be some where it is a matter comparing like with like? If you are taking the of fact that they are unable to share—where perhaps cheapest of social housing and the poshest of private it is a breach of someone’s human rights and personal housing, of course there will be a discrepancy. dignity. Would it be reasonable to expect two adults Richard Gass: These are the LHA figures. These are th to share if one had episodes in the night where they the 30 percentile of the rented properties, so it is were violent or if somebody had nightly incontinence? certainly not at the upper end. We are talking about Would it be reasonable for someone to share that bed? the 30th percentile, which is the Government’s stated point for marking the rents. Q518 Chair: Is it the council’s view that a set of guidelines could be developed about what was Q512 Chair: Again, it would be helpful if we made reasonable in these circumstances, so that people were sure that we had that in writing. So what is the given some clear guidance about what to expect? I am solution to that? anxious that we do not come out with something that Richard Gass: If someone were going to be afforded is vague and woolly, so that again it ends up being a level of rent to rent in the private sector and were grey and vague. Do you feel there is something that then afforded the same level of rent to rent in the could be said that would make clear the circumstances social sector, we have the solution. The reality is that in which somebody was entitled to have a separate the rent in the social sector will be cheaper, so there bedroom because of disability? will be a saving to the taxpayer. Richard Gass: Yes, I would say that is so. Q513 Chair: So there would be a saving to the taxpayer if we left them in the social sector rather than Q519 Chair: Are there other examples? You had moved them into the private sector, even though that better have a lot. was a smaller house. Richard Gass: There are examples that come to light Richard Gass: Yes. because of another matter that arises. If we take a scenario of a couple with a grown-up son living with Q514 Chair: Presumably the recommendation from them in a two-bedroom property and the father in the us should be that in circumstances where the cost in house is in receipt of disability living allowance, they the private sector will actually be greater, the bedroom will be exempt from non-dependant deductions. If, tax in the public sector should be ignored or waived however, on the migration to personal independence in some way. payment the father is not successful in securing Richard Gass: That would be a solution. personal independence payments, they will be exposed to non-dependant deductions. The level of Q515 Chair: Is that something that could be dealt income of the son will then be relevant. If he is with by discretionary housing payments? earning, say, £250 a week, the deduction that will be Richard Gass: Again, the problem with discretionary applied to the parents’ housing benefit will be £70 a housing payments is that these are discretionary week, so they may in turn decide that it is time for payments rather than rights. It does not give the tenant the son to move out. If he moves out and that leaves the knowledge that they are entitled to that money. an empty bedroom, they are then exposed to the They may get a discretionary housing payment for a bedroom tax. period of time. There is the anxiety about what happens at the end of that period and whether there Q520 Sir James Paice: To get clarity, where do you will be sufficient money, whereas if it is prescribed in get the £70 deduction from? rights a person knows where they stand. Richard Gass: It is actually £70.40. There are non- dependant deductions that are applied to the housing Q516 Chair: What is the next one? I thought you benefit where you have another adult in the household. had a number of examples and that it was worth while The non-dependant deductions are determined by the going through them one by one. level of income of the son, daughter or non- Richard Gass: Yes, there are further examples. In the dependant. The example I cited was where someone case of disabled adults who are unable to share a was earning £250 a week. cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:35] Job: 035419 Unit: PG05 Source: /MILES/PKU/INPUT/035419/035419_o005_michelle_131009 CORRECTED Final.xml
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9 October 2013 Councillor Matt Kerr, Morag Johnston and Richard Gass
Q521 Sir James Paice: But that is not a spare room you have is a circumstance where the individual has subsidy or bedroom tax, if you— to have a notification from housing benefit officials Richard Gass: No, but in that situation it is likely that saying, “You are subject to a reduction.” That is the the son or daughter would choose to move out—or regulation. They then have to come back and say, be asked to move out—because their presence would “Can I apply for a discretionary housing payment?” completely obliterate the housing benefit, if it is a By its very nature, that is discretionary. Again, you social sector rent. When they moved out, you would have to go through a two-stage process. It is unclear effectively have a spare bedroom. to us why that could not just have been built into the regulations to avoid that for those individuals. Q522 Sir James Paice: Yes, you would then get the spare room subsidy deduction, but I am puzzled as to Q526 Chair: To some extent, to be fair to the where this £70 is coming from. Whatever phrase you Government, they are making this up as they go along. want to use—spare room subsidy or bedroom tax—it As with anything new, there will be adjustments made is not £70. as it beds in. If you are identifying ways in which the Richard Gass: No. That is not the bedroom tax; that process can be made better or easier, we would very was the non-dependant deduction. If the son leaves much welcome those. However, I want to be clear, the house in an attempt to alleviate the non-dependant because you said two things that interested me. First, deduction, they will leave an empty bedroom in the the bedroom tax impact on Glasgow in total is £9 property and the bedroom tax will then be live. million. Morag Johnston: Yes. Q523 Sir James Paice: Which would be at whatever the rate was. Q527 Chair: Secondly, you said that there were a Richard Gass: On a £75 rental, it would be £10.40 a number of changes to regulations that had been made week. This shows that when someone leaves home it on an ongoing basis. Two points arise from that. One is not an absolute. People will come back. When sons of them is the question of appeals and notification. Do and daughters grow up they may go off to college or people all know that these rules have changed and that university, but there will be an expectation that their they can therefore appeal, or is there a danger that bedroom will still be there for them to come back to these new rules will be applied only to cases that arise at weekends or holidays. The bedroom tax does not after the changes were made? compensate for that. Those are the three main Morag Johnston: I think that is a very real danger. examples I wanted to give. Although we will try our best to identify the individuals who may fit those circumstances, we as a Q524 Chair: It is helpful to have those. You were local authority just will not hold some of the going to give us figures. information. For example, for foster carers we may Morag Johnston: For context, the estimate of the loss not necessarily know, as they may not be a foster carer in housing benefit as a result of the spare room for our council. You are relying on that individual subsidy in Glasgow is around the £9 million mark. somehow being made aware that they can apply for Originally we thought it was going to be higher, but an additional room in that circumstance. Obviously very late on in the guidance that has been issued by we will advertise that through our literature and the the DWP there were a number of circumstances where normal information that goes out, but there is a real individuals are now entitled to an additional room. risk that people are not aware of it. From a process perspective, that means you are We are seeing that in our discretionary housing effectively considering them under the spare room payment allocation awards. There was a real steer subsidy regulations first. They will then come back from the DWP that we should use discretionary and appeal or apply for an additional room. It is a housing payments in circumstances where adults very convoluted process, because they have to get the needed two rooms but the spare room subsidy meant deduction for the spare room subsidy and then come that they would have a deduction. Those individuals back and say, “No, here are my circumstances.” For were encouraged to apply for the DHP, but we are example, there may be disabled children. They are seeing very few people in those circumstances coming then given an additional room. That caused us a lot of through and applying for DHPs. Again, as a local difficulty. It has helped in reducing the value of authority we will not necessarily know who would be deduction to individuals, but it is not the more eligible. You are relying on your advice network and straightforward process. your welfare rights officers. I know that many RSLs in Glasgow are very proactive in engaging with their Q525 Chair: Is there a more straightforward process tenants and encouraging them in those circumstances, that is possible going forward? but I have no doubt there will be individuals who will Morag Johnston: The regulations have just changed not be getting everything they are entitled to either so that those additional room entitlements are built directly through the housing benefit regulations or, directly into the legislation and we do not have to potentially, through a discretionary housing payment. encourage people to go through that second process. Following on from what Richard was saying, it is a Q528 Chair: The point that arises from that is the similar scenario with the examples of disabled adults. second point, which is the question of arrears. If the Local authorities have had guidance from the DWP rules change, is that backdated to the date that the to say that we should use our discretionary housing bedroom tax came in, or is it live only from the date payment fund in those circumstances, but again what that the change was made? If somebody finds out cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:35] Job: 035419 Unit: PG05 Source: /MILES/PKU/INPUT/035419/035419_o005_michelle_131009 CORRECTED Final.xml
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9 October 2013 Councillor Matt Kerr, Morag Johnston and Richard Gass about that some way down the line, is it then that back either to the date when the new rule came in backdated either to the beginning or to the date that or, presumably, back to the beginning, if you wished. the change was made? Richard Gass: I think I may have misled you slightly. Morag Johnston: I think we would have to rely on I was referring to where a court or tribunal clarifies the regulations to see when we were first advised of a what the law is. If you are talking about a change in change. With normal housing benefit regulations, you legislation, it would be open to the legislator to say are limited to the date that you are initially advised. that the change would have retrospective effect. They What we might have to do in that circumstance is could bring it in from today or from a future date. apply a DHP for the period prior and then award the They could bring it in retrospectively. housing benefit from the date from which they were eligible. In that circumstance, it would be helpful if Q533 Chair: If I understand this correctly, the DWP there were a bit more flexibility in allowing us to is making changes in the rules as we go on. I want to backdate. The rules around backdating housing benefit be clear about to whom that applies. We discussed are very tight now. There are very few circumstances earlier how some people might have difficulty finding where you can backdate housing benefit. out that it applies to them, because you might not know and be able to apply it. If they are aware of it Q529 Chair: Particularly at the moment, when it is three months down the road and then apply for it, does almost an iterative process and the Government are it get backdated? If it does not get backdated, could making amendments, a recommendation that any you give it them backdated under DHP? I just want changes as a result of experience should be backdated you to be clear about what the discretion is. to the beginning would appear not to be unreasonable, Richard Gass: Where someone has a housing benefit wouldn’t it? Leaving that aside, if there is a change entitlement, if they bring forward evidence that their made and somebody finds out about it quite a way entitlement has been incorrectly assessed, there will down the line, can that be backdated or does their be scope to correct that. application only take place from the date that they apply? Q534 Chair: “Incorrectly assessed” implies that you Richard Gass: I think you are referring to a bit of the made a mistake at the time you were calculating it. legislation that is referred to as the anti-test case rules. This would be a situation where it was correct at the If someone challenges a decision and the challenge is time it was calculated, and therefore it was not successful, that person gets their money back. People incorrectly calculated, but where a change has who then learn of that challenge and come forward happened to the rules subsequently. after the challenge will not get it all the way back; Richard Gass: That would depend on the wording of the legislation. If the legislation says that from this they will get it only from the date that they apply. particular date it will now be acceptable to have an extra bedroom— Q530 Jim McGovern: When you say that somebody applies and that leads to other people applying, is it Q535 Chair: So it is perfectly reasonable for us to retrospective for the first applicant? say that, where the Government are making changes Richard Gass: If the first applicant is presented with to the bedroom tax because they are discovering a decision and they challenge that decision, if they are things, people should not be penalised, and that successful, the decision is reversed in their favour and whenever somebody makes an application they should they will get their arrears of benefit. Anybody who have it backdated to the date when the rule was learns of that case and makes a similar application or introduced. Indeed, is it reasonable to say it should be a similar challenge will be okay. The people who backdated to the beginning of the bedroom tax? come along afterwards, when they learn that the law Sorry—we do not record nods. You are therefore has now been interpreted differently, cannot pick it up obliged to say something. and say, “This applies to me; can I get all the money Councillor Kerr: Yes. I have missed out on?” The answer would be, “No, you can’t have all the money you have missed out on, Q536 Chair: What is common practice—back to the but yes, that does apply to you from today.” change or back to the beginning? Councillor Kerr: Back to the date of the bedroom tax Q531 Jim McGovern: Why would that be? coming in. That would be the sensible thing to do. I Richard Gass: Those were the rules that were would imagine any Government would be willing to introduced a number of years ago. It was to limit the cut people a bit of slack on this and say that when backdating of benefits upon the outcome of test cases. you introduce a new policy there are sometimes things that you learn as you go along. That is not Q532 Chair: In those circumstances, given that you unreasonable; it happens in local government, too, have discretion, is it correct that you could, if you believe it or not. It is perfectly rational for this wished, give discretion back to either the beginning Committee to recommend that the Government take or the date when the policy changed? When the on the learning that they have already acknowledged bedroom tax comes in—when a new rule is and apply it from the beginning. I do not think we can introduced—and then when somebody is aware of the really argue with that. new rule, as I understand it, they would become eligible for the money only from the date when they Q537 Lindsay Roy: Can you tell us how many applied. However, you would have discretion to give appeals and challenges you have had and how that cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:35] Job: 035419 Unit: PG05 Source: /MILES/PKU/INPUT/035419/035419_o005_michelle_131009 CORRECTED Final.xml
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9 October 2013 Councillor Matt Kerr, Morag Johnston and Richard Gass has impacted on your staffing in Glasgow city? For Q543 Jim McGovern: A number of tenants have example, have you had to take on extra staff? appealed successfully on the basis of a disability Morag Johnston: To date we have had about 700 where the so-called spare room is used to keep appeals against the bedroom tax, out of about 13,000 equipment in. You also mentioned foster carers and, people who have had it applied. We are working our possibly, armed forces personnel returning to their way through that process. We have to date made parents’ home or whatever. What are the implications submissions in 180 cases. We have not taken on extra of these successful appeals for councils? staff. I am sure you will be aware of the difficulties Morag Johnston: There has been one very recent case that all local authorities are facing in the current in Glasgow. It is the first case that went to first-tier environment. We are having to take resources from tribunal, and we lost the case. It was a circumstance other parts of the business, which effectively means that Richard Gass has already mentioned, involving a that the processing times for new claims and changes disabled individual who was married. Because of the can be affected. equipment that she needs for her disability, her husband is physically unable to share the bedroom; it Q538 Lindsay Roy: How many of the 180 have is just physically impossible for him to have a bed in been successful? the same room. The rules of the bedroom tax are that Morag Johnston: Of the 180, only 38 have made their they were subject to a 14% reduction in their way to the first-tier tribunal stage. We have won two housing benefit. of those 38, lost one and the remainder have been The implications for us are that we will go back and withdrawn or struck out. We are waiting on seven still change that actual calculation. We will remove the to come through. The council has submitted 180, but spare room subsidy and she will go back on to housing they are now at the first-tier tribunal. We are waiting benefit, but it does not set a precedent. We know that for it to give us dates. there are other cases that are very similar, but that ruling does not allow us to go back and change them. Q539 Lindsay Roy: Have you had any that have We need to continue to put those cases through the been resolved because a mistake or basic error has appeals process. been made? Morag Johnston: There is a process before we would Q544 Jim McGovern: I am intrigued by that. Why get to first-tier tribunal where there is a review. In does it not set a precedent? those circumstances, another officer would consider Morag Johnston: I suppose those are the legal terms the case. I do not have the number of reviews where of that particular decision. The decision that is taken we have changed the decision. at first-tier tribunal is a decision in that particular case only. It does not change the wider regulations. Q540 Lindsay Roy: There will be some, but not a huge number. Q545 Jim McGovern: So, for example, Morag Johnston: There will. The way the bedroom hypothetically you could have two families living next tax worked was that back in October the local door to each other where one family appeals and wins, authority had to write to RSLs and ask them for details but the other does not get any benefit because they of the number of bedrooms in each of their properties. have not appealed. That was obviously information that we needed to do Morag Johnston: That is correct. the calculation. The tenants were then notified of that Lindsay Roy: Not until their appeal is heard. from April this year. In going through that process, there have been a number of changes. The tenant may have queried with the landlord, “You are saying this, Q546 Chair: On the face of it, that seems absurd, but you’ve told the council that.” There have been a doesn’t it? lot of recent changes as well. Jim McGovern: It does to me, yes. Councillor Kerr: My understanding of it—Richard Q541 Lindsay Roy: Has one of the challenges been might know better than me—is that it does not set a whether the room is big enough to be called a precedent until there is a second-tier appeal. bedroom? Morag Johnston: From a council perspective, we are Q547 Chair: In that case, it would not go there, quite clear that it is not the local authority’s would it? If somebody has won their first-tier appeal, responsibility to determine whether a room is a they are not going to say, “Well, I am not satisfied bedroom. We will rely on what the RSL tells us is the with winning; I want to take it higher.” nature of their contract with the tenant. Councillor Kerr: It would not be the person who Lindsay Roy: Thank you very much; that is very appealed the second time round—it would be the helpful. council or the DWP, which would appeal against the first decision. Q542 Jim McGovern: What is an RSL? Morag Johnston: Sorry—a registered social landlord. Q548 Chair: It would make the council look like the Jim McGovern: I do not speak fluent TLA. bad guys if it appealed against a decision in these Chair: If there are no other introductory points you circumstances, wouldn’t it? want to make, we will go on. Councillor Kerr: It certainly would. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:35] Job: 035419 Unit: PG05 Source: /MILES/PKU/INPUT/035419/035419_o005_michelle_131009 CORRECTED Final.xml
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9 October 2013 Councillor Matt Kerr, Morag Johnston and Richard Gass
Q549 Chair: Unless it was simply doing it in order everybody you are aware of, so that you can apply to waste the time of the second-tier tribunal and it unilaterally? hopefully get the same result. Richard Gass: If it goes to the upper tribunal, it Councillor Kerr: My understanding at the moment is clarifies that that is what the law is—that there are that it is not the council’s intention to waste anybody’s now certain circumstances that need to be taken into time on this. consideration when working out whether or not adults are expected to share. What would councils then do? Q550 Chair: The downside of that is that it does not We would know of anybody who had appealed under set a precedent for anybody else. similar circumstances, so those decisions could be Councillor Kerr: You are right, but we are not the looked at again. A progressive authority might choose only people who can appeal here. We are waiting to to write to tenants they believed this might affect find out what the DWP wants to do. inviting them to come forward.
Q551 Chair: But if the DWP’s interest is in Q555 Chair: But a reactionary authority might not. minimising its expenditure, presumably it is in its Would it be entirely at the discretion of the local interest not to appeal this, because in the event that it authority whether it made any efforts to make people loses it sets a precedent. It is in its interest, aware? There would be no obligation on the authority presumably, if it wants to minimise its expenditure, to to go back through its books and apply this new rule force individuals to apply one by one and hope that a to people who would benefit. lot of people do not. Is that correct? Richard Gass: In this situation it would be difficult, Councillor Kerr: There is a logic in that, but I am because the local authority would not have enough told it is considering it. information about the circumstances within the house. In some situations a change in the law might be Q552 Lindsay Roy: I understand there are cases apparent from information held, in which case an where the DWP is appealing, not in Glasgow but in authority could apply it, but in this situation I would Fife. That is just a point for clarification. not imagine that local authorities hold sufficient Councillor Kerr: I can understand completely the information. logic of the Chair’s argument. It does not make complete sense to me for the DWP to appeal it. Q556 Lindsay Roy: Would it be true to say that local However, it seems to me that it fits into a wider authorities have to be ultra-cautious and not disburse narrative in terms of what I am seeing at various the full amount in case there is an appeal and they meetings I go to with DWP officers who actually have have to disburse money in relation to that appeal? to get this job done. Frankly, they want clarification on Councillor Kerr: Morag may be the best person to how the rules work. The relevant DWP officer might deal with this. choose to go down this road in order to get clarification so that they can do their own job better. Q557 Lindsay Roy: You would not disburse your Richard Gass: If I can follow on, in practice what full budget. will happen if the DWP does not appeal is that the Councillor Kerr: There is an issue about how cautious same arguments will spread like wildfire through we have had to be on how we have approached a welfare rights circles and other claimants will come whole number of things—not just DHP but things like forward making them. If their cases succeed at the Scottish welfare fund, although I know that is not tribunal, that is a good outcome for the individual, but in focus today. As things have changed, we have also ultimately along the way one case will not succeed. had to change as far as we can within the rules how In that case, the appellant will be supported to appeal we disburse those funds. I think Morag can go into it to the upper tribunal. more detail. Morag Johnston: Just to clarify, local authorities have Q553 Chair: I understand that. The issue here is that to award housing benefit in line with the regulations the encouragement or signal that is given to that the DWP sets down, because the way it works is everybody else is that they should go through the first- that we pay the money out and then have to claim it tier appeal mechanism in order to win their case, back from the DWP. If the DWP found that we had which takes up a lot of time and money for staff not awarded housing benefit in line with its involved not only in the first tier of tribunals but also regulations, it would withhold that money and, for the people who take the appeal, and puts stress on effectively, the local authority would be out of the individuals involved. It would be much easier if pocket—it could not claim it back. We have to make in these circumstances, once a precedent has been these decisions in line with the regulations as we see established at the first-tier level, that is just a them. In that particular scenario, if we apply the spare precedent across the board. room subsidy, although we know this precedent has Councillor Kerr: I agree. been set, we will have to continue applying the deduction in line with those rules. If we do not, the Q554 Chair: I come back to the question—to be DWP can come along and say, “That’s outwith the clear for the recommendations that we will make—of regulations and we are not giving you the money back what implications there are if the DWP appeals this for the housing benefit.” and loses, and therefore it is a precedent. Is it then a precedent only for those who come forward and say, Q558 Lindsay Roy: The general point I am making “I am in these circumstances,” or is a precedent for is that it puts a limit on your discretion. cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:35] Job: 035419 Unit: PG05 Source: /MILES/PKU/INPUT/035419/035419_o005_michelle_131009 CORRECTED Final.xml
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9 October 2013 Councillor Matt Kerr, Morag Johnston and Richard Gass
Chair: On something like that, surely you do not have where there is a reinterpretation or a change in the any discretion. That is the issue. If they do pay out in rules, it should go back to the beginning and be line with the ruling, the money is recovered from the backdated. DWP. Only if you are talking about DHP does the Morag Johnston: Yes. question of discretion on spending the budget come in. Morag Johnston: An appeal is generated by the Q564 Chair: There is nothing wildly unreasonable claimant. They will normally generate a request for an about that of which you are aware, is there? appeal because we have awarded less housing benefit. Councillor Kerr: Not at all. I cannot see why there In that circumstance we are obliged to take that to the would be any opposition to that. If the Department first-tier tribunal. has taken on this learning and says we can adjust the Lindsay Roy: I understand that. regulations as we go, it accepts that these regulations Morag Johnston: It is at the second stage that we will are now correct, so it would make sense that it would take a view on whether we think it is in the council’s have started with them in place, if it had known what interest to take it to the next stage and whether we it knows now. I think it is absolutely rational that it have a chance of winning. takes the position to have them retrospectively.
Q559 Jim McGovern: I go back to the analogy I Q565 Graeme Morrice: The reason cited by the mentioned earlier about next-door neighbours, both in Government for the introduction of the bedroom tax similar circumstances and both claiming housing is to contain housing benefit expenditure and to cut benefit, where one appeals and one does not. The the DWP budget overall. Could you quantify the appellant wins but the next-door neighbour, just financial loss to social tenants in Glasgow through the because they did not appeal, does not get any benefit introduction of the bedroom tax? from that. They have claimed it but been refused it. Morag Johnston: The bedroom tax is estimated to In that case, why should they be refused it? result in a reduction in housing benefit of £8.5 million Councillor Kerr: You cannot really argue with that in 2013–14. logic, I have to say. The way to sort that out is by an adjustment in the regulations and for it to be tested at the next stage, to set the precedent so that the Q566 Graeme Morrice: Has there been any kind of regulations can be changed. That way, as we go, we shift in terms of housing benefit expenditure on can flush out these anomalies. Until that happens, we tenants of social landlords and private tenants with are stuck in the middle. regard to the fact that you may have had some social tenants moving into smaller private properties so they Q560 Jim McGovern: As the Chair said, if the are not affected by the bedroom tax? Have you seen appellant wins the case, where would the logic be in any kind of shift there in terms of your housing their saying, “I’m going to take this to the second tier benefit budget? so that my next-door neighbour gets theirs, too”? Morag Johnston: We do not have any information to Councillor Kerr: The understanding is that if it were suggest that yet. The only point I would say is that we appealed to the next stage, it would be appealed by are about six months in, so it may be too early to either the DWP or the council, because theoretically gauge whether that is actually happening. the original appeal was against the council’s decision, Councillor Kerr: There is some anecdotal evidence which is a kind of proxy for the DWP’s position. If it around that, but that is all we have at the moment. As went to the next level, it would be an appeal by either Morag said, we are waiting for more information to the council or the DWP. In this particular case, I do come through as we go, but there is certainly not believe the council intends to appeal at this anecdotal evidence. We can see some of the moment. I know the DWP is considering it. movement going on with the level of private rents. If the market is operating properly, as demand goes up, Q561 Jim McGovern: But would it not help the price goes up. The prices are certainly going up. thousands of tenants if the council did appeal it and lost it? Q567 Chair: If the overall benefit payment goes up, Councillor Kerr: If we are going to be brutally that could be an indication that the bedroom tax is honest, it would be more helpful if the DWP appealed effective because it is moving people out of under- it and lost it, but there you go. occupied property in the public sector into more expensive, appropriate-level property in the private Q562 Chair: I remain slightly unclear about one sector. question. If it is appealed and lost again, and is Councillor Kerr: You would say it was logical if the therefore the new rule, is that then backdated? aim—I do not necessarily agree with it—was simply Morag Johnston: That would be at the discretion of to move people into what is deemed to be appropriate- the DWP. Our expectation in that scenario is that it sized accommodation. But if the aim is to save money, would then amend its regulations and issue that to I am not convinced that money will be saved through local authorities. It would be as part of those this. If the aim is purely around accommodation, there regulations that the DWP determined from what date could be some logic around that, but that works only that change was implemented. if the accommodation is available. Even in the private sector in Glasgow there are limits on accommodation. Q563 Chair: We will obviously have to take a For single men under 35, who are able to claim only decision on this, but it is reasonable for us to say that for a room, there is a serious problem in Glasgow. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:35] Job: 035419 Unit: PG05 Source: /MILES/PKU/INPUT/035419/035419_o005_michelle_131009 CORRECTED Final.xml
Ev 84 Scottish Affairs Committee: Evidence
9 October 2013 Councillor Matt Kerr, Morag Johnston and Richard Gass
There is huge pressure on HMOs in Glasgow and being forced out of the areas where they were born HMO licences. and raised. We all understand that even those of us Anyone who is familiar with Glasgow and its who are lucky enough to own our own homes cannot tenements will be familiar with the idea that nobody always necessarily live where we would like to live. particularly wants an HMO in their close. There is Most people are sensible enough to have that huge pressure around that. Naturally, with Glasgow understanding, but there needs to be some being the big city, people from around Glasgow who understanding of social housing. find themselves in that situation are more likely to Social housing serves a social purpose. The social drift towards the city to find these rooms. I believe purpose is holding communities together and bringing there is a real problem in the making there. If you people into areas in which they would not otherwise accept it is about sorting and distribution of square be able to live if the market were allowed to run free. footage, you have to make sure the square footage is Because of that, I think this undermines the whole available, and it is not available in the social sector. ethos of social housing itself. For that reason, I have There are huge constraints even in the private sector, a problem with the entire policy. However, if you particularly for single use. wanted to look in purely rational terms at how to make the policy work, that would certainly be a step in the Q568 Chair: You can prove that, can you? You have right direction. the figures. Chair: We have taken the view that whether or not Councillor Kerr: Yes. the bedroom tax remains is a question for Parliament as a whole and for the next general election. In the Q569 Chair: It would be helpful to have that, if we meantime, we are trying to identify where there are have not already got it. One of the issues that a whole difficulties and how these can be mitigated or string of people have raised with us is that there is a overcome by movement, by additional spend or in shortfall in smaller-sized properties and so on, and other ways. that the number of people who would want to move cannot be accommodated because there is not enough Q571 Sir James Paice: I want to come back to some single-person accommodation, in particular, available. of the figures. I think you said earlier that the total Councillor Kerr: I will get the exact figures to you; I anticipated reduction in housing benefit in the city am happy to do that. If I remember rightly, the biggest would be £9 million. Then I think you said it would social landlord in the city—Glasgow Housing be £8.5 million. I assume it is the same figure. Association—had about 6,000 people potentially Morag Johnston: Yes. affected in GHA accommodation and only 600 houses available that would solve that problem for those Q572 Sir James Paice: Is that net of DHP or before 6,000. I think that brings it into stark relief for you. you allocate DHP to some of those cases? Morag Johnston: That is before we allocate DHP. Q570 Chair: That brings me on to another point that I was going to raise later, but it would be appropriate Q573 Sir James Paice: Thank you for the clarity. My to raise it now. We have had people suggest to us that understanding is that you originally got £2.3 million the bedroom tax should be applied only in in DHP. Since then, the Scottish Government have circumstances where people have been made a announced another £20 million, of which you got £3.5 reasonable offer of smaller accommodation. If they million, so you have £5.8 million. I understand that have been allocated by either the council or a housing on top of that, of course, you have the power to top landlord or have inherited because of family up with a maximum of another £3.5 million, if you movements accommodation that is too big for them wish to do so. under the bedroom tax rules, they should have it Can we be clear on these figures? How are you applied to them only if they have been made a allocating the Government allocation of £2.3 reasonable offer and have refused one. What is your million—apart from deciding, obviously, whether view of that? somebody is entitled to DHP or deserving of it? Are Councillor Kerr: I can see the logic in the argument you adopting any form of cash-flow discipline or is it in order to make the present position work, but literally the first £2.3 million-worth of deserving frankly, even that position does not take into account claimants? How are you going about this as a that families shrink and grow as time goes on. responsible authority? Families get attached to and involved in communities, Councillor Kerr: Morag is the best person to answer and the communities can be hugely disrupted or torn that, but I am pretty certain it is cash-flow discipline. apart by needless moves. For that reason, I clearly Morag Johnston: Can I come back and clarify some have an issue with the whole policy. I am fairly of the figures that you have quoted? shameless on that one. Sir James Paice: Of course. If you wanted to try to make the policy work more Morag Johnston: What actually happened in rationally, perhaps that is a way to do it; I can Glasgow was that we were allocated £3 million by the understand that. However, the general problem we are DWP as our initial allocation. It then advised us in facing right now is that there is not enough August that it had made a mistake and that we should understanding of what it amounts to on the ground. I have had only £2.4 million, but it is allowing us to am aware of constituents of mine who are very keep the £3 million. Effectively what that means is involved in community organisations. They are good that our eligible limit is £6 million, so the total amount volunteers and work with the local youth, but they are that it allows us to disburse is £6 million. When we cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:35] Job: 035419 Unit: PG05 Source: /MILES/PKU/INPUT/035419/035419_o005_michelle_131009 CORRECTED Final.xml
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9 October 2013 Councillor Matt Kerr, Morag Johnston and Richard Gass add on the £3.5 million that you quoted from the resources? You were operating on the £3 million limit, Scottish Government, that takes us to just over that— which is the Government’s allocation. It could have £6.5 million. The Scottish Government are allowing been £6 million, because you could have topped up us to use that allocation for things other than by another £3 million, but you were operating on £3 disbursing DHP. The council is considering using it to million until you got this extra from the Scottish assist with some of the homelessness pressures that Government. Councillor Kerr has already outlined. Morag Johnston: Yes, that is correct. The council had not set aside any money to top up its DHP allocation. Q574 Sir James Paice: Perhaps I have Councillor Kerr: I would like to clarify that, as I sit misunderstood. You are saying that the Scottish on the executive committee of the council that made Government’s allocation effectively replaces the the decision on this. The position was that we would authority that you have from Westminster to make it spend what we were allocated from the DWP and up by another £3 million, which is the figure you gave. would monitor the situation as the year went on. If we Morag Johnston: The Scottish Government funding saw a need to top it up, the understanding was that we comes to local authorities to use either to top up to would look at that. Frankly, the reason we were in that the limit of DHP— position—as I am sure you are well aware—was that Sir James Paice: The £6 million. local authorities the length and breadth of the country Morag Johnston: Up to the £6 million. In our case, are in very difficult times financially and we have to if we just added the full £3.5 million, we would be at be very careful. It was hard at that point, before things £6.5 million. got going, really to see exactly how the pattern of spend would go, so there was an understanding within Q575 Sir James Paice: So it is not on top of your the authority and the administration that we would top-up; it is a contribution to your top-up. monitor the position. Morag Johnston: Yes. That is my understanding of how that would work with the DWP. Q579 Sir James Paice: Thank you for that clarity. I also understand that in July the DWP allocated some Q576 Sir James Paice: So of the £9 million more resources, but those were to be bid for by local estimated loss, you have £6 million to disburse in authorities. Have you made any decisions on whether DHP. or not to bid? Morag Johnston: Yes. Morag Johnston: Yes, it is our intention to make a bid. We are working that up just now. Q577 Sir James Paice: Those are the figures. Now back to the question. Q580 Sir James Paice: Can you clarify a bit more Morag Johnston: To date we have seen a fourfold on this? Obviously there is the logic of cash-flow increase in the number of DHP applications from discipline, but do you treat all applications for DHP those we had last year. We have had about 12,000 alike or do you have some sort of priority for the applications to date. Those will have been for more different types, whether it is for the disabled or for than just the bedroom tax, but most of them will have whatever different types of reasons people might been for the bedroom tax. We have awarded about apply? 6,000 of them. To date we have committed about half Councillor Kerr: In the very same paper that was of our original £3 million budget, because until last approved by the council and actually made the week that was the budget we were working to. There decision on the budget, there was a list of how we was an element of ensuring that we had sufficient would prioritise that sweep. We have done it through budget to keep us to the end of the year. We therefore prioritisation. had an award rate of about 50%—we were awarding about 50% of the applications that were coming in. It Q581 Sir James Paice: It would be very helpful if is a discretionary fund. We do have a policy, but part we could have that. of the decision maker’s decision is in cognisance of Councillor Kerr: I can make that paper available to making sure that we have sufficient resources. you. The fact that we now have this additional £3 million from the Scottish Government means that we will now Q582 Sir James Paice: Thank you very much. My have to go back and revisit how we target that money, final question is really about the monitoring of it all. with the aim of trying to spend it all by the end of the I know you have to report back to DWP. Can you tell year. Effectively we had spent £1.5 million by the end us what reports you have sent back? Most particularly, of September, which was roughly where we would what would you like the DWP to learn from your six expect to be. We will now have to go back and spend months’ experience so far? roughly £4.5 million in the remainder of the year. We Chair: Remember, this is a family programme. are currently looking at how we will do that and how Morag Johnston: In terms of DHP, or can I answer we can target people who, potentially, were refused more broadly? before. We will look at maybe extending the amount of time we award the DHP for, because it is meant to Q583 Sir James Paice: Yes—about the spare room be short term. subsidy or whatever you want to call it. Morag Johnston: Local authorities will endeavour to Q578 Sir James Paice: Does that mean that the apply the regulations as they are set out by the DWP; council had decided not to top up from its own that is what local authorities have done for years. I cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:35] Job: 035419 Unit: PG05 Source: /MILES/PKU/INPUT/035419/035419_o005_michelle_131009 CORRECTED Final.xml
Ev 86 Scottish Affairs Committee: Evidence
9 October 2013 Councillor Matt Kerr, Morag Johnston and Richard Gass have already touched on the particular difficulties with seems to me that something like that was not the bedroom tax. There were very late changes to it particularly thought through. and staff and decision makers had to adapt to that. We Why is it that a local authority has to own a property are now in the position of having to field a large to make that happen? I cannot believe that it would number of appeals, which is additional resource. At be the Government’s intention, no matter what the same time, we have to manage a significant Government it would be—whether it is one I like or demand on DHP applications as well. All of this is in not—to penalise us for that. I cannot fathom the logic an environment where the DWP is continuing to for that. In fact, it gave us a perverse incentive to go reduce the amount of money that it provides to local back to putting people into hostels, which we have authorities in support of the administration process. spent 10 years trying to get out of. I have visited some Councillor Kerr: I believe the drop in support for the of them and they are Dickensian. Over the last decade, administration process is some 30% over the past in particular, in Glasgow we have put a lot of work few years. into trying to close these hostels and to move people Morag Johnston: For Glasgow city council. on into decent accommodation where they have a Councillor Kerr: I thought that might be illustrative. chance of living independent lives. Some of them In general, this comes down to good governance, dare have to learn how to hold down a tenancy for I say it. There is a pattern that has emerged. It seems themselves. There is a lot of work involved and a lot to me that the bedroom tax, as it is known, is just one of support required to do that. This simple little line part of this across welfare reform. Whether or not any undermined that. of us chooses to agree with what is going on, there What I think is required is a lot more thought. They does seem to be far too much ad hoc action going on. need at times just to pause and think it through. There While any of us at the sharp end of things likes to see really has to be more genuine dialogue with local Government listening to us and adjusting and all that, authorities about this, because at the end of the day what seems to be the case across a few different parts we are caught in the crossfire. We have to implement this and to try to make the best of the rules and of the general welfare reform agenda is that some regulations as they are set. Some more open things have not really been properly thought through discussion with people like us who are at the sharp to their rational conclusion. I genuinely believe that end of trying to make this work would be very the bedroom tax is one of those. useful indeed. If the aim was to save money, I am absolutely certain it is going to fail. As I said earlier, if the aim is to Q584 Pamela Nash: I want to go back to what we redistribute square footage, I think even that will be were discussing earlier about the Scottish pretty tricky, because if it doesn’t exist, it doesn’t Government’s top-up and how that has been used. exist. Even if I accept the premise, I think there is a Does Glasgow city council have any other hardship problem in how it has been implemented. funds available to different people, including those It is important to take this in the context of the other who are affected by the bedroom tax? things that are going on. I know your focus is on the Councillor Kerr: I have other people here who may bedroom tax today, but I would like to give a little be more expert, but the first thing that springs to mind example. I came into post in August 2010. One of the would be the Scottish welfare fund. The old crisis first papers I took to the executive committee of the loan/community care grant system has been put council was on changes to subsidy around housing the together in this fund. That is an interesting tale. It homeless. On the face of it, you might think, fair was devolved to the Scottish Government and then enough. Nobody was that shocked—the Government devolved to local authorities. There was a 10% top- are trying to save money, and that is what happens— slice as it moved down. The Scottish Government put but what would have been quite a minor change in that 10% back in for one year, which is appreciated, relative terms for all authorities had quite a significant but as far as we can tell it is for one year at the impact on the homelessness part of my department. It moment, which is concerning. had an impact of around £8 million. That was because Interestingly, initially there was an under-spend on we went from the position of receiving this subsidy that. All the time you hear stories about people going when we were housing people in flats and moving to food banks—all the horror stories we see in the them on into accommodation, as we should do, but media. Why would there be an under-spend, initially the rule was changed so that we did not receive that at least, in the Scottish welfare fund? We have gone subsidy any longer unless we actually owned the back to look at that, and it has now jumped up. It goes property we were putting them into. back to looking at cash flow. We have a monthly target When you come to an authority like Glasgow—the in order to make sure it is spent— biggest local authority in Scotland—which does not own any property or flats, that immediately puts us in Q585 Pamela Nash: How do you do that? My massive difficulty. It got to the point where we were understanding is that the under-spend on that, trying to save on the kind of furnishings we were certainly by our local authority, would be because the putting into temporary furnished flats. We were down criteria as to when someone can apply for money from to everything, to try to make savings like that, but the the welfare fund are so limited. hit on the department was still around the £8 million Councillor Kerr: There are a couple of things. I have mark. That was before we even started dealing with one theory that may be harder to prove—I will come the rest of the welfare reforms. That was just a little to that—but there is a little bit of flexibility. We have line somewhere in guidance from Lord Freud. It tried to move down the priority scale in terms of how cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:35] Job: 035419 Unit: PG05 Source: /MILES/PKU/INPUT/035419/035419_o005_michelle_131009 CORRECTED Final.xml
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9 October 2013 Councillor Matt Kerr, Morag Johnston and Richard Gass we allocate it. There is also an issue in terms of how Q588 Pamela Nash: Richard, have you been given we publicise it, which links into my third point. any opportunity to show what the impact is on the It seems to me that there are a remarkable number of people you are working with? people—including elected Members, if I am honest Richard Gass: I was not involved in any consultation with you—who are not necessarily aware of the prior to the implementation. Possibly it was not Scottish welfare fund and its equivalents elsewhere. appropriate for me to be involved at that time. Certainly there isn’t an understanding in the public. In fact, it seems that a lot of the public are not aware Q589 Pamela Nash: What about since then? My that there was anything that came in to replace the concern is that DWP should be monitoring the impact crisis loans or community care grants, as they used to that all its welfare reform policies are having. I know them. imagine that you are at the front line of the impact What interests me is the media dialogue around this. that they are having. When we see any discussion of welfare reform in the Richard Gass: Corporately we have the welfare media, the bedroom tax gets a lot of attention, reform group. My contribution would be to the naturally, because it is one of the things that are very welfare reform group. That would then be fed back visible. Food banks get a lot of attention, naturally, to DWP. because they are very visible and are a sign of good people doing good things—and what is wrong with Q590 Pamela Nash: Is that a regular communication that? It seems to me that a lot of people out there, between the group and the DWP? when they find themselves in hardship, are assuming Councillor Kerr: As far as I am aware. It might be there is nothing there and are going straight to food illustrative to talk about what the welfare reform banks. group is. The way Glasgow city council is configured, We have had a dialogue. We have an officer working basically we have very senior folk for the various group in the council, which Morag co-chairs; Richard services and departments sitting on this across the sits on it as well. We sit down and work out what whole council, because welfare reform affects happens next. A key part of that is a dialogue with the everything we do. The council also has arm’s length food banks to make sure that anyone coming to them organisations that have an involvement in this. That seeking assistance is also seeking assistance from the is an officer working group looking just at practical Scottish welfare fund and getting any help they can solutions. I occasionally drop in on that; sometimes out of that. politicians should stay out of some of this stuff, but I pop in when required. The last time I was there was to talk about the situation with the Scottish welfare fund. Q586 Pamela Nash: I take it that that In terms of consultation, I really wish a little bit more communication is going on with other organisations time and care had been taken. and elected representatives. Councillor Kerr: Yes, absolutely. There has now been an uplift in— Q591 Pamela Nash: Just a little bit? Councillor Kerr: Just a little bit; maybe I am underplaying it just slightly. There should have been Q587 Pamela Nash: That is good. That is very just a bit more discussion, because so much of what interesting, but I do not want you to go off at too is going on is having to be implemented—and having much of a tangent. I know there are other local to be faced, as well—by local authorities and local authorities that have put up other hardship funds as a politicians. I am a local politician, and we end up in safety net for those who are not entitled to DHP or the firing line for a lot of this. Of course, that is the help through the Scottish welfare fund. nature of local government—you end up taking some The other point I wanted to raise is that you mentioned of that flak. The difficulty is that without adequate that there should be more consultation with local dialogue beforehand we are left in the position of authorities. I will be interested to hear what all of you having to implement things that we do not always have to say, but how much consultation was there with agree with. That has always happened, but we feel that Glasgow city council prior to the bedroom tax being we have not had any genuine input into the process. implemented? What impact assessment has been For example, on the subject I talked about earlier, I carried out by DWP since then through you? wrote Lord Freud a very nice wee letter saying, “This Morag Johnston: I can talk about the formal is going to hit Glasgow particularly because we have consultation process. Back in 2010, I think, the transferred the housing stock,” and “How much grief council responded formally to the consultation on will it really cause you if you reconsider that?” I welfare reform. My understanding is that the bedroom received a very curt response, to put it mildly. The tax was part of that, but I would have to clarify that. one bit of light relief was that it was signed off badly Since then, I am not aware of any other specific and his name had been misspelt at the bottom. consultations. Glasgow city council did take part in a review by the Q592 Pamela Nash: I have had one of them as well. Cabinet Office, as I understand it, which is preparing Councillor Kerr: It had an “a” instead of an “e”. We a report on the effectiveness of the policies. Glasgow will leave it at that. I have kept it. city council was one of a number of councils that I understand it came to speak to. It spoke to a number Q593 Chair: Quite. On that happy note, let me move of our officers in detail about how they were working, on. Before we do, I want to clarify some of the figures so we have given feedback through that mechanism. that you were quoting backwards and forwards with cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:35] Job: 035419 Unit: PG05 Source: /MILES/PKU/INPUT/035419/035419_o005_michelle_131009 CORRECTED Final.xml
Ev 88 Scottish Affairs Committee: Evidence
9 October 2013 Councillor Matt Kerr, Morag Johnston and Richard Gass
Sir Jim. My understanding was that there was an flows through the Scottish Government. It comes initial allocation to the council, which the council was directly to local authorities. entitled to top up by 150%. Money was then given by the Government here in Westminster to the Scottish Q600 Chair: How much did you get? Government, which passed money on to you, but that Morag Johnston: We got none, because it was for did not increase the amount of money in addition that rural areas. An additional £10 million of transitional you were able to spend, so you were still only able to funding was also made available at the same time. spend 250% of the 100% that you had already, if you Glasgow got about £200,000 of that. We do not have see what I mean. That is correct, isn’t it? As I to use that for our DHP fund; we can use it for other understand it, the amount of money that you originally purposes. Glasgow decided to use it to support our had allocated from the DWP and the amount of money homelessness pressures. So we are still at £3 million that came via the Scottish Government from at this point. The Scottish Government have told us Westminster together come to around £6 million or they are giving us £3.5 million out of £20 million so, but that is still a £2.5 million shortfall in terms of they have made available. That will be allocated to all what you estimate the cost of the bedroom tax would local authorities. be in Glasgow. Is that correct? Councillor Kerr: I think that we are getting two Q601 Chair: Let me be clear. The £3.5 million that different funds mixed up here. you are getting out of the £20 million is money that has come from Westminster— Q594 Chair: That is what I want to clarify. Morag Johnston: No, it has come from the Scottish Morag Johnston: I will try to clarify it. There is a £20 million bid fund that the DWP has made available. Government.
Q595 Chair: So that is in addition to all of this? Q602 Chair: Let us be clear: no additional money Morag Johnston: Yes. has come from Westminster that you have received. Morag Johnston: Other than the £200,000 and the Q596 Chair: You have not got anything out of that ability to bid, which we have not yet done. yet. Morag Johnston: No. My understanding is that the Q603 Chair: So if the Scottish Government’s money £20 million that is coming from the Scottish is given to you to spend on the bedroom tax and other Government is coming from the Scottish Government things, that still does not allow you to go above 150% allocation. That has not come via any UK settlement, on your initial allocation, does it? as far as I am aware—the Scottish Government have Morag Johnston: No. identified that funding. The conclusion of that is a balance of £6 million. The council will use the money Q604 Chair: So there will still be a shortfall in terms from the Scottish Government to top up its DHP fund of what the bedroom tax has taken out of Glasgow and to the limit allowed by the DWP, which is £6 million. the amount of money that you are allowed to spend on the DHP to ameliorate the effect. Q597 Chair: I want to be clear. Is the £20 million Morag Johnston: Yes, that is correct. bid fund that the Scottish Government have made available separate from an additional allocation that I Q605 Chair: And that shortfall is likely to be about thought had come from Westminster? £2.5 million. Morag Johnston: No— Morag Johnston: Yes.
Q598 Chair: So there are no additional moneys from Q606 Chair: So even if the Scottish Government or Westminster at all? Westminster gave you more, unless the rules were Sir James Paice: The bid fund is not from the changed, you would not be able to spend it on Scottish Government. alleviating the bedroom tax. Chair: The bid fund is not from the Scottish Morag Johnston: Yes, that is correct. Government? Chair: Fine. I just wanted to be absolutely clear Morag Johnston: No. It is from the DWP. about that. Q599 Chair: Let us be clear then. How much money have you actually been allocated and physically have Q607 Sir James Paice: Can I clarify one point your at the moment? questioning has thrown up? Why is it £6 million and Morag Johnston: I will try. not £7.5 million? I thought you could top up by 150% Lindsay Roy: Come clean. of your base. Morag Johnston: Glasgow received just under £3 Morag Johnston: It was originally £7.5 million, but million initially. We were then advised that there was they advised us that they had made an error and that an error and it should have been only £2.4 million, we should have got only £2.4 million. It is the £2.4 but we have had the £3 million. Then, round about million that is now the basis. July, a further £5 million was made available by the DWP in rural moneys. Some of that came to Scottish Q608 Sir James Paice: So they have used that as the local authorities directly; it does not come through the multiple even though they have given you £3 million. Scottish Government. None of this DHP funding Morag Johnston: Yes. cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:35] Job: 035419 Unit: PG05 Source: /MILES/PKU/INPUT/035419/035419_o005_michelle_131009 CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 89
9 October 2013 Councillor Matt Kerr, Morag Johnston and Richard Gass
Q609 Chair: So you still have a £2.5 million Government saying, “Here is £50 million, folks. Write shortfall. If you got additional money—from the off all the arrears.” I think some more thought would Scottish Government, for example—you would be have to be put into it than that. able to spend that on other costs arising from other welfare changes but not from the bedroom tax. Is Q613 Chair: That is right, but that is what officials that correct? are for. The detail of that could all be easily worked Councillor Kerr: It depends. We could not spend it out. However, the principle of meeting the shortfall on DHP. I want to make absolutely clear that I will and overcoming the difficulties that are being caused not knock back additional moneys for DHP, but if you to RSLs as a result of the bedroom tax could be really wanted to make an impact on mitigating the overcome in that way. effects of the bedroom tax—if I sat in a position of Morag Johnston: I am not familiar enough with the power with that kind of money at my disposal—I regulations, but I am sure, as you say, that you could would look to transfer money to local authorities, revisit the regulations and make appropriate changes where they still have housing in their portfolio, and to allow that to happen. additional funding to social housing providers to allow Councillor Kerr: It is quite simple. The housing them to support their cash flow. At the moment, regulator could make adjustments. Even without those obviously, their bottom line is being hit—their cash adjustments, if the calculation is that there is about a flow is struggling. Some of the bigger ones are able £50 million shortfall in Scotland, the Scottish to carry on—and will go on for some time, I am Government have it absolutely within their gift to give sure—but the real difficulty is that it hits them in £50 million more to local authorities and social terms of their financial plans, redevelopments and new housing providers. If you leave it loose enough, it builds. All of that is because when they go to their will work. bankers and ask for assistance to go ahead and get some of these developments done, the cost of Q614 Lindsay Roy: I have been waiting patiently. borrowing will go up, because their income is Can I get down to brass tacks? There were 12,000 dropping. At the very least, there is uncertainty around applications and 6,000 have been approved. Are you this. To be brutally honest with you, if we had £20 planning to revisit those 6,000 approvals? million available to spend to mitigate the effects of the bedroom tax, that money would be better spent if Morag Johnston: Yes, in light of the new money that we distributed it to social landlords, whether they be has come from the Scottish Government. under local authority control or whether they be housing associations. Q615 Lindsay Roy: Can you tell me how many of the 6,000 received the full allowance and how many Q610 Chair: I want to be clear about that. In those received a part allowance in terms of the 14% or 25%? circumstances, that would allow social landlords or In other words, what criteria have you used for councils, where they were social landlords, to write eligibility? off arrears caused by the bedroom tax, which would Morag Johnston: A significant proportion of the £1.5 fill that hole. Is that legal? I quite like to make sure million we have spent to date has been to mitigate that these things are legal. It is possible for the financial hardship related to the spare room subsidy. Scottish Government to do that, is it? Can they pay In those circumstances, we would not award beyond, money to RSLs to write off— I would say on average, 12 weeks’ rent. So we would Councillor Kerr: How RSLs spend the income they not award it for the full year. We would award it for receive from the Scottish Government, which is a short time period only. channelled through local authorities, is a matter for the RSLs, within reasonable guidelines. I am absolutely Q616 Lindsay Roy: Can I clarify that? Some are for certain that it would be possible for guidelines to be 12 weeks, some are for six months and some are for written that would allow that to happen. There could nine months. be a development fund, for example, to support new Morag Johnston: It would depend on the individual builds. That is an easy one to do. circumstances of the case.
Q611 Chair: I understand that, but given that there is Q617 Lindsay Roy: And that is how your a limit to how much money can go into discretionary discretionary allowance is applied. housing payments, the other way of tackling the Morag Johnston: Yes. shortfall caused by the impact of the bedroom tax is for social landlords to write off arrears and have that Q618 Lindsay Roy: What percentage of those are amount refunded to them as a grant by the Scottish disabled? Have you given that a priority? Government. That is perfectly possible and does not Morag Johnston: It is a priority in our policy. break any rules, does it? However, we have had very few payments, relatively Councillor Kerr: I do not think it is impossible. speaking, made out to people in those circumstances. From memory—I am happy to provide the actual Q612 Chair: You look shocked at the very figures to the Committee—it is maybe £100,000 of suggestion. the £1.5 million. That is a concern to us, because in Councillor Kerr: Across Scotland I think about £50 those circumstances these are individuals we would million would be required to do it. I do not think it make a DHP payment to, probably for the full 12 would be as straightforward as the Scottish months. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:35] Job: 035419 Unit: PG05 Source: /MILES/PKU/INPUT/035419/035419_o005_michelle_131009 CORRECTED Final.xml
Ev 90 Scottish Affairs Committee: Evidence
9 October 2013 Councillor Matt Kerr, Morag Johnston and Richard Gass
Q619 Lindsay Roy: When people apply, do you Q627 Lindsay Roy: From your experience, would effectively do a means test with them? you say that has added to the stress for those Morag Johnston: Yes, we do. involved? Morag Johnston: Yes, but we have applied it that way Q620 Lindsay Roy: So if they have disposable is because it is a discretionary payment fund that we income, they do not get an allowance. wanted to ensure we had for the full 12 months. Morag Johnston: We will take their disposable Awarding 12 months’ worth of housing benefit income into account when determining financial payments to those people who happened to apply first hardship. would have meant that we would have run out of money. Q621 Lindsay Roy: Can you summarise the criteria again for me? There is financial hardship, level of Q628 Lindsay Roy: I can understand that. Recently disability— Shelter stated that “the purpose of DHPs has fundamentally changed, and this pot of money is now Morag Johnston: From memory, our DHP policy critical to the successful delivery of the Coalition refers to those affected by disability. We certainly government’s welfare reforms.” Do you agree with mentioned situations where separated parents kept a that? room for their sons or daughters. We also continue to Councillor Kerr: I stuck up my finger just before you mention foster carers, because although the started as I was about to make that very point. It is a regulations for additional room allowed for some point I made earlier about a change in the social foster carers’ circumstances to be taken into account, security system, effectively, from a rights-based we allowed that as well. We also continue to apply approach to a discretionary approach. You and Shelter the policy that would always apply, which is in cases have hit the nail right on the head. There is a shift of immediate financial hardship. here to people being reliant on discretionary payments rather than getting things as of right. There is a Q622 Lindsay Roy: What about youngsters of the problem with that, in that discretionary housing same sex and their age group? Have you applied the payments are not designed to be permanent. They are same ruling as the Government suggested? designed to be— Morag Johnston: Sorry, I am not familiar with that particular ruling. Q629 Lindsay Roy: In fact, they are designed to reduce over a period of time. Q623 Lindsay Roy: I cannot remember myself Councillor Kerr: Yes. They are designed to be whether it is up to age 10 or 12. If you have two girls temporary. They are not really designed to be aged 10 and 12— permanent things. Morag Johnston: They can share a room, and then after that— Q630 Lindsay Roy: Have you had any indication of what your level of support for next year will be? Q624 Lindsay Roy: Have you applied the same Morag Johnston: My expectation is that it will be criteria as the UK Government or do you have your less than £2.4 million. My understanding is that the own criteria? We found out that in the Western Isles, national pot is being cut, so we are expecting that to for example, they have a different set of criteria. flow through, but I do not know the exact amount. Morag Johnston: That is not something that we included in our DHP policy. I would not expect us to Q631 Lindsay Roy: You do not know by how much. award any DHPs in circumstances where we were Councillor Kerr: That is why I made the point earlier allowing— that if I had £20 million available to me to do Chair: To be fair to Western Isles council, I think that something about the bedroom tax, I would not it had that different policy for the allocation of houses necessarily have thrown it all at DHP. I think that you can get far more bang for your buck doing other things rather than for the allocation of DHP. That was the with it. point I was trying to clarify with you at the Lindsay Roy: I understand that. beginning—whether or not there was a mismatch Councillor Kerr: In my view, you are almost between the housing allocation policy and the undermining the whole principles of the system by bedroom tax policy. doing it that way. Lindsay Roy: Thank you. That is very helpful. Q625 Lindsay Roy: How many of the 6,000 have a discretionary payment for a full year? Q632 Chair: I just want to be clear. If people are Morag Johnston: I do not have that information to getting DHP for 12 weeks, that must be a terrible state hand, but I can try to provide it to the Committee of insecurity. If they are in financial hardship and it is afterwards. alleviated by this 12 weeks’ money, they will end up in exactly the same position 12 weeks down the road. Q626 Lindsay Roy: Do you have any notion roughly Even if they get it for the year, presumably there is how many it is? Is it 50%? no guarantee that they will get it next year. Their Morag Johnston: I would imagine it is fairly small. I financial position will be alleviated only if they move think it would be less than 50%. The majority have to a smaller house in either the public or the private been awarded it around the 12-weeks mark. sector. cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:35] Job: 035419 Unit: PG05 Source: /MILES/PKU/INPUT/035419/035419_o005_michelle_131009 CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 91
9 October 2013 Councillor Matt Kerr, Morag Johnston and Richard Gass
Councillor Kerr: That is exactly the case. That is why accommodation. Obviously we have a statutory duty it is not a sensible approach to social security to move to do that. from a rights-based approach to a discretionary approach. A rational system would not be one where Q638 Jim McGovern: But are people declaring people have to return every 12 weeks. A rational themselves homeless because they are in a house that system would not have people relying on plugging is deemed to be too large for them? gaps created by flaws in other parts of the system, Councillor Kerr: No, I am not aware of that. The key using what is a temporary methodology. That is the problem in the homelessness area at the moment in fundamental problem here. The fundamental problem Glasgow is getting people from temporary furnished is the change in principle. All we are doing through accommodation into a permanent let. If they are in a discretionary housing payments, frankly, is putting a position where they are potentially subject to the sticking plaster on it. It is not solving the problem. In bedroom tax, getting them a permanent let is fact, we are continuing to undermine. extremely difficult. As I said earlier, there are only 600 properties available. I think that was the GHA Q633 Lindsay Roy: You must have a number of number; it is our biggest partner in terms of housing people in their second and third phase of 12-week the homeless. So there is a serious difficulty. That is discretionary payments—or have the discretionary what is causing a real shortage. It is causing a shortage payments stopped after 12 weeks for some of them? in temporary accommodation, but maybe not in the Morag Johnston: For some of them, yes. way we would have initially predicted. That is the answer. There is a shortage, and that is why we have Q634 Lindsay Roy: So they have had their 12 weeks been forced into using bed and breakfast again in a that lasted up until June. way we had hoped not to do. Morag Johnston: Can I clarify that? I should have said it is an average of 12 weeks. We do not have a Q639 Jim McGovern: But overall, have you seen an set rule that says they get it for 12 weeks. We will increase in people coming to the council because they look at individual circumstances. Three months is are facing financial difficulties caused by this change? probably a period within which somebody who is in Councillor Kerr: Not through homelessness. There particular hardship may have time to try to find a has not been a spike in homelessness. solution. I suppose a lot of that harks back to what DHP was before the bedroom tax. It was meant to be a temporary fund to allow people time to find an Q640 Jim McGovern: Okay, take that part out of the alternative and more permanent solution. You are equation. Just generally, do you see an increase in bringing into this new environment, if you like, what people facing financial difficulties because their was an old approach. housing benefit is being cut? Richard Gass: I think we know that folk are facing Q635 Lindsay Roy: In effect, you are means-testing financial difficulty, but they are not coming forward. again. At this point in time, no landlord has been bold Morag Johnston: Yes. enough to evict someone because of the bedroom tax. What we expect is that arrears are mounting. We know Q636 Lindsay Roy: So you could be means-testing that people are presenting at food banks and that those three or four times a year. numbers have increased. There is quite clear evidence Morag Johnston: In practice, what we would that folk are facing financial hardship, but they are not probably do is revisit the individual’s records and look necessarily coming to our services. at it on that basis. This will all now need to change in light of the additional funding that we have had from Q641 Jim McGovern: Even an increase in people the Scottish Government, but the key point made by going to food banks would suggest that an ever- Councillor Kerr is that whatever happens, increasing number of people are facing some sort of discretionary housing payments are only ever meant financial difficulties. to be temporary payments. They are not meant to be Richard Gass: Absolutely. there permanently to make up a shortfall created in housing benefit. Q642 Jim McGovern: With regard to other changes to the welfare system, do you imagine future Q637 Jim McGovern: On the same subject, have the difficulties with the universal credit, for example? changes to the legislation and the bedroom tax, as it People who may be living rather chaotic lifestyles—I is called, had an impact on the demand for think Matt used the term earlier—will now be given temporary accommodation? the money to pay their rent rather than its going Morag Johnston: Not that I am immediately aware directly to the landlord. Unfortunately, I envisage that of. many of the people who live such lifestyles will see Councillor Kerr: It is an indirect issue. There has not that money as something that they could use for been any spike in homelessness per se that has then something else, rather than for paying the rent. caused a spike in demand for temporary Councillor Kerr: To put it into perspective, I believe accommodation. Our problem is moving people on that at the moment 99% of people in the socially from temporary accommodation. We have ended up rented sector in Glasgow have their payments paid with this logjam in the middle. If someone declares directly to the landlords. That gives you a sense of themselves homeless, we put them into temporary where things are. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:35] Job: 035419 Unit: PG05 Source: /MILES/PKU/INPUT/035419/035419_o005_michelle_131009 CORRECTED Final.xml
Ev 92 Scottish Affairs Committee: Evidence
9 October 2013 Councillor Matt Kerr, Morag Johnston and Richard Gass
My view on the universal credit is that it is an absolute landlords for investment. That will all change under car crash. To be quite frank with you, it is a charter universal credit. That is one of the big concerns that for loan sharks. There is the length of time for the the council has in terms of its policies on housing lead-in before you get your first payment. There is the development going forward. fact that you get that amount of money in one single payment. There will be people who, frankly, will not Q643 Jim McGovern: Is there some way that the have had that amount of money anywhere near them council can suggest directly to tenants of social in one go in their lives. As you noted earlier, there landlords, “You might want to continue the system will be a lot of people who live chaotic lifestyles—or where the rent is paid directly to the landlord”? they might just be very hard up—so the money will Morag Johnston: No. My understanding at the get spent elsewhere rather than going on the rent. If it moment is that that will not be a discretion afforded comes to a choice between putting shoes on the wee to the tenant. There will be certain circumstances one and paying the rent, I am pretty sure I know what where the money can be paid to the landlord at the the answer will be. You can see what happens there request of the landlord, but it will not be like it is when you get to the end of the month. The guy will now, where the tenant can say, “Yeah, you can pay be chapping on the door and marching you down to my landlord.” The tenant has that choice now. My your local ATM, just the way people used to do when understanding is that going forward the tenant will not the loan sharks used to take the child benefit book. I have the choice. There will be certain circumstances think that is where it could lead to. where the DWP—going forward on UC—will be able It goes back to the point I made earlier. This is what to pay the landlord, but it will no longer be the choice happens when legislation and regulation come of the tenant. forward without any adequate understanding of what happens in the real world—what actually happens in Q644 Jim McGovern: So the money will be credited the street and what is really going on in the to the tenant’s bank account and it will be up to them constituency. If, for the sake of argument, somebody how they use it—whether to pay the rent. ends up with £1,000 in their bank account and they Morag Johnston: Yes. are struggling or have an addiction issue, it does not Councillor Kerr: There is some discussion already bear thinking about what could happen. It is quite going on in Glasgow—I dare say it is happening terrifying. I have serious concerns on that basis. elsewhere—with credit unions to see what role they I know the Government have made noises around can play to help people, when the money goes into making allowances for people with addiction issues, their account, to divert it into other pots. They are but that is for the people who have come forward and trying to be of assistance around that. But, again, you made it known. Not everybody does. I think this is a have to have somebody who comes forward and is very serious issue. Quite apart from all of that—that savvy enough and aware enough of how the system is all the stuff for the people you are supposed to be works to do that. serving—actually administering this thing seems to me to be absolutely chaotic as well. It seems to me Q645 Chair: But that is an attempt to recreate the that this is an incredibly difficult reform to put existing system, isn’t it? together in practical terms within the DWP. That is Councillor Kerr: Exactly. certainly what I am hearing. I have no understanding of how it will be able to roll this out. Q646 Chair: Rather than having it diverted by the Additionally, I think the pilot programmes have been DWP, it is an attempt to recreate something similar completely insufficient on this. They have been outside. targeting for the pilot people who have volunteered to Councillor Kerr: Rather than tearing it up and starting take direct payments. Naturally those will be the again, how about we do something crazy like stick people who, frankly, are most able to manage their with something that was working? money. I am not saying that we want to stand in the way of people leading more independent lives. That Q647 Jim McGovern: But presumably the is perfectly sensible and rational, but to do it just by unfortunate people we are referring to, who live rather throwing someone in the deep end is absolutely crazy. chaotic lifestyles, probably will not be involved with It is a recipe for social disaster in some of our credit unions in the first place. That is the big problem. constituencies across the country. Councillor Kerr: That is exactly the point, isn’t it? Jim McGovern: I agree entirely. Don’t get me wrong; we would like more of them to Morag Johnston: I would like to come in on a point be involved in credit unions, but you are absolutely that Councillor Kerr has already made but that I think right. If you are living that kind of lifestyle, the is even more important when we come to universal chances are that you are not going to be part of that credit. It is the concern about registered social discussion. Credit unions can do a great job across landlords and their ability to borrow to invest. We the board in welfare reform and in trying to defend have already seen some potential risks of that with the communities, but that is what it is—it is defence. bedroom tax, but that will be much more of an issue Ultimately it is not mitigation. If the money is not when we move into universal credit. As already there, the money is not there. stated, 99% of housing benefit due to social tenants is paid directly to the landlord. That is a guaranteed Q648 Chair: A different point that has been raised income stream every month and is something the with us elsewhere—I wonder whether you can banks will look to when they are looking to lend to comment from your knowledge of Glasgow—is that cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:35] Job: 035419 Unit: PG05 Source: /MILES/PKU/INPUT/035419/035419_o005_michelle_131009 CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 93
9 October 2013 Councillor Matt Kerr, Morag Johnston and Richard Gass the 14% deduction is greater than the differential prepared to questions we have not asked. Are there between a two-apartment and a one-apartment, so any points that you are desperate to get across that effectively people are not just losing the difference but you do not think we have covered adequately? If there actually being fined a certain amount as well. Is that is anything like that, you can raise it now. If, as you the position in Glasgow, as you understand it? are travelling back north or in the next day or so, you Richard Gass: I have some figures here from Maryhill think, “Oh, I wish they had asked me about such and Housing Association’s rents. From one of my earlier such,” or “I should have told them so and so,” by examples, 14% of a £62 rent would be £8.86— all means write to us and let us know. Are there any additional points? Q649 Chair: That was very good. I could not have Richard Gass: I have one, which relates to the done that, I must confess. Oh, it is written down. migration from DLA to personal independence Sorry, that shatters the illusion. payments that will start towards the end of this month. Richard Gass: The difference between a three- Receipt of DLA can have a very helpful effect on apartment and a four-apartment is about £9, so yes. housing benefit. It can give entitlement to a severe Chair: So it is quite close. disability premium or to the carer premium. It can protect folk from non-dependant deductions. So Q650 Pamela Nash: The difference between a three- someone losing that benefit could have a detrimental apartment and a four-apartment? effect on their housing benefit. We want to ensure that Richard Gass: These are apartment sizes. A one- people do not fall out of the system. apartment is £48.66. A two-apartment is £61.39. A The process by which they will be invited to claim three-apartment is £65.09. So the difference between seems unnecessarily complicated. If they get DLA the two and the three is £4. I cannot do 14% of £65 today, rather than simply being sent a form to fill in in my head, but it is going to be more than £4, so yes, to see whether they qualify for personal independence there is a penalty. payments going forward, they will get a letter inviting Pamela Nash: It is quite significant. them to make a phone call. If they make the phone call, they will get part of their claim taken over the Q651 Chair: So there are quite a number of telephone. They will then be posted a form to fill in circumstances where, in fact, people are being and send back. It seems to me that there is punished for living, not simply losing the differential. unnecessary complication in there. If there were some Is it practical and feasible to say that the bedroom tax way of streamlining that system and engaging with would be maximised at the differential between what local authorities to ensure that we were aware when you are in and what you are entitled to, or would that severely disabled people were being invited to make cause insuperable organisational difficulties? In terms these claims, we could perhaps take a more proactive of what we recommend, it does seem unfair that role. Certainly the necessity to make a phone call somebody is being punished by having more than the seems— differential taken off them. Is it possible to say that the maximum taken off should be the differential? Can Q654 Chair: It does seem rather as if this additional that be calculated? complicated pattern is deliberately designed to deter Richard Gass: These were average figures. people from applying. Richard Gass: One could believe that. Q652 Chair: Ms Johnston, you are the one who does the sums in practice. Q655 Chair: The more complex you make it, the Morag Johnston: From a process perspective, I fewer people will find their way through it. cannot see why it could not be done. My concern Richard Gass: That is our fear—that this will create would be the administrative overhead of doing that in a barrier. If people who have repeat applications and terms of keeping all of our system records up to date so that we knew the rent levels for a particular are perhaps used to seeing a form come in once in a individual’s landlord and what those rent level while get a letter inviting them to make a phone call— differentials were. You are introducing a new element of data gathering into the calculation. I think it could Q656 Chair: I understand the issue. Off the top of be done, off the top of my head, but I am not really my head, I do not have a solution. If you feel you sure what the administrative overhead of that would have one, drop us a note and we will look at it. Since be. it is something that has come up in an evidence session, we will then consider whether or not we want Q653 Chair: The difficulty is that 14% seems to be to make a recommendation about it. That is the easiest entirely arbitrary. I am not entirely clear how 14% was way. Upon reflection, if there are any other points that arrived at. In circumstances where 14% is more than you have raised where you think, “We should have the differential, we want to avoid punishing people. said such-and-such because that would be a potential Presumably somebody would end up worse off if they solution,” let us have those. had the 14% taken off and paid the difference than if As I mentioned earlier, we have been invited by an they volunteered and said, “Look, I’ll pay the SNP MSP to visit Cathcart. I had already met the difference myself—don’t deduct my 14%.” We will people in Castlemilk and agreed that we would do consider how we take that forward. that, but now he has formalised it. We will be visiting The final thing we always do in these sessions is ask there, so if there are organisations that you think it people whether there are any answers they had would be helpful for us to visit while we are there, by cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:35] Job: 035419 Unit: PG05 Source: /MILES/PKU/INPUT/035419/035419_o005_michelle_131009 CORRECTED Final.xml
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9 October 2013 Councillor Matt Kerr, Morag Johnston and Richard Gass all means let us know and we will try to add them to Chair: Fine. We can get our staff to arrange that. If the evidence list. we are up in Glasgow as a Committee to have one Councillor Kerr: In that case, I extend an invitation meeting, we are as well arranging a series. Thank you to come out to our council and meet some of our very much for coming. That has been helpful. There welfare rights teams, and perhaps even the team that are no further questions. is administering the Scottish welfare fund. It might be quite useful for the Committee to see how it is being administered at the front line. cobber Pack: U PL: COE1 [SO] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 95
Friday 18 October 2013
Members present: Mr Ian Davidson (Chair)
Mike Crockart Mr Alan Reid Jim McGovern Lindsay Roy ______
Examination of Witnesses
Witnesses: Councillor David Ross, Deputy Leader, Fife Council, Louise Sutherland, Housing Manager, Fife Council, Eileen Rowand, Head of Revenue and Exchequer Services, Fife Council, and Graham Sutherland, Fife Law Centre, gave evidence.
Q657 Chair: I welcome our guests to this meeting of probably over another 1,000 housing association the Scottish Affairs Committee. As you will probably tenants, so that amounts to at least 6,000 people in be aware, the Committee is conducting a number of Fife. We estimate that the reduction in housing benefit investigations, including one on the impact of the for the council with the impact of the bedroom tax is bedroom tax in Scotland. We have had evidence taken about £2.3 million and probably over £3 million when nationally from a number of bodies but we also want you take into account the housing associations in Fife. to have the opportunity to visit various localities to The council has taken a decision to top up the make sure that we are hearing the views of people on discretionary housing payments to the maximum that the ground. That is why we have come to Fife today, it can, so we have a potential fund of £1.3 million; at the urging of Lindsay Roy who said Fife is a nice £800,000 of that has been put in by the council, place to visit at the best of times but that you have a although there is a slight change in that, which we particular story to tell us about the bedroom tax. may discuss later, with the Scottish Government Could we start off by asking our first witnesses to contribution. However, even if we were using that introduce themselves and tell us who they are, what entirely to meet the bedroom tax demands, we would organisation they are working for and what their roles only be able to meet at most a third of that impact, are, so that we have that for the record? and there are obviously other calls on the DHP. Louise Sutherland: My name is Louise Sutherland. I We have seen DHP applications rise by 800% am a service manager with Fife Council’s Housing compared to last year, so there has been an eightfold and Neighbourhood Service. We are responsible for rise in applications, and most of that is due to the the management of 30,000 houses as well as for bedroom tax. Of the people affected by the bedroom playing a strategic role in planning for housing in Fife. tax, we estimate over 60% are in arrears and over half Councillor Ross: I am Councillor David Ross. I am of those did not have any at 1 April, so for 30% of the Deputy Leader of Fife Council. I have a particular those affected by the bedroom tax, that is the only remit for housing, communities and local services and reason for them having arrears. The final thing in the I take the lead on behalf of the administration team stats is that we do not have enough properties to on welfare reform. downsize as the UK Government would seem to want Eileen Rowand: Good morning. I am Eileen Rowand, us to do. At the most, we estimate if everybody Head of Revenue and Exchequer Services, and I am wanted to downsize, we could probably meet one in responsible for overseeing the management of housing 10 requests. That is depending on whether those benefit and discretionary housing payments. properties are in the right place and are suitable for their needs. Q658 Chair: The fourth witness is Graham The council has debated the bedroom tax and other Sutherland, whom people may have noticed is not aspects of welfare reform on a number of occasions. here at the moment. I understand he is in court in Our clear view on this is that the bedroom tax is Dunfermline, appearing not as a defendant but on unjust, unworkable, pernicious and that it should be behalf of one of the groups involved, so he is going scrapped. The broad reasons for that are, firstly and to come as soon as he can. most importantly, the impact it is having on the people Could you start off by giving us an overview of the it is hitting, who are maybe the lowest income people impact of the bedroom tax in Fife? in Fife and across the country, many of whom are Councillor Ross: First of all, I would like to give you subject to other disadvantages such as disability, my own welcome, on behalf of the council, to Fife. unemployment, relationship breakdown and the need We are very pleased that you have taken this for access to children. opportunity to come and visit and hear first hand from Secondly, the tax is very confusing and contradictory. people in Fife on this very important topic that has a We have seen recent tribunals come out with various huge impact. different decisions, using other legislation that As an overview and in terms of some of our concerns, contradicts the regulations that the DWP are putting the council is one of the largest council landlords in forward. It is at odds with our allocations policy. We Scotland. We have 30,000 properties. On top of that, have determined a set of needs, as is our duty, and it there are around 9,000 housing association properties is in contradiction to those, based on needs, based on in Fife. We estimate that there are around 5,000 the fact we are not allowed to take income into council tenants affected by the bedroom tax and account when we are making allocations. It is setting cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
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18 October 2013 Councillor David Ross, Louise Sutherland, Eileen Rowand and Graham Sutherland up a whole lot of inequities between those who are defendant but as a participant, so that is good news affected by the bedroom tax in housing allocation for you. terms and those who are not. It is not a level playing Is there anything the other two witnesses from the field. I think it is increasing the other impacts on the council want to add to David’s comments? welfare system and housing so that you might in Eileen Rowand: No. I think they are fairly theory be saving money through the imposition of the comprehensive. bedroom tax but the knock-on in terms of the other things that we have to put in place to cope with that Q660 Lindsay Roy: David, thank you very much for is probably even more costly. The final thing on that a comprehensive overview. Can you tell me how is that we are seeing people moving into the private much money is available for DHP and what the rented sector where the rents are higher and they are different sources are, in particular your own top-up? claiming, and are able to claim, more housing benefit. Eileen Rowand: The allocation that we have received That is just contradictory and perverse. is £539,000. We can top that up by 150%, so we can From the council’s point of view, there are a lot of add £808,000. wasted resources going in. We are putting additional funding, time and staff effort into coping and Q661 Lindsay Roy: Have you done that? providing advice, administering the new systems, and Eileen Rowand: Yes. The council chose to do that that is taking people away from their regular jobs of earlier this year and subsequently the Scottish keeping arrears down, making allocations and housing Government have come forward with £20 million of management, keeping voids down. We are seeing the funding, which is in essence for Fife the same value impact on other aspects of housing and in finance as as the £800,000 top-up. That has just been announced well. Also we are quite clearly seeing unnecessary in September. The council had already taken that duplication. The point Eileen has made to me on a decision to top that up and because there is the ceiling number of occasions is that it is a double assessment. on the maximum top-up, we can use the Scottish We are assessing people for housing benefit, doing the Government funding and the council funding, so it is needs and financial assessment and then we are having one and the same. to do the same thing again for the DHP. If the things that we are giving full DHP to were exempt, we would Q662 Lindsay Roy: But it is clearly not enough to only have to be doing that assessment once. meet demand? The final concern is the impact on the overall housing Eileen Rowand: No. As David said, it would only budget and on other tenants among our 30,000 really meet 30% of under-occupation need that has tenants. Arrears are going up and in the last 12 months been identified to date. we have seen something like a 25% increase in arrears. There is real concern about the long-term debts being incurred by tenants affected by the Q663 Lindsay Roy: You very helpfully told us there bedroom tax. We can meet and manage some of those are 30,000 council houses. Can you give us a debts but they keep mounting. At some stage in the breakdown in sizing of the council houses? future we are either going to have to write them off Louise Sutherland: We have just over 7,000 that are or those tenants, who have a very limited ability to one-bedroomed or bedsit size; 14,000, roughly 50% pay that level of debt, are going to be faced with a of our stock, is two-bedroomed; and the remainder of huge bill that will impact on their lives for a long time around 8,000 is three or more bedrooms, so large to come. The more that arrears go up, the more that family-sized stock. we have to spend housing money to meet these kind of needs, because the legislation limits our ability to Q664 Lindsay Roy: How many of the 7,000 are build new homes and to do improvements and repairs available for anybody who wanted to downsize? to our existing stock. That is not good for housing Louise Sutherland: Our turnover every year is about in Fife. 10% but a lot of our smaller stock—and I don’t have To sum up, our basic position is that this legislation is the detail but can provide it—is reserved for older not working, it should be scrapped, but even in the people. It is in the form of sheltered housing or meantime there are a whole lot of mitigating actions bungalow housing. It is for people with medical needs that we think could be put in place to offset the as well as for those who are needing to downsize, so impact. Thank you very much for indulging me in not all of it would be generally offered to somebody getting those points across. I am happy to answer who is needing to downsize and who is under questions about the individual things you are retirement age. interested in. Q665 Lindsay Roy: So it is likely to be fairly stable? Q659 Chair: We are going to come on to exploring Louise Sutherland: Yes, indeed it is. the question of mitigation measures, so we will want to go through those with you in detail, if not now Q666 Lindsay Roy: Can you tell us how many verbally then later on in writing. I am glad that we applications for DHP you have had and what have been joined by Graham Sutherland who has been proportion you have been able to approve? released by the court and we will come on to your Eileen Rowand: To date we have had 3,129 questions later. I have already explained to the public applications and of these we have actually paid 2,603, gallery that you have not been appearing as a which is 84%. cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
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18 October 2013 Councillor David Ross, Louise Sutherland, Eileen Rowand and Graham Sutherland
Q667 Lindsay Roy: Have you paid in full, in part, been someone with a bedroom tax demand hanging over a three-month period, a six-month period, a over them, although they had paid their rent, who has whole year, or a combination of these factors? gone into a local office and actually slashed their Eileen Rowand: It is a combination. We introduced a wrists in the office. That is not only horrific for them DHP policy in August, I think. Our basic award that but also very distressing for the staff who have to deal we make is we provide 75% of the gap between with that. There are a multitude of other examples. housing benefit and the rent for a 12-month period. I know there are some people from the bedroom tax Initially we would only do that for six months but campaign in Fife today. We have regular meetings because the fund has been topped up, we have with them and they are able to bring forward a lot of extended that. We do have cases that we have individual horrific cases. There are families, couples prioritised in the policy where we will provide 100% perhaps, who have been in a house for 20, 30 years. funding for a six-month or 12-month period. Their kids have grown up and maybe just left. It is the family home, all their networks are there, and now Q668 Lindsay Roy: I realise it is very difficult they are being slapped with a 25% reduction in their circumstances. How do you prioritise? What criteria rent. Maybe the kids were contributing to the rent do you use to prioritise allocation of money? before they moved on, so there is a double whammy. Eileen Rowand: A requirement of the regulations is There are cases of disability where it is impossible for that we have to undertake a financial assessment. a couple, because of disability or medical reasons, to Everybody who is entitled to a DHP payment is sleep together in the same room but that does not seem already on housing benefit. As I say, the regulations to be taken into account in a lot of cases. require us first of all to consider whether financial There are a whole lot of these things arising. When assistance is required, so we ask individuals to we get them, we look at them individually but it is complete an income and expenditure assessment. We very difficult. There are a lot that we find ourselves are happy to support them in doing that. unable to address because of the regulations. I don’t know if there are any other cases that you might want Q669 Lindsay Roy: That is a kind of means test? to highlight. Eileen Rowand: Yes. We have introduced a number Louise Sutherland: One of the statistics that for us of factors in order to add to this whereby our underlines the difficulty is that we have nearly 2,000 minimum weekly payment of DHP is now £5 a week. tenants who are used to not having debt, who When we get to the point where we are assessing managed even on very low incomes to pay their bills. whether there is disposable income, initially we were We now have 1,700 who have gone into debt to the looking at their income and expenditure and if they council because they owe us rent monies. While we had any disposable income we were having a cut-off have done what we can to help them, that must be a at that point, but now we allow a further £10 daily stress for them because we cannot commit to disposable income before we would apply the cut-off. giving DHP until we can resolve the problem if they Those cases will have disposable income but they will want smaller accommodation. We are limited to still get a DHP. We do appreciate it is people who knowing what the future allocation of monies will be have very low income and it is very difficult for the for that. That is a large percentage of our tenants who individuals. need that extra support from us and these are people who will find it very difficult to meet the additional Q670 Lindsay Roy: There must be a tension, costs of housing. therefore, between helping those in financial difficulty and making sure you have enough in the pot of money to sustain payments for the whole year. Q672 Lindsay Roy: For the many who are not Eileen Rowand: Yes. As I say, we are awarding in receiving DHP and who cannot fulfil the rent general 75%. At the beginning of the year we started requirements, what is your policy on evictions? to award 50%, so we have increased it. We are trying Louise Sutherland: Our policy always has been that to provide enough financial assistance so that where tenants are working with us to reduce or to stay everybody in need gets some level of assistance, but their rent arrears, we would not take them to court to we have to try to balance that with not running out of evict them in any case. That is something that we have funds. The budget is cash limited. It is not like other repeated a number of times now in relation to this council resources where we can divert resources from bedroom tax. Where somebody has already had rent other areas to spend. Once this budget is spent, we arrears and has the wherewithal to be paying have no flexibility to provide further assistance, so we something, if they are engaging with us, we will do are very conscious of that. what we can to keep them out of the court system. Where they have not engaged with us, we would go Q671 Lindsay Roy: Can you give us evidence of any to court but we would not consider any portion of that stress, anxiety or impact on well-being of people who rent arrear that was due to the bedroom tax. are claiming benefits? Is that something you have experienced through your offices? Q673 Lindsay Roy: Is that consistent throughout Councillor Ross: Yes, as a general point. All the the country? councillors are getting cases weekly, if not daily, of Louise Sutherland: I would say it is, largely speaking. people who are finding themselves in particular Where the headline seems to be that a council is not difficulties and there are a whole lot of case studies evicting, it is very much the same principle as ours, on that. The most extreme example fairly recently has that while people are working with the council to cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
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18 October 2013 Councillor David Ross, Louise Sutherland, Eileen Rowand and Graham Sutherland address the arrear, there will be no eviction. I am Westminster we heard from other witnesses that even unsure if there is anybody who has said outright— if someone wins an appeal, there is not a clear Councillor Ross: Just to reinforce that point, we took precedent. It does not apply to everybody in the same a motion, a decision at our executive committee in circumstance. They have to come forward. If there are March to reinforce the fact that provided people have two people living next door to each other and one contacted us and are working with us to manage their wins an appeal, unless they tell their neighbour, the financial situation, then we unequivocally will not neighbour could still be suffering the detriment, evict them. I would also stress there is not one council unknowing that their next-door neighbour has won in the country that has a blanket non-eviction policy. an appeal. Whatever political colour they are, there is not one Eileen Rowand: Yes, that is certainly the case. We council in Scotland that has a blanket policy. I think have had first tier appeals that have been upheld and our policy, in common with those of a number of other we have taken legal advice as to whether we could councils, is probably as far as anyone is able to go, extend the appeals to other people who have similar given the impacts that one would see from that. circumstances. What has happened also is that the DWP have issued guidance to local authorities that Q674 Lindsay Roy: But you are doing everything has made it very clear that they cannot extend a you can to avoid eviction? decision that is linked to room size to other similar Councillor Ross: Yes, absolutely. Nobody has been properties. We are awaiting the outcome of the second evicted and won’t be. tier tribunals in order that there is a judgment made, and that will provide clarity because, as you say, first Q675 Lindsay Roy: Can I pick up what capacity tier tribunal cases cannot be applied to other cases. there is locally for tenants to move into the private There is clearly confusion now because we have had sector? first tier cases that have contradicted each other, so we Louise Sutherland: As part of our strategic role, we really need clarity in order to move forward. work with Fife Housing Partnership, which has the register of social landlords of Fife on board and also Q679 Jim McGovern: If the same circumstances representatives of the private rented sector. The applied to two households, possibly next door to each feedback that we are getting from them is that there other, I would have thought it would make sense that is potentially less and less opportunity for people to one would create a precedent for the other, but your move into the private rented sector because landlords information is that it will not. are becoming less willing to reduce their rents to the Eileen Rowand: Legal advice says that we would be level that local housing allowance will pay. The other acting ultra vires if we were to take the cases that change where single people moving into the private have been upheld, the decisions, and apply them to rented sector would only get a shared accommodation other circumstances. We have made that point clear to rate up to the age of 35 means that again there is less the DWP about how it is perceived by the public as opportunity for that move to take place. While the well. There are expectations that council should be Private Landlord Forum are suggesting that their extending it but, as things stand at the moment, we do members are trying to accommodate the changes, not have the powers to do that. some of them are just finding it too difficult to continue to do so. I would say there is a limited ability Q680 Chair: That is the difference between the first to move into the private rented sector as a solution. tier and the second tier, isn’t it? Eileen Rowand: Yes. Q676 Lindsay Roy: Are you saying that it is more limited than before, that the options are narrower in Q681 Chair: Remind me, in the paper that you gave fact? us about changes you wanted to see, is one of your Louise Sutherland: Yes, especially with the shared recommendations that the first tier should provide a accommodation rate. precedent? Eileen Rowand: I think the first tier hearing is done Q677 Lindsay Roy: Is there anything else that the by a QC and it is an individual QC’s interpretation of DHP is used for apart from supporting the bedroom the law. I am not a legal expert but I would suggest tax? that the second tier tribunal hearing is probably more Eileen Rowand: We also use it for the benefit cap that robust than the first tier. was introduced in July. We have only awarded it for 12 cases. I think we are estimating currently about 70 Q682 Chair: You are not arguing for a change in the people in existing mechanisms. Is that correct? Fife are impacted by the benefit cap, but obviously it Councillor Ross: I don’t think it is something that we is dependent on people coming forward with have looked at in great depth and Graham might have applications and we are trying to encourage them to a more legal perspective on it than we have. The two do that. We also have paid out in 272 cases for a local things I would say are, firstly, we would very much housing allowance for the private sector, so obviously urge the tribunal service to get on and settle these as it covers more than just the council and housing soon as possible so that we have definitive decisions associations. that we can implement and there is clarity. If you have any ability to make that point, we would very much Q678 Jim McGovern: On the point Eileen made appreciate it. The second thing is that we are aware about people having to come forward, recently in that there are probably other tenants in the same cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
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18 October 2013 Councillor David Ross, Louise Sutherland, Eileen Rowand and Graham Sutherland position as those who have gone through the appeals DHP. That would still mean that somebody would end so far. We are in the process of doing an assessment up having to pay 25% of it. to identify those so that once we get a definite Eileen Rowand: Yes, that is the case. We are paying decision, if there is a change, we can press the button out 75% for 12 months and the reason that we are immediately and make sure that they are repaid the restricting it is because we have obviously budgeted benefits that they will be due in that case. and made assumptions about how many people are going to come forward and claim. We would have Q683 Jim McGovern: Chair, could I just ask David, insufficient resources to pay 100% out for the 12 would that be retrospective payments? months. Councillor Ross: Yes. My understanding is—and the Chair: We have some other questions and I know that cases that we have had—we have made those, but that some of my colleagues want to come in on issues has been on an individual basis. We made those until arising from this. Are there any issues arising from the DWP then came down with their further the questions we have had so far? regulations saying, “Hold on, they are going to appeal so you cannot make any”. But those that we have had, Q688 Mr Reid: Yes. Ms Rowand had given the we have paid up to then. We think it was right to number of cases where DHPs were used for purposes pay them retrospectively and I think we have done other than the bedroom tax. I was wondering if she with DHP. was able to tell us the percentage of the DHPs in terms of cash that was being used for other purposes. Q684 Jim McGovern: I am sure you would agree Eileen Rowand: It is 16%. that it is particularly cruel that while people on the Mr Reid: 16%, thank you. The question was also lowest incomes are suffering because of this, the raised— lawyers and the QCs are making big bucks here. Councillor Ross: I could not possibly comment. The Q689 Chair: Sorry, can I just clarify, is that a general other thing to say though with the changes, we started common figure across the whole of Scotland, from off very—small “c”—conservatively in April in terms your knowledge, or are there factors unique to Fife of use of the DHP to make sure that we did have that make that either particularly higher or lower? enough funding to meet the most difficult cases. When Eileen Rowand: I cannot really give you an answer we found that maybe there was more capacity in that on that question, unfortunately. system, we changed the criteria and upped some of Chair: Right, okay. the percentages and we made back-payments there back to April on all those that had only received a Q690 Mr Reid: Another question was to do with the small amount. private sector. Do you know what percentage of The other point though on the DHP is that we are still private sector tenants are in receipt of local housing concerned that we probably only had applications allowance? from maybe about 50% of those affected by the Eileen Rowand: I do not have that information with bedroom tax. Maybe the worry is that the other 50%, me today, unfortunately, but I could provide it. or a proportion of them, are scared about arrears and do not want to engage with us and are therefore not Q691 Mr Reid: Yes, if you could. My follow-up was putting in applications or don’t know. We have done going to be that it had been said in answer to an earlier our best to get the word out to all our tenants that they question that private sector landlords were not willing need to claim, but there is certainly still a big to bring their rents down to the level of the housing proportion that have not put in applications. allowance. My understanding is that the local housing allowance is fixed at the 30th percentile, so the crucial Q685 Chair: Can I just clarify one point about DHP, question then would be if the number of people in the and if someone has not applied up to now and they private sector in receipt of housing benefit is less than then apply and are granted it, is it granted back to the 30%, then presumably there should be a match, or if beginning of time, so to speak, from when the it is more than 30%, there obviously will not be a bedroom tax was introduced or only from the time match. Even if you do not have the figure available, that they applied? do you have any idea of whether it is around about Eileen Rowand: We would grant it back to 1 April as the 30th percentage or not? our policy stands at the moment and the way that we Eileen Rowand: No, I do not have that information are administering it. What may well change is we with me today, unfortunately. obviously have £1.3 million that we can spend this Mr Reid: If you could send us it, please. financial year and as we get nearer to that £1.3 Eileen Rowand: I am more than happy to provide million, we may be limited in our ability to backdate it, yes. it to 1 April. Q692 Chair: I wonder if I could just come back to Q686 Chair: Simply because you have run out of cover some of the points that you mentioned. One of money? you indicated—I think it was yourself, David—there Eileen Rowand: Yes. are things to which you are giving full DHP that in your view should be exempt. It would be very helpful Q687 Chair: Can I just clarify one point on that if you could maybe give us a list of those, because I question of the payments? I think that you said you think one of the issues that we are likely to make would pay 75% of the shortfall that was caused by the recommendations on is the changes to the cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
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18 October 2013 Councillor David Ross, Louise Sutherland, Eileen Rowand and Graham Sutherland applicability of the bedroom tax and adjusting the provide more affordable housing, but at the time same circumstances in which people should be exempt. Can relieve some of the stress on our stock. you give us a flavour of the sort of things on which you are giving full DHP that in your view the Q695 Chair: That is right. I just want to explore bedroom tax should not be applied for? whether or not this is legally possible. It is presumably Eileen Rowand: Yes. Instances are where the property legally possible for the council, as landlord, and for has been significantly adapted to meet the needs of other landlords, to write off arrears caused by the the tenant or their family; where there is a situation of bedroom tax, should they so wish. It is then also legal, end of life care, we will award 100%; where the as I understand it, for the Scottish Government to individual is within six months of reaching state reimburse that amount of money to either the council pension credit age, because they obviously then or the social landlord and therefore there is another become exempt; under-35s in the private rented way that the impact of the bedroom tax can in fact be sector; if an individual is pregnant and obviously mitigated by the Scottish Government. Is that correct? going to have the baby, they are going to need an There is silence. additional room within six months of that, we will Eileen Rowand: Our understanding is that it is provide them with 100% DHP, and also if there are correct, because if what we do is try to underwrite medical reasons that require an additional room, we some of that to the individual, it then does become will provide 100%. If they are receiving or providing problematic legally. Do you want to— care, again we will provide 100%, and also if they Louise Sutherland: Yes. Obviously when we look at have responsibility for children who are not included writing off debt, there are rules that we have to operate in their benefit claim, so absent parents. within that and we have to look at the likelihood of our being able to collect that debt. If the likelihood is Q693 Chair: Can you give us an idea of what sort of that we are unlikely to collect that debt, we obviously percentage of those covered by the bedroom tax will need to write that debt off, so we couldn’t really just be taken out of it if all those exemptions were look at bedroom tax debt and say, “Right, we are granted? Are we talking 99% or 1% or presumably going to write all of that off” because at the moment, some figure in between? I think we have over 22% of people paying their rent Eileen Rowand: I do not have those percentages with who are impacted by bedroom tax. me. I would probably be guessing if I gave you an answer, to be honest. I think what we are finding is Q696 Chair: I do understand that, and of course the that DHP is being used as it was never really intended UK Government’s expectation was some of the impact to be used. It is a short-term measure to provide some of the bedroom tax would be overcome by people breathing space for individuals to obviously change working additional hours or paying it out of savings. their circumstances. We do agree that we are using In circumstances where these opportunities are not DHP and providing 100% assistance where it would available, particularly in terms of expanding hours or make far more sense if there was an exemption there, taking in lodgers, it is possible to see that some of the because it has just increased turmoil for the bedroom tax would be paid out of savings, but by individuals to go through the process of applying for their very nature, savings would then tend in those circumstances to be run down. If you were not able to a DHP and it is double-handling of the work for the write off all the debt as a result of that, I just want council. It is very heavy, yes. to clarify whether you would be able to write off a substantial amount and the Scottish Government could Q694 Chair: No, I think we understand the general step in to cover that debt? So that there is in fact more principle of that. that the Scottish Government could do, should they You have said already that you have no flexibility wish to do so. about putting other money into the DHP and we Councillor Ross: Obviously there are legal issues understand that. Looking at the problem from the involved here in terms of the split between devolution other end, is it feasible for you as a council to be of powers. Our understanding, although I do not have writing off some of the debts that people have the detail, is that there are indications that the Scottish incurred from the bedroom tax, particularly if the Government has the powers through either housing costs of those were being then refunded to you by the legislation or its role in social welfare to address some Scottish Government? of these issues. It has been estimated that the cost of Eileen Rowand: We have, as a landlord, a 30-year mitigating entirely the impact of the bedroom tax business plan that helps us to provide the services, but across Scotland would be £50 million. The Scottish also to develop our new build programme. One of the Government is already putting in £20 million to top assumptions that that is based on to allow us to deliver up the DHP and, as you have heard, that is not going the affordable housing is a 1% bad debt turnover. to help one tenant in Fife because we have already Looking at some of the situations, where even if half topped up to the maximum, so it is just displacing of the under-occupation charges paid were more than money the council has already committed. doubling what we have to set aside for bad debt to We certainly feel that if they were to put that forward 2.2% of our turnover, that is £1 million or more that and councils could make a contribution to that fund, we are taking out every year. We do have that capacity we could find the money to offset 100% the impact of to write off bad debt, but at the cost of something else, the bedroom tax in Scotland and that there would be so if that was underwritten in some way, there would the powers, albeit we might have to go through some obviously be a win for us, because we could then kind of legal processes and change legislation in cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 101
18 October 2013 Councillor David Ross, Louise Sutherland, Eileen Rowand and Graham Sutherland
Scotland through the Housing Act and suchlike. We percentage allocation is and how that compares with could do that, but I do not know if Eileen has any other authorities. technical— Chair: I think it would be very helpful if you came Eileen Rowand: Yes. I will not say very much on back to tell us whether or not you thought you were it, but obviously housing rent is part of the Housing being dealt with fairly. Revenue Account and it is a separate account of the Lindsay, did you want to come in? council and that is ring-fenced, so we would have to look at the technicalities of the Scottish Government Q701 Lindsay Roy: Yes, we know that applies to the giving us resources for the HRA, but that is probably Western Isles, Shetland and Orkney. I think that is an a bit technical. important bit of information. Eileen Rowand: Yes, and I believe Argyll and Bute Q697 Chair: Absolutely, but much of this comes as well. down to political will, doesn’t it? When I was in a Chair: Clearly we want to— local authority, I always found that if you asked for Lindsay Roy: The member is here. an opinion from local authority lawyers, you were told Chair: Congratulations to them if they have managed you could not do it. On the other hand, if you wanted to get a better deal. a particular objective achieved and it was a question Lindsay Roy: Powerful lobbying by the local MP. of, “How do we do it?” they were generally more Chair: You are not standing for election here, so helpful. So, unless I am mistaken, what you are saying leaving that aside, it is really not fair if some to me is that yes, there will be all sorts of difficulties authorities are getting more from the Scottish that will no doubt keep lawyers occupied for ages, Government than Fife is and we would want to which is good for them, but it can be done. obviously explore that. Eileen Rowand: Yes. We have already had Eileen Rowand: I think more has been given to rural discussions and obviously previously there was a areas because there is greater difficulty in relocating housing support grant that could be given to councils people, so obviously you have to look at why has to support HRA. Now, that has been abolished, but if there been an increase to rural areas, but we certainly that was reintroduced, that would provide a means to in Fife also have rural areas— provide a type of support. Chair: Absolutely. Eileen Rowand:—and have the same difficulties in Q698 Chair: This confirms what we have been told rural people being able to move. by others, but I think we just wanted to run it past yourselves as well. Q702 Chair: We will come on to this later on, but One of the other points that I wanted just to clarify my understanding is that you also have substantial with you, in terms of the amount of money that you difficulties in terms of reallocating properties—I think are getting from DHP and other sources, is that it has the point that Louise made earlier—because you been suggested to me that some of the other smaller simply don’t have enough. So it is not just a question authorities in Scotland are getting a much higher level of rurality, it is a question of adequacy of numbers. of financial support than yourselves and that the Councillor Ross: It is certainly also an issue of existing payment system, particularly by the Scottish geography. If somebody in St Andrews wants to Government, is not fair to Fife. Can you just clarify if relocate, it would be totally inappropriate to reallocate that is the case, as you understand it? them to Kincardine or Dunfermline, 50 or 60 miles Eileen Rowand: We have not really looked at that. away. That, I think, is an issue. I know that some other authorities within Scotland received an allocation because they were in the 20th Q703 Chair: Can I just go back to the question of most rural areas, and I know that their DHP allocation evictions, because I am aware that not all that far has been increased significantly, but I cannot really away from here, leaflets are being put out saying that comment on whether Fife’s share is fair. Fife Council intends to start evicting people for bedroom tax arrears. Can you just clarify for me again Q699 Chair: It would still be up to the same how people could have come to this conclusion or are maximum though, wouldn’t it? these just simply bad people? Eileen Rowand: Yes. Councillor Ross: I wouldn’t quite go that far, but there has been an issue. There are a number of groups Q700 Chair: Certainly when we met some other of people who feel that a blanket policy of no eviction authorities last week, they were telling us that they is appropriate. Now, some of those I think have a very were under the impression that all of their bedroom principled position and I have heard that from day tax monies were going to be covered and that certainly one. We have brought in a policy that is totally would seem to be unfair to Fife if they are getting it consistent with the advice we are getting from the and you are not. We obviously would take this up with SNP Scottish Government Minister, Margaret the Scottish Government, about why they are being Burgess, when she said, “Good practice is X, Y and unfair to Fife. Z”. We are absolutely consistent with that and we are Eileen Rowand: I have certainly heard that in the consistent with most of the councils in Scotland. As I context of the additional rural allocation and that they say, there is not one council that has a blanket policy are now looking at how they can possibly spend the of no eviction now. There are other parties who have allocation. So I have certainly heard that in those been criticising us for that, albeit that our policy is circumstances, but I can feed back on what our completely in line with their own party’s policies cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
Ev 102 Scottish Affairs Committee: Evidence
18 October 2013 Councillor David Ross, Louise Sutherland, Eileen Rowand and Graham Sutherland across the rest of Scotland and I think that is total appealed in that case, had they applied for political opportunism, but— discretionary housing payments? That is perhaps more to the council first and then when we can get on to Q704 Chair: I want to just be clear about this. How the details of the case. I will return to you after that. can we have a position where you are following the Sorry, you have just reorganised the— line laid down by Margaret Burgess—who is I think Eileen Rowand: Yes. I know that of the two cases, the Scottish Government Minister dealing with this— certainly one of the individuals had applied for a DHP. about eviction, while at the same time her party is denouncing you for proposing evictions? I do not Q708 Mike Crockart: With that case, is there an quite understand how these two can be juxtaposed intention to appeal that case on the side of the council? reasonably. Eileen Rowand: The council has considered whether Councillor Ross: I would agree with you. I don’t it would appeal the case and it took legal advice on understand and I don’t know whether it is appropriate that, so we came to the decision that we are not in this forum— appealing the judgment and we have been advised that Chair: Say what you like. it is likely to be appealed by the DWP through the Councillor Ross:—but I think it is a complete Secretary of State. instance of political opportunism that that particular party feels it has to go a step further, to have Q709 Chair: That is right. The issue—as we had something to criticise the administration in Fife with with Glasgow the other day—is that because that was when we are completely consistent with their party a first-tier judgment, that does not set a precedent. If where they are in power in other councils. it is in the general interest to have it clarified by a The other instance I would add, though, and where we second-level appeal, therefore the DWP, representing would not want to go that far, is that the experience the forces of darkness, are taking it forward. I believe in Stirling some years ago where they did Eileen Rowand: That is right. As a council, we introduce a complete blanket non-eviction policy was appreciated that we had this issue that we potentially that the rent arrears went through the roof and that couldn’t apply it to other cases and it would perhaps had huge implications for the Housing Account and be an interest to consider appealing, but we took legal the rest of the tenants. advice, looked at what it would mean for the council and we came to the decision that we would not appeal. Q705 Chair: We have certainly had representatives from the Scottish Federation of Housing Associations and other groups saying that they were not happy with Q710 Jim McGovern: Sorry, Mike. Could I just ask any prospect of a complete no eviction policy, because then, the decision—whether it was by the council or then there was no reason why anybody should pay the DWP—to appeal, it is not so much to overturn the their rent. In those circumstances, there was an issue original decision, it is just to create a precedent? of moral hazard and all the rest of it and there was an Eileen Rowand: It is to get the clarity. We need a issue about engagement. decision in order to know whether it should be applied Councillor Ross: Yes, and I believe that is also to other cases. At this point in time, we have consistent with the advice that Shelter Scotland are inconsistencies where the individuals have appealed, giving. there is a decision that applies only to them, so we really need clarity on what the legal position should Q706 Chair: Indeed it was, yes. So can I just be clear be. then, your position, as you understand it, is in line with both the Scottish Government Minister and with Q711 Jim McGovern: Yes, but the appellants are not that of Shelter and the Scottish Federation of necessarily going in to overturn the original decision, Housing Associations? they just want clarity for the future and whether it Councillor Ross: Yes. creates a precedent. Chair: Yet you are still being denounced by this Councillor Ross: On that point, I think that is the Project Fear that is being run by some people in reason we decided not to appeal, because we want Dunfermline? clarity, but we would be quite happy with the decision Councillor Ross: Yes. As I say, I think there are some that has been provided by the first-tier tribunal, so we people not within that party who have consistently felt feel very uncomfortable about challenging that and that we should have that policy. I quite understand and trying to argue it is wrong. My understanding is that respect their position, but when it is being used for DWP think it is wrong and therefore they are going political opportunism, I think it is out of order. to challenge it. They were not happy with us when we Chair: Fine, okay. Mike. said we are not going to challenge it. Eileen Rowand: Yes, my understanding is that DWP Q707 Mike Crockart: I want to get on to the subject will challenge it because they think it is wrong. of exemptions and particularly recent court cases, of Jim McGovern: Right, that is helpful. I understand which there have been quite a few, and some relating now. particularly to Fife Council. If we can concentrate first on the Fife area, and it is perhaps not just to you, Q712 Mike Crockart: If I can concentrate on trying Graham, but also to the council as well, the case to get the detail of what the impact of it would be. around the size of the bedroom, if we can deal with The tribunal, as I understand it, said that a bedroom that one first. All the tenants who successfully is not a bedroom if it is too small, so have you done cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 103
18 October 2013 Councillor David Ross, Louise Sutherland, Eileen Rowand and Graham Sutherland any work to figure out how many people, how many judge in Fife as being large enough to be occupied by properties would fall into this kind of scenario? an adult. There is an expectation that for the HB regs, Louise Sutherland: What we have done at the if it cannot be occupied by an adult, then the tenants moment is a very quick desktop exercise. We looked do not have the facility of renting it out, which the mainly at the properties that have three or more DWP suggested might be a way of recouping any bedrooms, because two-bedroom properties tend to bedroom tax. You clearly cannot rent it out to kids on have two double rooms. We have not come across a their own; if you cannot rent it out to an adult, then it great number, so we don’t believe a large number of should not be considered to be a bedroom for HB regs our tenants are affected. We have looked at individual purposes. But I can see that a bedroom that is not a cases where there has been a room, for example, bedroom for present purposes may be considered as a without an electrical socket, so we had already taken bedroom for other purposes. a decision to take some of those out of the scope of this. We have done so where there has been a change Q717 Chair: What are those other purposes? in the layout of the property because of perhaps a Charging rent? disability adaptation, but we do not believe there will Graham Sutherland: Yes, charging rent. The RSLs be a large number of tenants affected by a decision might say, “Well, that is a bedroom and you can use that 70 square feet is too small to be a bedroom. it for two children under the ages of 10”, for example, and that is perfectly legitimate. I can understand that Q713 Mike Crockart: In those that would argument, but for housing benefit regulations potentially be affected, if they get redefined as having purposes, we are looking at specific uses and fewer bedrooms, does that not therefore have a knock- strategies that people might have to deploy to mitigate on effect for what rent should be charged for the the impact of the bedroom tax. property? Does it have a knock-on effect for the Chair: So there is not an automatic read-across of the council and housing associations then? question of rental, that the comparison ought to be in Louise Sutherland: It does if it is decided that it is the context of lodgers and renting out a bedroom. not a bedroom. My understanding from the appeal was Right, okay, I think I understand that. Mike. that it was still a bedroom, it was just too small. What we would have to do is if it was decided it was not a Q718 Mike Crockart: That is what has come from a bedroom, you are correct, we would have to look at a decision by a judge in Fife, but the argument is that rental structure. There is only a difference of about we could do with something that applies more £2.50 between the two properties, so the actual drop generally across the country. Now, who should be in in benefit greatly outweighs what we would lose in the business of defining what a bedroom is for the income from the property in any case. different purposes? Is it DWP that you would think that should be giving some sort of guidance on this? Q714 Chair: Sorry, can I just clarify, how can a Graham Sutherland: Yes, I think there should be and bedroom not be a bedroom? How can it be classed as I have no doubt that they will be looking at the various a bedroom for rental purposes, but not classed as a decisions that are coming out. This argument was bedroom for benefit purposes? Have I picked you up accepted by Simon Collins in Fife, but it is also being wrongly there? applied in other parts of the country. We can see Louise Sutherland: No, you have picked me up decisions coming from other parts of the UK that are correctly. It is something that I see as an inconsistency following the tests that found favour with Simon in what has come out of the tribunal. It is a bedroom Collins in Kirkcaldy, and we are getting feedback that would be suitable, according to the QC, for a from London, from the West Countries. There is a guy child under the age of 10. from Rotherham phoned up the other day and said he had found Fife decisions online and had used those Q715 Chair: Right, so there are different levels of arguments successfully in Rotherham, so it is affecting bedrooms then, so to speak? first-tier decisions throughout the UK. Louise Sutherland: Yes, indeed there are. Q719 Mike Crockart: Sorry, are these people that Q716 Chair: Let me just get this right. Potentially, have contacted Fife Law Centre? Have you had— depending on the age of your children and the size of Graham Sutherland: Correct. your bedrooms, you can have a mix. Maybe we ought Mike Crockart:—locals contacting you to say, “I to ask Mr Sutherland about this. This is a difficult one, think this applies to me” and then also people more so we will ask you. Can you just clarify this about generally more widely across the UK? bedrooms and taxes and rentals and things? Graham Sutherland: Yes, we have local people Graham Sutherland: Yes. The QC was persuaded to contacting us with similar circumstances to those who apply whatever legislative provisions there are about have won their deals in Fife. We have also had people over-crowding to this issue of under-occupancy. There from outwith Fife; we have discussions with people, are similar over-crowding provisions in Scotland and as I say, throughout the UK, who want to apply the England and Wales and they provide for different tiers tests that were adopted by the first-tier judge in Fife of occupation of rooms as bedrooms. Essentially and we are getting feedback from people in the UK under 50 square feet should not be considered to be a who have said they have applied those same bedroom for these purposes, between 50 and 70 arguments and they have applied them successfully. square feet can be a bedroom, but for children. Under So the test that Simon Collins was prepared to apply 70 square feet was not considered by the tribunal in defining what a bedroom was for housing benefit cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
Ev 104 Scottish Affairs Committee: Evidence
18 October 2013 Councillor David Ross, Louise Sutherland, Eileen Rowand and Graham Sutherland regulation purposes seemed to be being followed in is carried back more than a year, whether or not the other parts of the UK by other first-tier judges. DHP that has been reclaimed then becomes eligible to Now, you had asked about consistency and the be repaid in the year that has passed or it has to go robustness and clarity of these decisions, and that is into the other year, or is it lost? not going to come from a first-tier decision, as my Eileen Rowand: We are in discussions with DHP colleagues have said. I think Simon Collins has been about the carry-forward arrangements for this current very clear in his arguments that he was prepared to year, so those discussions are ongoing. At this point apply. However, as has been said, a first-tier judge in time, once they are concluded, it will provide us does not even need to follow a decision of another clarity as to how we could deal with that. I think just first-tier tribunal judge. He can take a different a word of caution: I do not know how flexible the approach, so I can see from a legal point of view why DHP budget is with the housing benefit budget as the DWP might wish to have some more clarity and well. Again, we need to look at the technical issues robustness before they consider whether or not they there. should start changing the law. Chair: I think it would be helpful maybe if you let us know what your position was on these issues, because Q720 Mike Crockart: Obviously everybody would again, this was not a matter that we had considered like a bit more clarity and robustness. How long, in when we first started exploring the question of your opinion, will that take? What is the process for bedroom tax, but we will want to make probably a an appeal and how long it will take to go through? recommendation on this as well and therefore it would Graham Sutherland: I don’t know. I cannot tell you be helpful to know what the parameters are for the how long it would take. I imagine you would— discussion. Mike.
Q721 Mike Crockart: From your experience of Q725 Mike Crockart: I have dealt with the these types of appeals? exemption, but I am particularly interested in the Chair: Are we talking decades or days? carry-over aspect, because in previous years there has Eileen Rowand: We have asked the same question, been a significant amount of DHP handed back by “How long before we get a judgment that we can some councils. Now, there was a carry-over allowed use?” and it really depends on how fast the appeals for one year, but my understanding certainly is that are processed. It can take anything up to nine months that was a one-off and that carry-over would be to a year, but I think this is probably a case that allowed for future years. I have certainly asked obviously needs to be heard quickly, so I would hope questions of DWP, and I am sure I received the answer that it would not take that length of time. that that would not be allowed. What impact would that have? Q722 Chair: Can I just clarify, if something takes Eileen Rowand: The latest update that I had was that nine months to a year, for the sake of argument, that there was still discussions about would there be scope takes it obviously into a different financial year? What for carry-forward, but I can clarify that position, happens in those circumstances to people who would because you are obviously in receipt of different have been covered by that? Would it then be information. backdated to the previous year? Mike Crockart: I will dig that out as well. Eileen Rowand: There is scope to backdate. It obviously depends on the judgment that is made. Q726 Mr Reid: The Scottish Government money, is Chair: Yes, assuming the judgment allowed for that ring-fenced for DHP purposes and would it have backdating. to be handed back if it was not spent on DHP Eileen Rowand: Yes, I think there would be a way purposes? for us to deal with that. Eileen Rowand: Yes. We have received it for making discretionary housing payments. I am not aware of Q723 Chair: So just clarify for me then, if there is what the position is if we do not spend the allocation backdating, in those circumstances any DHP that has in full and whether we would be able to retain it or been made was obviously then paid incorrectly and whether it needed to be handed back, but again, I can could in a sense be recovered, but then it would not provide clarity on that. be possible to pay that out again, because the end of Chair: Mike, you want to pick up question 2 on the the year had passed. other paper. I wouldn’t like you to think that we Eileen Rowand: Yes, that could be the case, because thought up the questions ourselves, we get them what happens with appeals, they are appealing the prepared for us, so I just want to make sure we cover reduction of the housing benefit and it may well be them all, especially 2. people who have received less benefit, have been in receipt of DHP that they no longer would have been Q727 Mike Crockart: Thank you, Chair, for your entitled to, so we would obviously have to look at that reminder. This is more for Louise, because it is and look at how we dealt with that. looking at plans going into the future for building new properties, because of course the difficulty that had Q724 Chair: Presumably in those circumstances it caused all of this in the first place is the paucity of the could be an internal transaction within the council, stock of housing and how arguably poor management rather than you are paying out and then taking back, of who is in the size of houses that they are in. What but it would mean transferring money into your cash- are your current plans for building new properties and limited DHP budget. I just want to be clear about if it how do you go about deciding the mix of one, two or cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 105
18 October 2013 Councillor David Ross, Louise Sutherland, Eileen Rowand and Graham Sutherland three or more bedroom properties and what sort of geared towards keeping family together even when the timescales do you have on building those? parents have split. So we have a number of two- Louise Sutherland: We have a plan from this year, bedroomed flats, for example, that would be occupied over the next five years, to provide around 2,700 more by a single parent who only has partial access or affordable houses in Fife. We do that based on our overnight care of a child. housing needs assessment that forms part of our local Chair: David, you wanted to add something to that? housing strategy and it looks at within each borough Councillor Ross: Yes. I just wanted to make the point housing area what the need is and particularly what that we certainly do not see it as a pure numbers game, the specific needs are, so people who are inadequately of bedroom numbers or people. There are a whole housed and have a disability or long-standing illness. lot of other factors, as Louise says, about building We are quite robust in that. It goes in as part of our communities, sustaining tenancies, considering a local housing strategy, so what we build meets what whole range of social need for families that we also the local needs are. think is important to take into account when we are What I would take issue with is that we have badly developing our allocations policy. We are absolutely managed the stock that we have at the moment, confident we have the right allocation policies for the because we are having to apply the solutions for 2013 well-being and quality of life in our communities and to stock that is in the greater part more than 50 years it shouldn’t be just a pure numbers game, not taking old. A lot of it is very high-density two-bedroom flats account of the needs of people. and what we are finding as a side-effect of this change Chair: Why I particularly wanted to pursue that point is that not only are we losing income through reduction in housing benefit, we are finding it more is it has been raised with us before that people are difficult to then reallocate any properties that fall perhaps in houses that are not considered the vacant, because we have been using them, we have appropriate for size for them by the Westminster under-occupied them to maintain an income from Government as a result not of their own decision- them and while we are retaining mainstream lets making, but as the result of your decision-making. taking the same number of days, low-demand housing There is a difference between those who are maybe is now taking around two weeks longer to allocate taking houses now that can be deemed too large for than previously. So the money that is available for them and those who took them in the past when they reinvestment is being lost on two accounts, the lack were being put there by you and it is not their fault. of housing benefit, but also the way we use current So it is a question of people being caught by a policy stock, that we have to promote rebuild in the future. change that is not their responsibility, and I think we We have not looked at notably changing or will be making a recommendation about that in due downsizing the needs for people because by and large, course. many of the people affected by the bedroom tax do not consider themselves to be under-occupying a Q729 Mike Crockart: The only thing that comes out property. If we put a couple into a one-bedroomed from your answer, Louise, that I wanted to come back property, we then expect them to move when they on was the fact that it is taking longer to allocate now have their first child. It is people already on low than it was previously. Can you just explain a little bit income who do not have a lot of money to be mobile. more about what that impact is and how that comes It makes sense for us to help build communities by about? having people stay in the size of house that they can Louise Sutherland: Yes. Because we are allowing see a future in, so for the time being, we are not people, we are not forcing the issue on taking a house seeking to largely change our new build stock that somebody cannot afford at the time of the programme. Sorry, that is a very long answer to your allocation, we do have an excess number of two- question. bedroom properties that we cannot always allocate in some areas of Fife, so these are taking longer to turn Q728 Chair: Sorry, can I just be clear, because I around to find an appropriate tenant for them. We have think this is one of the issues that we have to deal people who are perhaps in temporary homeless with in terms of retrospection. It has been and is your accommodation who do not want to worsen their own policy sometimes to under-allocate people in the sense circumstances by taking a property that they know that you give them houses that are too large for them they will not be able to afford, so we are maintaining at their present time in the expectation that it is a them in expensive temporary accommodation rather lifetime let, as it were, that they will go into a property than putting them into affordable social housing, and that is too big for them, they will then have a family and then they will end up in the property that is too progress that we had made in maintaining our income big for them as they grow older. I just want to be clear by allocating properties with perhaps a spare bedroom that that has been your deliberate policy for quite is under risk now. some considerable time. Louise Sutherland: Yes, it has been. Our allocation Q730 Mike Crockart: So effectively you have a policy was approved sometime during the 1990s and mismatch of people looking for housing and the the size criteria within that. Also what we do is when housing stock that is available, and putting people in anybody has access to a child, we allow them to have difficult situations of having to take housing that that extra bedroom, which the current DWP doesn’t match their needs exactly means that the regulations will not pay a benefit on, and that seems process becomes drawn out? to run counter to other policies that are very much Louise Sutherland: Exactly, yes. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
Ev 106 Scottish Affairs Committee: Evidence
18 October 2013 Councillor David Ross, Louise Sutherland, Eileen Rowand and Graham Sutherland
Q731 Chair: Can I seek clarification on this question Q734 Chair: Sorry, for the sake of the record, just of the homeless? When we were speaking to Glasgow clarify for us the terms that you are using there and last week, they were telling us that there was, as you what the significance of them is. have indicated, a number of people declining to move Louise Sutherland: We would charge a rent of £64.15 out of either hostels or something else into and housing benefit would be payable on that. If that accommodation that was going to be too large for person is subject to bedroom tax and has the them. At what point would it be worth your while to reduction, they may well then choose to try to find pay the difference? In terms of people are in bed and something smaller. Because we have a limited breakfasts, presumably it is a great deal more availability of smaller accommodation and if they expensive than it would be moving them even into a seek that in the private rented sector, it may be that house that was too large for them. Have you they are then taking a property that costs £100 a week considered the council perhaps being prepared to and they would get a local housing allowance to pay charge a lower rent in those circumstances in order to for that. So it would seem more logical to— avoid incurring the bed and breakfast costs or are there rules that would not allow that? Q735 Chair: They would get all of that paid? Louise Sutherland: There are rules that wouldn’t Louise Sutherland: Yes, so it would seem more allow that and Eileen might be able to expand on logical to match the level of housing benefit on some them, but if what we do is charge people a differential of our housing stock to being no more than it would rate for a property, then they wouldn’t be allowed the cost for somebody to be accommodated in the private full cost of that under the housing benefit rules. For rented sector, given that that limit is already in the example, if we have a number of two-bedroomed flats lowest 30% of the costs of that. and we deliberately choose to under-occupy and offer it to somebody who is homeless who only needed one Q736 Chair: That would become an enormously bedroom, we could not then charge them £50 a week complex exercise, since presumably you would have instead of £60 a week because that would be a to calculate what the private rental cost was across a differential rate and housing benefit regulations would whole number of equivalent travel to work areas. not allow that. There wouldn’t be simply a Fife level, would there? You would have to have a whole number of different Q732 Chair: I see. We just wanted to be clear about markets for which separate figures were calculated. an issue like that. Right, any other points that we Louise Sutherland: That is in fact already done, because there is a local housing allowance set. I am have? not sure at what level it is. Sorry, yes, one point that I wanted to clarify, it has Eileen Rowand: I cannot say. been suggested to us that as well as people having Chair: Sorry, when you say what level, is it— taken off them the difference between, say, a one- Louise Sutherland: It is geographic size so I am not bedroom and a two-bedroom or a two-bedroom and a sure if there is a single one that applies. three and so on, the 14% and 25% deduction, was effectively a fine that was greater than the amount of differential. Is that also the case in Fife? Q737 Chair: Right. How many would there be in Louise Sutherland: It is indeed. The average cost for Fife, hundreds or dozens or a couple or one, just to give us a feel? You can maybe let us know. a two-bedroomed property in Fife is £64.15 and for a Eileen Rowand: I have to come back on a previous three-bedroom it is £65.37, so the difference is just question, so I will pick that up. over a £1, yet somebody is getting their benefit reduced by £9. Unlike the private sector, we cannot then go into adjusting our rates on an individual basis Q738 Chair: Because we are not experts in housing because of the DHP regulations. matters and you presumably live with nothing else, it would maybe be helpful if you came back to us with what would be a reasonable proposal for us to make Q733 Chair: If people are being fined in those in this area. You don’t see any difficulty about the circumstances, you can understand why we would general principle about abolishing the fine element of want to say that that was unreasonable. Is it feasible this and just making it the differential? From the to say that in circumstances where the rent differential Government’s perspective, I can understand the issue is less than the 14% or the 25%, it would be the about not wanting to fund under-occupancy, but it is differential that was taken off the benefit or would that the fine element that I think people find really just be too complicated? unacceptable. Nobody that I have come across Louise Sutherland: No, I think that would be a much defends that, so we would want to have that worded fairer way of working and something we could as well. I just want to clarify whether or not that was manage. The other solution would be perhaps to look in fact feasible, rather than running the risk of having at where the rent was less than the local housing one of your recommendations dismissed as being allowance, do not bother to apply the bedroom tax, completely impractical. because essentially what we would be doing is if we Louise Sutherland: Yes, we will put something are forcing somebody out of our social rented housing sensible down on paper for you. into the private rented sector to take a higher rent, Chair: Fine, okay. Now, are there any other questions then nobody wins from that. from us, Alan? cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 107
18 October 2013 Councillor David Ross, Louise Sutherland, Eileen Rowand and Graham Sutherland
Q739 Mr Reid: Yes, just a follow-up. In the case are in financial difficulties and they want to move, where a parent has partial access or partial care of we will do our very best to accommodate their needs their child, is there anything in the regulations that on that. says how many nights a week the child has to spend in the house for that then not to qualify to be judged Q744 Mr Reid: Before the bedroom tax came in, did under-occupation? you have any policy to tackle the situation where Eileen Rowand: From my understanding as the people had a house that was too big for their needs regulations stand at the moment, there is no flexibility and other people were living in overcrowded there. Judging from the appeals that have been heard accommodation? Did you have any policy to try to to date, I think decisions have gone different ways get a better match from the housing stock? regarding child access and there has certainly been Louise Sutherland: Yes, we do. There are two things cases they have looked at where child benefit is paid that we do. We encourage people to register with and that is where the room allowance is given. But HomeSwapper, which helps them mutually exchange, there has certainly been another case where the and we have seen the number of people in Fife who decision went contrary to that. are doing that kind of exchange double over the same period last year, so that is quite positive. But we have Q740 Mr Reid: Thank you. Since the bedroom tax always had a transfer incentive scheme to help people was introduced, have you found an increase in the downsize. Up until April this year, it was largely number of tenants coming to you say that they would geared at helping retired people who are now in a like to move to a smaller property? family home that is too big perhaps to heat, to Eileen Rowand: We have not been able to track that manage, to carpet to move to something smaller. So because there is not a great link between somebody’s the focus has changed somewhat and we now are housing application and their source of income, using it to help people affected by the bedroom tax. because we are not allowed by law to take account of income in that. What I would say is that we don’t Q745 Mr Reid: One of the DWP’s suggestions for have an awful lot of people on our list for a move people to avoid having to pay the bedroom tax was to to smaller accommodation from those affected by the take in a lodger. Does your standard lease allow bedroom tax. Now, that may be because they know tenants to take in a lodger? that we have a limited ability to help and they have Louise Sutherland: Yes, it does, with permission. not come forward, but it is also because they do not deem themselves to be under-occupied. They feel they Q746 Mr Reid: Have you found any increase in need that size of property that they are in. people taking in a lodger since the bedroom tax was introduced? Q741 Mr Reid: Would you have figures for the Louise Sutherland: No, we have not. number of people who last year were in a two or Mr Reid: Okay, thank you. three-bedroom property and who were on the transfer list for a one-bedroom, and the same figures for this year? Q747 Jim McGovern: Could I just ask, when you Eileen Rowand: We possibly wouldn’t, because last say the lease allows, with permission, to take in a year there was no need for us to keep that kind of lodger, under what circumstances would permission detail, so we could probably give current numbers and be refused? just work it out if it has grown from the beginning of Louise Sutherland: If the property was overcrowded the year. or if there was an undue financial gain to the tenant.
Q742 Mr Reid: Could you not interrogate your Q748 Jim McGovern: What is an undue financial computer system? You obviously must know the gain? number of people who are applying for a one- Louise Sutherland: If they were charging a great deal bedroom property and you must also know the size of more than we were collecting from them in rent. the property that they are in at the moment, so presumably you could interrogate your computer Q749 Jim McGovern: All right. Is there some sort system and get those figures. of regulation that allows them to let out a room, as Louise Sutherland: Yes, but people do come off and long as it is just taking up what is known as the on the lists all the time, not necessarily because they bedroom tax? have been housed, and I would doubt whether we Louise Sutherland: There is no regulation. All the could work it backwards. We can try to provide that legislation allows for is that permission should be if we can. sought from the landlord, and we would not be unreasonable in refusing. Q743 Mr Reid: If you could try anyway. Have you Jim McGovern: Thank you. considered changing your allocation policy to give more points to somebody who wants to downsize? Q750 Lindsay Roy: Taking in a lodger seems to be Councillor Ross: We have had some discussion on clutching at straws. Is there any requirement, if the policy level about that and we have taken the somebody takes a lodger in, and they have children, decision that we are going to stick with our that there is a child protection covenant? I think it is assessment of need. However, we also have a policy vitally important that children are protected. Is there that where people are coming to us and saying they anything in the legislation that covers that? cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
Ev 108 Scottish Affairs Committee: Evidence
18 October 2013 Councillor David Ross, Louise Sutherland, Eileen Rowand and Graham Sutherland
Louise Sutherland: I do not believe that there is, but may be looking at security of tenure of no more than I think it has not been a palatable choice for anybody five years. to take someone who is unknown to the household. We have seen people come out of scope because they Q754 Chair: All right. Thank you. Sorry. I did not have maybe taken in a family member or something, mean to interrupt. Were there other points that you but we have not had a great deal of interest or requests wanted to raise with us? about lodgers who are not known to the family. Graham Sutherland: No, thank you. That was it. Lindsay Roy: Thank you. Chair: Certainly from my own experience, I am Q755 Chair: All right. The Sutherlands: this is not a trying to get rid of a member of my family from my family business, is it? This is just coincidence, is it? house, never mind bring somebody else in that we do Graham Sutherland: It is. not know at all. Chair: All right. Lindsay Roy: That is there on the record for him to Councillor Ross: Can I maybe just say a number of read. things that we would perhaps like to see reflected in your report? We have talked about exemptions, and Q751 Chair: He has been told often enough. We we would certainly like to see those expanded for the keep moving and he follows us. At the end of these DHP, and Eileen has already gone through a list, but sessions, we always ask whether or not our visitors on top of that I think there is this issue of tenants who have any answers prepared to questions that we have have requested a transfer and downsizing, but we are not asked; in a sense, anything that they want to make unable to meet their needs. It seems very unfair, when sure that they get off their chests before we finish. Are it is not their fault, they are looking to move and they there any other particular points that you think we then have to pay that penalty. maybe have not covered? Certainly, Mr Sutherland, we have not spoken to you all that much, so I Q756 Chair: What would your view be, then? wondered whether or not there were any additional Anybody who was over-occupying, in Government points in particular that you wanted to raise with us. terms, who was indicating a willingness to move by Graham Sutherland: Yes, just one. I would be applying for a move, if they could not be given a surprised if it had not been raised with you at other move, would they then be exempted? sessions. The introduction of the bedroom tax is Councillor Ross: I think that would be reasonable. predicated to some extent upon a comparison between With all of this, though, the further you go into it, private and public sector tenancies. One effect of the exempting this, exempting that and whatever, the introduction of a bedroom tax may be to force secure bottom line is that the thing is not working, and if it council tenants or RSL tenants into the private sector. is costing money, just scrap it. I recognise there are Can I just say that I have real concerns about that, that limitations in that and we do have to go through some the two cannot be compared? They are completely of these issues. different entities. There are different legal Chair: We feel the Government have conceded that requirements on the standard of accommodation to be they are making this up as they go along and that provided, repairing obligations, and also, so far as they are, therefore, willing to make amendments and tenants are concerned. If you go from an RSL, if you changes, and that is what we intend to propose, so do leave that environment, you are leaving what may not hesitate to— potentially be a lifetime arrangement with your local Councillor Ross: I accept that, but at what stage do authority, which provides you with security of tenure, you make so many amendments and changes that it into a very short-term environment where you might negates the intention? The other one that I think is expect initially a security of tenure of no more than more difficult to deal with is this business about the six months. This is a point that I am really concerned family home, of particularly older couples, families about, that people may be forced out of a secure have moved out, that again there is a degree of environment into the wider world. unfairness, particularly where they would expect to have grandchildren and families coming back to visit Q752 Chair: Can you just clarify for us, then? In them, and have lost that. It is difficult to see an easy an RSL, the normal expectation of tenancy would be way of legislating for that. what? Unlimited? Graham Sutherland: Yes, that is my understanding. Q757 Chair: Sorry, can I just explore that more? It could be for a lifetime. That this was one of the issues that we have discussed with Orkney, Shetland, Western Isles, the sorts of Q753 Chair: All right, and in the private sector, there areas where they are talking very much about would normally be a contract that is what, for six communities, they are talking very much about homes months? for life. What is the answer to something like that? Graham Sutherland: That is a six-month short-term Who would determine that? How would that be tenancy. tackled? We cannot just say to the Government, Chair: But it need not be. “Look, this is a difficult one”. If we are going to not Graham Sutherland: No, but the way the legislation ignore it, we need to be proposing something. has couched it at the moment is that private tenants In Fife’s circumstances, which are clearly not the will be offered short assured tenancy, which can be same as those of Orkney, Shetland and the Western between two and five years. That can be continued Isles in terms of rurality and spread, what would you any number of times, but at any one point the tenant be thinking of as an answer to that? cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 109
18 October 2013 Councillor David Ross, Louise Sutherland, Eileen Rowand and Graham Sutherland
Councillor Ross: I still think it is much more about Chair: All right. Fine. Thank you. the carrot, rather than the stick, and it is about the Councillor Ross: The final issues are to do with the incentives to move and the offers to move and what DHP, and Eileen may wish to add something to this. support you get to do that, and encouraging people, We have always been seeking, and we have had when they are getting older and feel a house is too meetings with David Mundell, and I think with Iain big, that they do move, but we need to recognise the Duncan Smith and Lord Freud as well on this, trying benefits of maintaining stable communities and to make the point all along that we feel we should community links. I think it is best dealt with through have increased the ability for us to top up the DHP if our allocations in housing management, rather than we feel it is needed. being dictated by housing benefit regulations, and I Secondly, the financial assessment regulations should think just leave it to us and we will sort it out. That be loosened. People, if they are subject to housing is my view on this. benefit, are obviously on low incomes already, and to It may be going beyond the scope of this particular then have to go through another financial assessment inquiry as well, but in terms of devolution, I that says, “You have disposable income, you have personally feel there is a good case for devolving £20” or something, does not go very far when you are housing benefit because it is about how housing is on a low income. There should be more. We feel we made affordable. Either you put money into housing, have pushed the envelope as far as we can, without the bricks and mortar, or you subsidise rent through having some kind of sanctions from the DWP people. The two should be very much linked. What questioning what we are doing, but I think we should we are seeing now is a dislocation because those have much greater discretion in how we implement decisions are not matching. those regulations.
Q758 Chair: But when you say devolution, Q760 Chair: Sorry, can I just clarify? What argument devolution is often assumed to mean powers to have you been given about why you should not be Edinburgh. Presumably, in these circumstances, what able to increase the DHP beyond a certain percentage? you would be talking about would be decentralisation Eileen Rowand: It is a requirement in the regulations, almost to the housing authority or to the local so it is not stipulated in legislation of the 2.5 limit. authority, in order that you can match your aims and objectives at a much more local level, and, therefore, Q761 Chair: I know, but if you have gone off to you could have different patterns of this balance argue that that should be changed, the fact that it is in between housing benefit and rental levels determined the rules is not sufficient an argument as to why you almost RSL by RSL or area by area. should not change the rules. That is a bit like local Councillor Ross: I think there is an argument for that authority lawyer-speak, is it not? going further, but a first step would be, given that Eileen Rowand: Yes. We have just accepted it as a housing authority is devolved to the Scottish given, and our discussions with DWP have been that Government, the housing benefit should sit there as it is a given. There is not scope to increase that. well. Then it is a case of discussion between the local authorities, COSLA, and the Scottish Government Q762 Chair: All right. Sorry. I thought, David, you about how that would then possibly flow down further. were saying that you have— I think that is a much wider issue in terms of the Councillor Ross: I have raised it at ministerial level. exemptions there. The second point I would raise is in terms of Q763 Chair: Has there been a rational explanation temporary accommodation being exempted. My as to why not? Nobody else has raised that with us, understanding is that, at the moment, temporary which is why earlier on I was exploring the question accommodation held by the housing associations or of write-off—the Scottish Government covering the other charitable bodies is exempt, but local authority- write-off. Nobody else had suggested to us simply owned property is not, and that is causing a huge issue increasing the DHP. here for us. For instance, we own the properties used Councillor Ross: No. I think the arguments that have by Women’s Aid in Fife, and women coming in and come back are that this would be contrary to the using refuges and temporary accommodation are then policy, which is to reduce the amount of money going subject potentially to the bedroom tax. We feel we into it, and that DHP is supposed to be temporary have been promised, from a long time ago, but it has anyway, so— not happened, that all temporary accommodation, regardless of who owns it, should be exempted from Q764 Chair: The Government want to reduce their these considerations. budget on housing benefit, but if it is reduced by your meeting the costs or by the Scottish Government Q759 Chair: Sorry, can I again just clarify this for meeting the costs, they have still achieved their the record? If Women’s Aid had their own property, objective, presumably? anybody who was in there on a temporary basis would Eileen Rowand: Yes. I think the reason it has not been not be liable for the bedroom tax whereas if you have argued too strongly is that we would rather there were let the property to Women’s Aid, anybody who is in exemptions so that we did not have to use DHP, rather there on a temporary basis would be liable to the than seeking for the DHP to be increased. bedroom tax? Is that it? Chair: I understand that. Councillor Ross: Yes. Eileen Rowand: We would rather that we did not have Eileen Rowand: That is correct. to use this temporary, short-term funding, and increase cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
Ev 110 Scottish Affairs Committee: Evidence
18 October 2013 Councillor David Ross, Louise Sutherland, Eileen Rowand and Graham Sutherland the use of it. We would rather people had exemptions Lindsay Roy: In effect, a hand-to-mouth existence? and the housing benefit was not increased in the first Councillor Ross: Yes. place. Q768 Chair: Presumably the same then would apply Q765 Chair: All right, but they are not mutually to the Scottish Government’s willingness to top this exclusive. up as well. Councillor Ross: No. Councillor Ross: That is dependent on the DHP Eileen Rowand: No. allocation, the regulation.
Q766 Lindsay Roy: This is a very complex system, Q769 Chair: No, I understand that, but as soon as and you are saying a very unfair system. Would it you get one, you would want to have the other as be right to say that your preferred option would be a well— complete repeal of the legislation? Councillor Ross: Yes, absolutely. Absolutely. Councillor Ross: Yes, that is quite clear. We have had Chair:—or you would want to have an assurance that these debates. the same proportions would be applied to whatever the figure was. Q767 Lindsay Roy: It is a huge burden on staff. Councillor Ross: Yes. They have done a tremendous job in the very difficult circumstances, but they are not going to solve it. Q770 Chair: Any final points? Usually when an MP Councillor Ross: The best we can do is do our best says “final” it means he or she is about 40% of the to mitigate some of the impacts. The final point I think way through, but in these circumstances, given that we would make is that, again, the sooner we get you have been here for two hours rather than the clarity on what the DHP allocation is for next year expected one, I think we have just about covered from the DWP, the better, because we cannot plan everything. Graham, in particular, is there nothing else going forward until we know that. At the moment, I that you want to add to that? think that is expected in December, but that is leaving Graham Sutherland: No, thank you. very little time. The experience when this was brought Chair: Fine. Could I thank you very much for coming in was that things were changing almost weekly, if not along? This has been a very interesting session. Could daily, and it made planning and giving people advice I propose that we have a comfort stop for five minutes an absolute nightmare, so the sooner we know what before starting the second session? Thank you. DHP is—
Examination of Witnesses
Witnesses: Norma Philpott, Citizens Advice and Rights Fife, Norah Smith, Kingdom Housing Association, and Craig Stirrat, Fife Housing Association, gave evidence.
Q771 Chair: We are investigating the bedroom tax, 25,000 people. We have had access since March/April and we have already heard evidence from a legal to some additional resources to mitigate welfare expert and from Fife Council. Now, for the record, reform via the local authority and Citizens Advice and relatively quickly, if I could just ask you to Scotland. introduce yourselves and tell us a background of your Norah Smith: Norah Smith, Director of Housing and organisations. Norma first. Care with Kingdom Housing Association. Kingdom Norma Philpott: My name is Norma Philpott. I am Housing Association was established in 1979, and we the Chief Executive at Citizens Advice and Rights offer general needs housing, also specialist homeless Fife. That is the local CAB service. Just very quickly, accommodation, and we have social rented housing we cover the whole of Fife Local Authority, providing and other tenures, ownership, shared ownership, and free, confidential, independent and impartial mid-market rent properties. We have approximately information and advice. We are one of the largest 2,200 social renter tenants, and we employ 350 staff. bureaux. We have over 100 volunteers and over 60 We have an annual turnover of £19.7 million, and we paid staff. There are six public offices, some outreach, work largely in Fife, but also in Perth and Kinross, telephone service, website, and a fairly well developed and in Falkirk, and we are part of the Fife Housing referral system. We are recognised by the local council as having the leading welfare benefit-related Register partnership. issues, and also in money advice. We have a number Craig Stirrat: Thank you, Chair. My name is Craig of specialist projects: Macmillan, Chest, Heart & Stirrat. I am the Housing Services Director for Fife Stroke, an armed services project. All of these projects Housing Association. Fife Housing Association was involve either dealing with welfare benefit issues and/ established in 1997, following a stock transfer from or ensuring benefit checks. Income maximisation Scottish Homes. We are a general needs housing work is covered. association, so basically we have largely family We cover the 15 areas of advice that all CABs do. We houses. Only 3% of our stock is one bedroom, of have a number of local partnerships we are part of which there is a very low turnover. We are based around housing, lone parents and fuel poverty, for largely in the west of Fife. However, we have example, and in the last year we dealt with over properties straddling the coast of the Levenmouth cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 111
18 October 2013 Norma Philpott, Norah Smith and Craig Stirrat area, just under 2,500 houses, and about 18% of our organisations. We are just wanting to look at your tenants are currently affected by the bedroom tax. turnover, and lots of other figures. Are those sorts of Chair: We also had a fourth witness planned, Pauline levels of arrears sustainable? If not, what is the likely Buchan of the Cottage Family Centre, but I impact of them? understand, as you have told us, she is unable to Norah Smith: At the moment the arrears are less than attend. we anticipated that they might be. As I said earlier, I think the discretionary housing payment is masking Q772 Mike Crockart: My question really relates to the problem, and when that stops for one or all of the the level of effect that the bedroom tax has had on the people, then we will see another increase in arrears. I amount of rent you have collected. Could you just do not think it is sustainable. I think it will result in outline, the two housing associations present, how that us having to look at the services we provide, and to has changed since 1 April this year? reduce those services in some form. It would also Norah Smith: We have about 11% of our tenants who likely have an impact on our development programme are affected by the bedroom tax, and that amounts to into the future as we continue to build houses and 357 households approximately. Our arrears have risen having an active development programme. Obviously, by 0.15% in the first six months of this year and by we need to source private funding as well as Scottish 0.22% from September last year to September this Government funding for that development year. We estimated our lost of income could be around programme, and we need to make sure that we stay £215,000 per annum. Year to date, we are sitting at within our covenants. Any increase in arrears would around £41,000. That is not only arrears in relation to be taken into account by our lenders and, therefore, it under-occupancy; it is also arrears that people already might mean that the development programme for the had, but who are also under-occupying, and it is very future might have to be reduced. difficult for us to separate that out at this point in time, The amount of work that is caused by the bedroom although we continue to manipulate our system to try tax both in supporting tenants, which is an important to do that. We have 167 people who are in arrears to part of it, and trying to refine our stats so that we do date, and we estimate that about half of those have fully understand the position, means that other work fallen into arrears since April of this year. We have is deferred or goes by the wayside. We have some 113 tenants who are in receipt of discretionary temporary increase in staff costs to allow us to do the housing payment. We think discretionary housing additional work, and again, if that is a long-term need, payment is a bit of a mask for the real problem at the we would have to consider how that was funded, and moment, and if it were to stop, our arrears would go ultimately may have an impact on the rental that we up again by approximately another £80,000 per charge our tenants. annum. Craig Stirrat: I would not really add to what Norah Craig Stirrat: Our rent arrears have increased from says. I agree wholeheartedly, the implications are 3.2% to 3.7%. That is from April to September. We exactly the same for my association. Just to add know that 119 tenants who were affected by the context to that, though, members of the Committee bedroom tax fell into arrears, who previously were not may be aware that the regulator has highlighted that in arrears, who were in credit. That has caused a net the impact of welfare reform on business plans is a increase in arrears of £10,000. If you do not take into huge, huge risk. It puts all RSLs under further account the fact that they were already in credit with pressure from the regulator to try to mitigate against their accounts, they would have been gross £18,000. the impacts, and on the other side of the coin, lenders We had 105 existing tenants who had arrears of will look in future not so favourably in terms of the varying amounts who went further into arrears by a interest rates. As Norah said, that reflects on how sum of just under £10,000, so we estimate, in total, much we have to charge rents to pay to borrow for just under £28,000 additional gross arrears as a count investment and new build. of people being unable to pay the bedroom tax. Q775 Mike Crockart: There are two basic impacts, Q773 Mike Crockart: I am interested that one then, on the future development because of the costs housing association seems to be able to potentially pin that are associated with it, so that might mean less down an amount that is directly related to bedroom building in the future. The other side, you said, was tax. Norah, you said that it is far more difficult. Is that reducing services. Could you just go into a bit more just because of the differences in the recordkeeping detail about what you mean by reducing services? that you had previously? Norah Smith: We would need to look at the numbers Norah Smith: I think we use different accounting of staff we employ. There is a significant cost within systems. We use different housing management the organisation in terms of employment costs. We systems. We are working with ours to try to refine the would need to look at what work was done and what queries that we can make on the system. There is also was not done to see: are we getting best value for the an issue with the split, for example, of the information services we provide our tenants, and are we providing we receive in terms of housing benefit and how that essential services or are we providing services that is split, and how we then pull that out of our systems. enhance the tenants’ experience of us as a registered There are a number of factors that contribute to that, social landlord, but that are not necessarily essential? but we are doing our best to hone down on that. We have not started to look down that route. We think it is too early. We want to more fully understand Q774 Mike Crockart: It is difficult to tell just from towards the end of this year the full impact, but these the bare numbers what kind of effect that has on your are things that will be under review. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
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18 October 2013 Norma Philpott, Norah Smith and Craig Stirrat
Craig Stirrat: Members of the Committee may also Also, we have been fortunate, I think, here in Fife, be aware that we are obliged to deliver a housing because Fife Council has been willing to set aside charter. That is basically service standards that meet extra funding for the DHP and that side of things, but the customers’ needs. As Norah alluded to, those while it is mitigating just now against some of the value-for-money issues are a fundamental thing. What impacts of the changes, I think it is really covering or are people paying their rent for? Are they getting masking the reality of the situation. value for money in terms of how long it takes to do a repair? How is it done? To what standard? In terms of Q779 Mike Crockart: Obviously, many of the the improvement standards to properties, what sort of people coming to you have very complex and fixtures and fitments do we fit? If we cannot guarantee multifaceted problems, but do you have any feel for a good stream of income, that puts those factors at what proportion of the extra work is coming directly risk. For instance, we have increased bad debt from from the bedroom tax? last year from 1% to 2%, and we are projecting we Norma Philpott: Directly. I just brought some figures. will have to increase it to 3% next year. An alternative I have drilled down as far as I can go around is, as Norah said, for us to put rents up to take account discretionary payments. Just in the period from April, of the loss of that income. we have had 174 requests for help on discretionary payments. We have had 162 inquiries about under- Q776 Mike Crockart: That certainly matches what occupancy. What I have done, if it is okay, I have the council evidence was, that they have gone from brought some case examples. I will not go into too 1% bad debt to 2.2%, so it is a similar situation in many of them, but if I just maybe give you three, both housing associations. would you be interested? Norah Smith: Yes. Chair: If you maybe give us those in writing, unless there is a particular point that you can use to illustrate. Norma Philpott: Q777 Chair: Can I just be clear? As someone I can probably give you the overview of that. looking from the outside, 1% to 2% does not seem very much. Are your businesses operating in such a tight margin that that increase to 2% really makes a Q780 Mike Crockart: That would be good. You difference between surviving and not surviving? have given us figures of what you have had this year, but what I am really looking for is how that compares Norah Smith: I think that is still to be tested. We put to how it was last year. What is the extra work that it up to 2% in our organisation in recognition that the is generated? welfare reforms were going to impact on our income. Norma Philpott: There is the internal extra work, and We have one-year, three-year, five-year and 30-year obviously there has been the training side for our own planning, and those assumptions are built-in over staff in the organisation, but it is also about working those years. Similarly, we then make assessments out with the clients how best to help them, so it has about what rental increases we may have to apply in put demand on our front-line services, the initial point the future to maintain our build programme, to of contact. Additional help has been required through maintain our services to tenants, to maintain the our money advice section as well, so it has hit all organisation and for that organisation to be financially areas across the organisation. stable. Our rents are, therefore, worked out on that What I wanted to highlight is really the fact that, from basis. It may be that, come February when we are what I can see, having read through a lot of our social setting budgets for next year, the bad debt allowance policy work, it has hit those who are already will have to be increased. disadvantaged, who are already vulnerable, and who are already lacking finances. It has particularly hit Q778 Mike Crockart: Can I open it up more widely? people with disabilities, people with families, who We have heard the impact on the housing associations, maybe are separated and they have children to come on your organisations. What has been the impact on and stay, and it has also affected people who really Citizens Advice? were already in trouble. An awful lot of the cases that Norma Philpott: Thank you. We had some inquiries we have, they were borderline requiring financial help at the start, people asking what it would mean and in any case, or financial advice, and the reality is this what the options were, and that was around whether is the thing that has tipped them over the edge and they moved out of the house, if they got extra money, probably brought them in through the door. what they could apply for, that side of things. We then got requests for practical help and advice once they Q781 Lindsay Roy: Can I commend you on the were notified that they were affected, and that was work you have done with my constituency office? often to include asking for reviews about the under- Norma Philpott: Thank you. occupancy side of things, and then we also helped a number of clients with the discretionary housing Q782 Lindsay Roy: How have you managed to cope payment applications, obviously. We are now seeing a with this extra workload? Have you had to take on lot of people seeking money advice, often referred by extra staff or additional hours? the council as there are rent arrears. We are also seeing Norma Philpott: Yes. We have been fortunate in that clients who have to choose really between paying rent we have had access to some additional funding, but and buying food and energy costs. I can only assume, ironically it is at the same time as our core funding obviously, in the light of the announcements of the has been cut. We have had access to extra resources, last two weeks, that position is going to get worse. and this has been either through, as I say, the local cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
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18 October 2013 Norma Philpott, Norah Smith and Craig Stirrat authority or Citizens Advice Scotland. We have used Norma Philpott: The whole position with bedroom that funding in several different ways. One thing that tax has thrown up that as an issue, that sometimes we have done is set up a new project, which has just how the property is being described is not, as you are launched at the beginning of October, around pop-up aware, how it is used. clinics. That is about going out into the area to try to quickly pick up people that have issues, and that has Q787 Chair: No, but you could use a perfectly been again working closely with the local authority adequate double bedroom as a box room, but it would around it. We have also had to put additional resources not then be exempt. You seem to be making a into our representation services, because that is somewhat different point, that people’s individual another aspect, but that is concentrating more on the circumstances, such as maybe handicapped and the claims that are coming forward to do with PIP and so like, are not being conveyed to the council, or the size forth, when that comes in, the personal independence of properties. I am not quite clear what you are saying payments. to us about the information that is not being transferred to the council. Q783 Mike Crockart: One particular aspect that you Norma Philpott: I am saying that because it is not talked about there was families, where the parents looked at in a holistic way, consequently there are have separated, with children. people that are falling through gaps because the Norma Philpott: Yes. council is having to—as are other councils—apply the Mike Crockart: The council had given evidence that legislation. While Fife Council has been a particularly they were basically treating that as an exemption and good council in trying to ensure that people get given them the DHP. exemptions and get DHP, there are still people that are Norma Philpott: Yes. coming to our door that clearly have either not been Mike Crockart: Is it just the uncertainty that is given exemptions or fallen through the DHP process. generating the extra work? Chair: Sorry. That is slightly different. Norma Philpott: Yes. The people come through the Norma Philpott: Of course. door, exactly what you are saying, because they are Chair: If they are being caught by the rules, that is uncertain, they don’t know what to do. When we pick one thing. I thought earlier on you were saying that them up, we are checking their information, and then the council did not have the proper information on we are able to say, “We think you would be probably which to act. eligible to be exempt in these circumstances”. We Norma Philpott: I mean that they are being caught by have also noted that there are one or two people that the rules because the council is having to apply the just kind of fall through the gap in some of the rules, but I think there is a gap in the process that exemption bits, just to do with the ages of children would make things easier. and so on. Q788 Chair: Sorry, can you just clarify the gap in Q784 Mike Crockart: Could we concentrate on that, the process, though? It is either that people are not then, for the next questions? If the bedroom tax was filling the forms in properly, or the housing authority, going to stay, what exemptions do you think should the council’s housing division, is not dealing with its be there that are not there at the moment that would other division, or housing associations are not telling perhaps make it fairer? the benefits sections of the council what the right Norma Philpott: There are exemptions that are information is. already there, but they are not either applied or known Norma Philpott: Obviously, my colleagues will be about, and that is because I do not think, for various able to help me here, but I think sometimes when the reasons, that the council has always had the full housing associations, for example, have described the picture of the person’s circumstances. That is often accommodation, they have described it as X number the findings that we have. It is the individual of bedrooms, and possibly that is not always the case circumstances that probably, if the council had a fuller when you look into it. That is one point that I would picture, would make it easier to apply the exemptions. say. The second thing I would be saying is that we clearly Q785 Chair: Why have people not given their full have had people coming in who have the children who circumstances to the council, then? are staying at weekends and so on, who have not yet Norma Philpott: Because I think the council relies a either been into the system or that has been picked up. lot on the information about house size and so on, and They have come to us as the first port of call for there have been a lot of issues around that. We have advice. come across clients also that maybe have been put into council accommodation, they have had adapted Q789 Chair: We will come back to the question of homes that have also just initially fallen through, but the housing associations maybe not supplying the we have had to act and say these should be having right information in a moment, but surely, if exemptions applied to them. somebody is applying for DHP, in particular circumstances, the onus is on them to tell the council Q786 Chair: Sorry, I genuinely do not quite that, is it not? understand that. Surely, if the council does not have Norma Philpott: Yes, but we have a number of people the full information, we have to work on the basis that lead such chaotic lives, they have had their DHP then that somebody is not supplying the council with form, unfortunately they have not even filled that in, the full information. and then they come along to us. We obviously pick cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
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18 October 2013 Norma Philpott, Norah Smith and Craig Stirrat that side up. In the samples I picked out, there is one Q795 Chair: All right, but by definition almost, those example, yes, where they have clearly not filled in the with the most chaotic lives are unlikely to be form correctly, and the council has been forced to sufficiently organised to come to you. make the decision it has made, but we have gone back Norma Philpott: Yes. and got that sorted out. Chair: What I am not clear about is to what extent you are only getting the tip of the iceberg, or whether Q790 Chair: I am pursuing that because I am not or not you think you are almost sweeping up sure it is fair, in the circumstances, to blame the everybody? council for that. Norma Philpott: To be absolutely fair, I still think that Norma Philpott: No, no, I am not— it is early days in terms of the absolute impact. I think Chair: I am looking for somebody to blame so we there was a short-term impact when people discovered that they were going to be affected by this legislation. can clarify what steps you take to address it, you see. There has then been a medium-term step where people Short of having somebody from either your have been able to apply for discretionary housing organisation or the council go around everybody who payment and that side of things. I think there is a third is hit by the bedroom tax to just clarify that they are potential crisis that is still likely to happen as a result filling in forms properly or that they are eligible or of the longer-term implications of the bedroom tax, not eligible to claim, it is difficult to see what else can plus obviously the wider Universal Credit coming in, be done. the changes to other welfare benefits. In some ways, I Norma Philpott: It is partly to do with the whole am answering your question, saying, “Yes, I think this principle of the bedroom tax or the occupancy thing. is the tip of an iceberg”, but in reality we are not just It is funded on having all the information, but the there yet. reality is all that information that would make better decisions for the clients in the street is not Q796 Chair: You do not have access to information necessarily there. that tells you as soon as people have arrears, do you? It would have to be the landlords. Q791 Chair: All right, but the Scottish Government Norma Philpott: Not at the moment. have been funding additional money for welfare rights Chair: It would only be the landlords that had that, groups. Housing associations presumably have a fairly and then, therefore, it would depend upon them good knowledge of the tenants. Tenants without pursuing some of these cases. chaotic lives and a reasonable level of education Norma Philpott: That is probably not wholly should be able to fill the forms in properly, so a lot of accurate. We also have from the council a referral the basics seem to be covered there, do they not? system, so when people go into arrears, they refer Norma Philpott: Yes, I would agree, but there is a automatically to us. We also do get referrals from proportion of people who are falling through all housing associations. these gaps. Q797 Chair: When you say they refer automatically, Q792 Chair: All right, and this is a relatively small that means they suggest that the people come to see proportion, is it? you? But, by and large, people with chaotic lives are Norma Philpott: It is the ones who are managing to not necessarily going to make that journey. come to seek help from my particular agency. Norma Philpott: A number of people do make that journey, because on a daily basis— Q793 Chair: But presumably for every one that Q798 Chair: How many do? Again, of those who comes to see you, there are, say, 10 that have not? are referred to you, do only 10% reach you, or 90% Norma Philpott: To be fair, I have only pulled out the reach you? statistics around under-occupancy. Obviously there Norma Philpott: I do not know, but we still have are all the wider statistics for the organisations. demand that is not met.
Q794 Chair: What I am not clear about, what I have Q799 Chair: You should know, surely, because the never been clear about in all of this, is the unmet need council would be able to tell you how many people that is not being reached. I am not quite sure whether they are sending to you. it is an iceberg that way or an iceberg that way. I don’t Norma Philpott: Yes. know how the transcript is going to reflect that, but Chair: You should know how many people arrive. for the record, I indicated initially a triangle and then Norma Philpott: That would be a nice idea to have an upside-down triangle, whether or not the section of all that information, but the reality is not quite there the one is most of it, you see, or least. on that. Norma Philpott: Yes. I have only brought the Chair: Why not? evidence of what is coming through the door or on Norma Philpott: It is for the people that come in that the telephone to us, and the cases that we have that are referred to us for money advice—I apologise, I do we would class as social policy cases, which are not have that figure with me today—but it is not for examples of where things are potentially wrong or the wider side of things, and people can access CARF potentially have barriers, or where it indicates that the many different ways. clients are experiencing a great deal of trouble. That Chair: All right. Sorry, Mike. That was a long is what I have brought today, but there will be others. diversion. cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
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18 October 2013 Norma Philpott, Norah Smith and Craig Stirrat
Q800 Mike Crockart: Yes. Extending the same Q804 Chair: You are also saying that the bedroom question to housing associations, being at the sharp tax could directly result in rent increases for your end, if there had to be some change to the bedroom tenants. tax, whether that is the exemptions or anything else, Norah Smith: Yes. what would you like to see done that would limit the Chair: All right. Fine. Thanks. impact on you? Craig Stirrat: It was covered by David from Fife Q805 Lindsay Roy: Norah, you said 11%, I think, Council. A major problem is that we are a family- were under-occupying in your organisation. Is that sized landlord. We offer general needs housing. The right? How many does that amount to? options where people move on quickly are very Norah Smith: That amounts to 357 households. limited. There is a willingness, and that includes the private sector, but there is just no place to go. We Q806 Lindsay Roy: How many have said they would would like to have the concession that, provided they move to a suitable property if they could get one? are actively seeking a move and that could be proven Norah Smith: Initially, when we did a survey last through the waiting list, that they should not be year, there were 104 people who said that they would penalised, that is one single thing that would consider a move. When we have looked at the waiting immediately alleviate things for people, as far as I list, we have 53 households who were on the waiting am concerned. list for a move to a smaller property, the majority of Norah Smith: I would agree with that. I think that those looking to move from two-bedroom to one- would be a tremendous help. bedroom accommodation.
Q801 Mike Crockart: That would be the one single Q807 Lindsay Roy: Have you figures on how many biggest thing that would help? have moved? Norah Smith: Norah Smith: Yes. I do. We have facilitated nine transfers. We have had nine active transfer requests. Two of Norma Philpott: Could I just echo that? I heard the those have refused on the basis of either the size of conversation from Councillor David Ross this the house, surprisingly, or the location of the house. morning, and I think that is absolutely the case. That The remaining seven we have managed to would make a tremendous difference. accommodate with a transfer to a smaller property.
Q802 Lindsay Roy: Norah and Craig, we have Q808 Lindsay Roy: Craig, what about your spoken about the potential threat from the bedroom situation? tax. If this continues for another three years, and you Craig Stirrat: Thank you. The situation for have been doing projections, is it likely to affect the sustainability is a huge risk for us. As I say, we are a sustainability of your organisation? general needs housing provider. We need to diversify. Norah Smith: I think that the organisation will We need to grow to spread the risk. That is not just survive, and I think that we will sustain a good part for the bedroom tax. There is ongoing risk with of what we do, but I think we will certainly be needing people’s ability to pay rent. That is a big problem if it to look for efficiencies and we certainly will be affects our business plan. As Norah outlined briefly needing to look at whether we have to look at a bigger earlier, we have to provide business plans, let’s say rent increase across the board to our tenants to ensure for the next three to five years, with some consistency that we have the income to move forward. We would of what income and expenditure will be, and what certainly be needing to look at our development assumptions we will have for bad debts, voids and so programme as well. on. There is a great deal of uncertainty. It is crystal- ball-gazing at the moment as to really how much this Q803 Chair: Sorry, can I just be clear? When you is going to impact on us, but we are looking at worst case scenario, as I said before, had debt going up to say “efficiencies”, presumably you should be looking 3%. We hope that that will not happen. We are putting for efficiencies anyway, so are you talking about cuts in a lot of work, jointly working with the council, in your service, rather than efficiencies? working with our RSL colleagues, to try to provide Norah Smith: Probably. Things like extended opening services that will help people manage themselves. hours, which we have to make sure that tenants can That is one of the big things, and we have done a contact us at times— lot, and I can go into some of the detail of what we Chair: These are not efficiencies. When people raise have done. the point about, “Yes, we will seek efficiencies”, then In terms of moving people on, interestingly, just it implies that they were inefficient beforehand. What anecdotally yesterday one of my housing officers said, you are really saying is that you would have to make “I have been trying to do matches for transfer cuts in your service. applicants, people who have said they want to Norah Smith: I think it is both. We have a downsize”. They have been up to see them about their responsibility, on a year-on-year basis, to be looking arrears. “We want to downsize.” They are not on the for efficiencies, and we do that anyway. Yes, I think Fife Housing Register—that is the waiting list—so we we will be looking to see, what do we provide and do could not match them, so we have had to re- at the moment that we either reduce or stop doing, in communicate with people. To be fair to Norma, there order to be sustainable and to give security to our is a dependency issue. There are a lot of people who tenants in the future? know there is a problem but put their heads in the cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
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18 October 2013 Norma Philpott, Norah Smith and Craig Stirrat sand, and that is why RSLs and the voluntary sector be converted to a bedroom, if needed, rather than are having to do that much more than they would have having to spend money in the future through the floor had to do before. hoists and things like that. Norah Smith: We also follow a similar allocation Q809 Lindsay Roy: So, you have been proactive in process, so we have people who have been allocated trying to incentivise people to move on. Is there two bedrooms, when, by DWP standards, they would anything you are doing, Norah, to incentivise, to only be entitled to one. Most people, however, when capture that information that would help that transfer they are being allocated housing, do not wish to go of tenants? into one-bedroom properties. Their aspiration, and it Norah Smith: We are certainly in constant contact is an aspiration, is for having a spare bedroom again with tenants, and we have increased the amount of to accommodate changes in their family in the future. tenant profiling that we do. We are actively engaging Additionally, though, in terms of new build and future with tenants who are under-occupying to look at what developments, we have reviewed our development the options are for them, whether that is a transfer programme. We have a three-year ongoing within our own stock or across stock with other development programme. We have reviewed that housing associations and Fife Council. We are not within the last six months to see if there is scope for currently giving any financial incentives to downsize. us to change the plans for some of the developments That would be an additional cost that we would then to include more one-bedroom properties. We have have to cover, and I think the regulator may take a managed to have 47 one-bedroom properties planned, view on that as well. which we had not before, which would be in operation by 2015. It takes two years from changing the plans Q810 Lindsay Roy: Given the grand scheme of to fruition for there to be more one-bedroom things, how high a priority does under-occupancy properties available. have with your organisation? Norah Smith: It has a high priority at the moment, Q813 Mike Crockart: I would just like to ask about and we have diverted significant resources into the other side of the coin—because we are talking dealing with under-occupancy, both in terms of about a mismatch and the number of families that you working directly with tenants and providing have on a waiting list to downsize—do you have information to tenants. But also in terms of the information about the number of families that you backroom work—and we discussed earlier about have who are in too small a property and looking, systems—because this is new, our systems are not set perhaps on the waiting list, for a bigger house? up to accommodate discretionary housing payment. Norah Smith: I looked at the waiting list at the end Those things mean having to do a lot of manual of last week. That is difficult information to pull off manipulation to fully understand the position that we the waiting list but what I can say is that in six months are in, so there is a lot of diversion of resources and of this year we’ve had three families who have additional resources being put into that. upsized, who were in overcrowding situations and we’ve managed to upsize to better accommodation. Q811 Lindsay Roy: This has been a catalyst to bring Mike Crockart: Right, but you don’t know the size about more effective information? of the problem— Norah Smith: Yes, and different information. This is Norah Smith: Not at the moment but given that I not information we would have needed prior to the can’t find that information that is something that I will bedroom tax. work on because I think that is information that we Lindsay Roy: Yes. I understand that. Thank you. need to have.
Q812 Chair: Picking up the question of allocation Q814 Mike Crockart: Okay. Craig, you have, I policy in new build for a moment. You heard the think, more information on other side of things. session this morning, does your allocation policy also Craig Stirrat: No. Yes, you are right and this is when place people sometimes in houses that would be I have let myself down on that. I haven’t brought that deemed too big for them? Sorry, nodding is not sort of information but it can be accessed, there is no recorded, so you have to say. doubt about that. What we do know is in terms of Craig Stirrat: Yes. Absolutely, for the same reason when we are discussing people’s circumstances or that my colleague Louise said, that we do not needs, the circumstances like problems with their rent discriminate against people who wish to get together accounts and their family circumstances, we are and possibly have a family in the future, and so matching people for mutual exchanges. allocate them a house larger than they need, i.e. a What we are doing is even if they are in arrears, which childless couple being offered a two-bedroom house. normally we wouldn’t allow them to move, provided Equally, to be frank, as Mike said earlier, there is a there is going to be a financial benefit, i.e. they may mismatch of supply to demand. There are a lot of be moving from 25% deduction in benefit to 14%, that notionally smaller households in the community, and is still less money they are going have to try and find, that has grown particularly because of the ageing so we will allow them and we will actively match population, so there is a lapse between the sectors people. What Fife Council have been doing is responding to the changing household needs. Equally, encouraging them to use home swap and we do the there is a household life cycle, and many of the new same. We don’t pay for it like the council does but we developments are to the housing for life standards, so advise people. That is a bit of a bug bear for some they can be adapted so that, say, a dining room could people but, anyway, they are free to apply themselves. cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 117
18 October 2013 Norma Philpott, Norah Smith and Craig Stirrat
Q815 Mike Crockart: It would be useful to know Lindsay Roy: Chairman. the size of the other side of the coin because that is the argument for why this is necessary to deal with Q819 Chair: Yes. Right, okay, I take that rebuke. the mismatch and that the historical difficulties of Can I just come back to the question of your new- people being in the wrong-sized houses and the build programme, so to speak? You said you had backlogs that that then creates, so— changed from, presumably, something else to one Norah Smith: We’ll make some efforts to get that. bedrooms. What I am not clear about is whether or Mike Crockart: Okay. not two bedrooms became, as it were, one bedroom or whether or not you simply changed the layouts and Q816 Chair: Can I just confirm that both of you have there are still the same number of, as it were, had a policy in the past of putting people into houses bedrooms overall but what you did was chopped up that have now been deemed to be too large for them your threes into two, ones and so on. and that, therefore, it could be said that this is not the I also want to just clarify the differential in individual’s fault? If there is blame to be allocated it construction costs between, say, a two apartment and is down to yourselves because that was your policy a three apartment because, again, somebody else that and that people are now finding themselves hit with a we had met said to us that they had always tended to bedroom tax through no fault of their own. go for three apartments or fours because the Craig Stirrat: There are circumstance where that has differential was so slight that it gave them a greater happened. People are desperate and needing housing. flexibility and that, therefore, they tended to build We have got housing to let.Where there is no demand larger houses rather than smaller ones. Are you in the from larger household, people will be allocated these same position or does the arithmetic work differently houses. But, equally, we might have allocated a house for you? that was appropriate for their needs at that time and Norah Smith: I will try my best to answer that their circumstances have changed. question. Yes, there are efficiencies in building larger properties and we have done a combination. What we Q817 Chair: No, no, no, I do understand that. have done is to say, can we take two-bedroom Craig Stirrat: Right. accommodations and make them into two one- Chair: I do understand that. We have covered that bedroom accommodations? We have also said, can we point elsewhere. But when we were meeting other look at that accommodation and see whether it would people—I think I mentioned earlier on the Western legitimately be termed a one-bedroom Isles and so on—they were sometimes deliberately accommodation, perhaps with an additional dining over-allocating people, giving them bigger houses room? than they needed at that stage in their life, in the We have done a combination. If you wanted the detail expectation that they would need it in due course. I on that, because it is not my section I don’t have the just wanted to be clear that you had been doing the detail, I can certainly get that for you. Any alterations same thing and that, therefore, it can be seen that some that have been made to the development programme of these people who are in these circumstances it is are all done within the existing financial agreements not as if it were their fault, so to speak, that that was because the agreements are already in place, so we the house they were allocated as the result of your haven’t incurred any additional spend by making the policy rather than their choice. changes. Norah Smith: I think that is quite a simplistic way of looking at it because there are a number of factors that affect the allocation. It is a match between what the Q820 Chair: If you have not incurred any additional individuals needed at that time but also what they spend, what has happened then, you have just the wished at that time. They would put on an application same number of houses and they are just smaller or form what size of property they were requesting. The what? under-occupancy wasn’t around then— Norah Smith: I would need to check that for you Chair: That is right. because I don’t have— Norah Smith:—so there was no thought of that. But Chair: Because you can understand the point we are it was also, as Craig said, about best use of stock and after. is it better to allocate somebody a two-bedroom house Norah Smith: Yes. when technically they only need one, than to have Chair: What I am not clear about is whether or not them either homeless or on a waiting list in poor yourselves have had to change your build pattern as a accommodation or in private accommodation that is result of the bedroom tax and whether or not overall more costly? I think a whole number of things have that is desirable and will we end up further down the led to that factor. Undoubtedly, I agree there are road with a mismatch again but in a different way. people who are in properties that are larger than they Norah Smith: I think that is a distinct possibility. need through no fault of their own, certainly as the What we have done is a very small number of the best choice at that time. total of our rebuild programme but I can certainly get Chair: Right, thank you. you details of that. Chair: Right. Yes, you could maybe just send us a Q818 Lindsay Roy: Would you accept that blame is note with it, just try to outline in words of one syllable the wrong word, responsibility would be the right that we are likely to understand what the implications word? are in terms of rolling forward. Norah Smith: Yes, I think blame is the wrong word. Norah Smith: I will do that, yes. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
Ev 118 Scottish Affairs Committee: Evidence
18 October 2013 Norma Philpott, Norah Smith and Craig Stirrat
Q821 Mr Reid: Yes, I think that the first question Craig Stirrat: What we have done, we haven’t would be for the Housing Associations. With the changed our policy because the difference is we can’t introduction of the bedroom tax there are clearly have a two-tier system where there are people on different outcomes for each individual tenant. They benefits and people not on benefits getting treated could try to find the money to pay the extra rent; they differently with the scheme of allocation. We have one could get into arrears; they could move; they could scheme of allocations and we collectively—across the take in a lodger. Do you have any figures for what the Fife Housing Register, that is the council and outcomes have been for your tenants that are faced ourselves—agreed to monitor and see what the impact with the bedroom tax? would be before we do any knee-jerk reaction into Norah Smith: I don’t have exact figures but I have an taking the positive or negative discriminatory action. inkling around that, having looked at them. In terms of what we have specifically done in the Fife Mr Reid: Okay, an inkling of them is fine, yes. Housing Association, we have an agreement that we Norah Smith: We have had no requests for people to change allocation quotas. We have increased the quota take in a lodger and, again, of course their lease would for transfer applicants who wish to downsize. That is state that they can do so but would need our what we are doing to try and help. If 100 houses come permission but we’ve had no requests for lodgers. We up, say 25 of them will go to those people, provided have a number of people who are using up existing they are smaller than what they have at the moment. credit or credit prior to 1 April that they had in the Norah Smith: Can I just say that I would echo what rent account to cover bedroom tax. We have a number Craig said? We haven’t changed our allocation policy of people who are simply paying nothing, we have a but we have agreement from our committee of number of people who are paying the full amount, and management that we use up to 30% allocation to 113 people who are in receipt of discretionary housing prioritise transfers and we are monitoring that. If we payment and who are paying the additional that that go above that we would go back to say does that need to be adjusted again. So people who are looking to doesn’t cover. We have tenants over the whole downsize would be prioritised if the right spectrum. Just going back, there are 167 people in accommodation was coming up. arrears who are subject to the bedroom tax. Mr Reid: It is 167 in arrears and you quoted some Q825 Mr Reid: Thank you. Craig, do you have other figures there that I didn’t write down. similar figures to what Norah had for how people were Norah Smith: 113 people who are in receipt of reacting to the bedroom tax? Discretionary Housing Payment. Craig Stirrat: Certainly, Alan. As I alluded to before, Mr Reid: Right, it is 167 in arrears, 113 with DHP we have 24% of people, who have just decided they and out of what total? are in for a penny, in for a pound, who were already Norah Smith: 357 in total. in arrears, “Why do we have to pay the bedroom tax Mr Reid: Out of 357 total. as well?” so they are not paying. That is almost 25% Norah Smith: Just to go back to the point that Norma of the 435 people who are affected with bedroom tax made earlier, we also have a number of tenants who and have just said, “Bring it on”. we’ve engaged with since June of last year around the options. One of the options is to apply for Q826 Chair: They are paying nothing? Because Discretionary Housing Payment. A number of those there are different things people can pay. People can tenants have not, for whatever reason, taken up the refuse to pay the 25% that is not being picked by DHP option and we are in the process of again going back or they can be in the position where they are part- to those people to see what the value is to them in paying or they can just decide that even if they were applying for DHP, if in fact they would be eligible. paying everything before they are not paying anything now. What I am not clear about from both of you is Q822 Mr Reid: Has there been a significant number the sort of balance between those different options. of people approaching you wanting to downsize? Craig Stirrat: I can’t say wholeheartedly that those Norah Smith: I think I said we had 53 people from 105 are not paying part. They will be paying an the waiting list who want to downsize. amount. To keep the wolf from the door they will pay something but they haven’t said that is the bedroom Q823 Mr Reid: Yes. Do the associations have your tax element. own allocation policy or is there a quite wide common Chair: Right, right, okay and you are the same. allocation policy? Norah Smith: Similar, yes, but what we get notified Norah Smith: Though there is the Fife Housing is of people’s housing benefit award. They could have Register, we all have our own allocation policies. I a contribution because of many, many factors but we would think they are very similar. I don’t know if can’t isolate the under-occupancy charge from that. you have— We are working really hard with the council and our Craig Stirrat: Yes. Our allocations mirror each other, colleagues there to see what we can do around that. more or less. There are a few points for certain At the moment we are having to do a lot of manual emphasis on crowding or over— work to try and extract as core figures as we can but we are not there at a final— Q824 Mr Reid: Have you changed that policy as a result of the bedroom tax coming in, for example, to Q827 Chair: I can understand the question of arrears give more points to somebody who is affected who building up as a result of the bedroom tax. What we wants to downsize? would hope, I think, would not happen was that cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 119
18 October 2013 Norma Philpott, Norah Smith and Craig Stirrat people’s arrears would then build up by more than Council gave in earlier evidence it is evident why they they had been hit by the bedroom tax, in a sense, probably didn’t look at the private sector. because that is clearly a backward step. Is it the case then that the imposition of the bedroom tax has Q831 Mr Reid: Thank you. To Norma now, how triggered off a greater degree of refusal to pay than many of the people coming to you to talk about the you had previously, so that people are, as you said, bedroom tax are covered by one of the exemptions sheep and lambs or in for a penny, in for a pound, that but were unaware of that? sort of thing? “If I am going to find difficulty paying Norma Philpott: Again, I can’t give figures but I all my rent, I’m now not got to pay any of it” and that would say that the vast majority that come to us, that is a pattern. bring that sort of inquiry, just don’t know that they Norah Smith: I don’t see that as a pattern. I think we might be covered or they might have, again, had an have people who were in arrears prior to the bedroom inkling that they might be covered and be checking tax who are more in arrears because they were in that out. But quite often it is because they have come trouble anyway, this has compounded and they are in for something else and it has just emerged as part unable to pay. of the discussion. They have maybe come in to get Chair: Right. money advice, they have multiple debt and it has just Norah Smith: We have some people who had clear emerged that they have this issue as well. rent accounts at 1 April but who are now in arrears and that is generally only because of the bedroom tax Q832 Mr Reid: Do you find that people are aware and they are not incurring additional arrears to that. that they can apply to the local authority for a DHP Their arrears are small and they may be— or are they completely unaware of their rights in that Chair: It is a bedroom tax element. regard? Norah Smith: It is a bedroom tax element. We have Norma Philpott: There seems to be a bit of a mixed also people who are in credit and who are using that picture, to be honest. Some people will obviously credit to pay the bedroom tax and who, when they get have been very clearly aware, while others, again, it to a zero balance, we will need to see what happens. has emerged when they have been in about something Chair: Right, right, thank you. Sorry, Craig, did you else, they haven’t particularly come in about that, they want to add to that? have come in about the wider money advice Craig Stirrat: Sorry, just that we have people who programmes. have exhausted their credit. In my earlier response to Mike I explained that we have 119 people now who Q833 Mr Reid: Do you have any indication of what were relying on that credit and are now in arrears. choices people are taking when faced with the bedroom tax? Q828 Chair: Are they in arrears for the full amount Norma Philpott: It has been quite interesting and also of their rent or just the bedroom tax element? listening to my colleagues here as well because I have Craig Stirrat: Just the bedroom tax element because probably got some of the bits of information they they were in credit before that. would like to have, including the clients who say they Chair: Right, thank you. are not willing to or disposed to pay as well. Obviously people have come to us and said they are Q829 Mr Reid: Do you have any evidence of people looking to downsize and that side of things. But could giving up their tenancy with yourselves and moving you just repeat your question, sorry? to the private sector? Mr Reid: Do you have a handle on the common Norah Smith: I don’t have those figures, I am afraid. choices that people are making when faced with the We wouldn’t necessarily hold that information. bedroom tax? Norma Philpott: A number are—and, again, I can’t Q830 Mr Reid: Have you noticed any increase in quantify—opting not to pay. A number are hoping that people giving up their tenancies since the bedroom tax they will be moved in to another property but the other came in? property just doesn’t exist. There are quite a few Norah Smith: We don’t have an increase in our interesting ones about this choice of tenants taking voids, no. somebody in to the house with them. I think a lot of Craig Stirrat: We do. In terms of tenancy terminations people are reluctant on the grounds that it is taking in it is peaked this month. When I say this month, it is a stranger. I think also because a lot of our clients the end of September. What we have seen is an have health issues. I noticed one or two, the social increase in abandonments, people just disappearing policy ones, that were flagged up, it was where there and giving no notice. At the last count at the end of might be mental health issues and they were reluctant September from 1 April we had 16 abandonments, to share accommodation with somebody they didn’t normally we would only have about seven a year. know and so on, and that just adds to the stresses in Seven doesn’t sound a lot but when you only have their lives. 2,500 houses that is a lot. People give a number of reasons why they terminate their houses. They don’t Q834 Mr Reid: You have said about people showing always give us the real reason that they are a willingness to downsize but in the evidence we had terminating. All I can say is that we only have four from the council and the Housing Associations is that people who have said they have moved into the that is only happening in a handful of cases. Are private sector but I think for the reasons that the Fife people, when they are expressing a willingness to cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
Ev 120 Scottish Affairs Committee: Evidence
18 October 2013 Norma Philpott, Norah Smith and Craig Stirrat downsize, following that through with putting in a Norma Philpott: I think, like everybody else, there transfer application, do you know? are big issues about the changes to when the monies Norma Philpott: No, no. I think they are just will be paid. There are big issues around how it will expressing that view. Some of them will have done be paid. There are so many unknowns at this stage something practical about it but others haven’t. I can and I think that is the bit, it is the uncertainties. I think see from the case notes and things that are around, a if you know that X, Y and Z is going to happen and lot of people are wanting to live in that same town if agencies as well know X, Y and Z is going to and location and so on. That is often because they happen and this is how it is going to be brought in, have family, they have relatives or, indeed, they have then you can deal with the uncertainties. carers that live in that area. So that is some of the But at this stage I think people are being hit from all reasoning behind that. sorts of directions and it is very confusing. Obviously there is new terminology and new ways of working, Q835 Mr Reid: Are you finding that people are also the sanctions that are around as well. There are a cutting household spending in order to pay the lot of disadvantages to the welfare reform changes and bedroom tax? I think overall everybody would welcome Norma Philpott: Yes, I think people are. Obviously simplification. It is clear from the conversations it is when they come to us they can have options. We have getting more complex to administer. different services where they can get some budgeting advice and partly as the money advice we go through Q839 Mr Reid: Do you think that Universal Credit to find out what people are spending their money on. will simplify things compared with the system of But for many people it is coming to the stage of, “Do several different benefits at the moment? Will I pay my rent, do I pay the balance on that side of Universal Credit make it simpler? things or do I feed the people in my household?” Norma Philpott: I would like to think it would but That is becoming more obvious by the day. Where it the reality will be something different. Obviously we is most obvious to us is obviously the growing number have had the impact of the occupancy changes around of food banks and so on and I am sure you are well that and already people are asking what could you do aware of that. Other evidence—obviously not just to make it different and how could you do this? here in Fife but other evidence across the country— It is all these little exceptions or exemptions that crop indicates that people are having to make choices in that make it very difficult for the man or woman in between eating or keeping a roof over their head. the street to understand. They need to report changes in circumstances, all these different things make it Q836 Mr Reid: Do you have any evidence that very difficult. They then have to seek advice and, for people are able to find, say, temporary solutions an advice agency alone, keeping people updated on because of their savings and that the situation will get these changes is quite a challenge. worse once these temporary solutions are no longer Mr Reid: Thank you. Back to the Housing available? Associations now. Norma Philpott: There are two obvious ones, yes. Chair: Sorry, before you do that, Mike wants to come People will be using savings undoubtedly but I think in, if he could. also the people that have successfully applied for the DHP are probably breathing a sigh of relief at this Q840 Mike Crockart: You are painting a picture but stage, but obviously that doesn’t last and can’t go on it is of the situation as it is at the moment because we indefinitely. The issues are still there very much for have an immensely complex benefit system that does people. not cope well with changes in income, which does end up causing arrears of payments that then have to be Q837 Mr Reid: One of the DWP’s solutions was to claimed back. I am struggling to know why you are suggest that some people could perhaps work extra seeing that as Universal Credit. Universal Credit is hours. Have you any evidence that people are able to supposed to be taking away a lot of those do that? complications and making it much more real time and Norma Philpott: It is interesting, a lot of our clients removing a lot of these things. are working probably more hours in some instances Norma Philpott: My personal view is that I can’t see but then they are being affected by other bits that are that happening. I actually did work for DWP a number going on like zero hours contracts, fair employment of years ago, I have lived through a number of the practices and so on. I was talking to colleagues earlier changes that have been brought in and every time the in the week, and I think the other issue is that perhaps complexities just build and build and build. The the hours can’t be maintained or sustained. Then for problem is the aspiration to have a simple system. Yes, other benefits that they might have as well, the system I can understand about encouraging people to monthly just can’t keep up with all these changes for the budget and so on, but that is against a backdrop where individual so consequently they either end up with people who do know—for example, if they’re being overpayments or in arrears in different ways. paid every two weeks—what they are doing with their money. Q838 Mr Reid: Do you anticipate further issues A lot of the people that are in the benefit system, they arising when Universal Credit is introduced? make it work as best they can but I think what Norma Philpott: Yes. Universal Credit is going to hit is not so much the Mr Reid: Can you perhaps tell us what problems people that are absolutely on the benefit but—other you envisage? than obviously going to encourage them into work, cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
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18 October 2013 Norma Philpott, Norah Smith and Craig Stirrat force them into work and there will be sanctions and and people are used to it. Here in the UK and all that—the problem is the people on low income, Scotland, apart from perhaps if you are in a city where who also receive benefits of varying descriptions. you might go and stay, we are just not used to it. So Universal Credit is not going to be simple for people. there is a whole cultural—I don’t know if “cultural” I will stand by that in 10 years’ time or whatever. is the right word, but there is a whole dynamic like Mike Crockart: Which is not what we are here to that I would have thought. discuss. Q845 Chair: Great. The other point I want to pick Q841 Chair: Could I just come back on some of the up from what we said to Fife Council is about the points that Alan was raising. Lodgers, is there any other way of overcoming the financial difficulties evidence that there are huge gangs of people roaming caused to yourselves as housing associations is for Fife desperate to be lodgers? Are there large numbers yourselves to be writing debt off and then have money of potential lodgers out there that people only need to given to you by the Scottish Government in order to open their doors to and suddenly lodgers will appear? cover that. That would be another way of overcoming Craig Stirrat: No. and mitigating the effect, would it not? Can you see any difficulties in that? Q842 Chair: Right, what evidence do you have for Norah Smith: It is not something that I had thought that? of prior to today so I was interested to hear that. I Craig Stirrat: The fact that when we go into people’s need to go away and think about it, but off the top of homes to discuss their rent accounts with them or to my head I wonder how we apply that across people do new tenancy visits, there is no indication that there who are currently in debt. Do we write off all debt for are people moving in. We don’t have an increase of all tenants or do we look at former tenant debt and requests. As my colleague Louise said you have to get write off only former tenant debt? How do we manage permission to take in a lodger. that? I would need to think that through.
Q843 Chair: No, that is right, I understand that point. Q846 Chair: I am not suggesting this might not be Craig Stirrat: We don’t. difficult, particularly the moral hazard again: if you Chair: But in terms of people who wish to be a make it clear that nobody will ever be evicted under lodger. Not since the time I was a student did I ever any circumstances for rent arrears why should seek to become a lodger. I am not quite sure how you anybody ever pay any rent. The Scottish Federation flag up that you want to be a lodger. If there were Housing Association has made that point clear, people people offering places to lodgers and they were have made that point to us. Given that we are looking unfilled, that would be evidence that there was no for ways in which the effects of the bedroom tax could market there. I am just trying to identify whether or be mitigated, saying that if people could not afford to not it is realistic to suggest that people should open pay a share of their rent as a result of the bedroom their doors to lodgers. tax, where there is a direct connectivity, you can see Norah Smith: I am not sure there is a lot of evidence potentially that being written off and then rather than of that but, coming from another angle, there have yourselves bearing the loss, for the reasons that we been attempts to create shared living situations for indicated, either you would be indirectly supported by unrelated people, in particular around relieving the Scottish Government to compensate for that, or homelessness. There have been positives in that but some other form of words would be found that would there also have been difficulties because the evidence allow an equivalent amount to come in. That would suggests that unrelated people who don’t know each be effectively a means of mitigating the impact. other don’t want to share accommodation. I would Norah Smith: It is certainly worth thinking through. suspect that the same might apply to lodgers. It might Craig Stirrat: I think it is an excellent idea. I am sure just be a reference point but I can’t say any more than we can come up with some sort of formula based on that about it. the stock that is available and a person’s willingness to move. If they can’t move landlords, then we have Q844 Chair: Right. You can see why we want to say to identify that portion and submit it either at the end something back to Government about how realistic of the financial year or start of the following year for their aspiration is—that people should take in lodgers. that cover. We are struggling very much for evidence of any sort on it at the moment. Norma. Q847 Chair: Right. We are very keen to make sure Norma Philpott: I am just going to talk totally off the that we do not go down this moral hazard route and top of my head but I would say, is it not a cultural we do not seek to encourage people simply not to be issue, cultural in widest possible sense, that we are paying their rent at all. Unless I am mistaken, I think not used to necessarily sharing our houses with we can distinguish between the burden being placed lodgers? There are other countries, and I can think of on people as a result of the bedroom tax and the Germany, for example, where it is quite often the case normal burdens of rent that would be due to them. that people will put on websites and so on saying Therefore, that might be practical and feasible. What looking for man, woman, whatever to share. A lot of we would also want to know is whether or not there times it is because it is rented accommodation but the are any recommendations that you have of other ways person takes charge of that flat and is responsible for in which the bedroom tax could be mitigated? I notice finding flatmates or whatever to go into that. There that in the paper that we had from the Fife Housing are schemes and processes that allow that to happen, Association there was definite call on the UK cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
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18 October 2013 Norma Philpott, Norah Smith and Craig Stirrat
Government to have a further investigation into were avoiding increased costs, then presumably just alternatives to encourage people to downsize, but simply in management terms—I think Glasgow said which would not penalise them when they could not. that, yes, they were going to pay for removals, and What did people have in mind in terms of a further they did not seem to have an issue about the regulator. investigation into the alternatives to encourage people Either that or the regulator was not aware of it or they to downsize? had not thought of it or they do not pay any attention Craig Stirrat: We do not have explicit alternatives to the regulator, I do not know which it might be. Are identified yet. There are a number of ideas, but we do there other incentives that you can think of that we not have anything tangible at this moment in time. might want to pick up and say to the regulators that these are the sort of things that should be taken on Q848 Chair: Right. When we saw Glasgow, if I board? We would welcome having feedback from remember correctly, they were saying that they would yourselves on that. We had not thought of that pay the costs of removal for people, for example. One ourselves. of the points, Norah, I think you said earlier on which That is us just about come to the end. I am presuming surprised me slightly was you didn’t think you could that yourselves and the local authority who is provide incentives to people to move because you responsible for some of things work well enough thought the regulator would give you a going over if together and there is no structural difficulties that you did. stops yourselves and the council having a good Norah Smith: Sorry to interrupt. I think they would relationship. have an interest. Norah Smith: No, we work very well together. Chair: Right. Chair: They are sitting at the back, so you have to be Norah Smith: What was in my mind is the subsidy of very careful, I understand that. I was not sure whether one tenant to another, and I may be misplaced on that. or not there were any rules in place that either stop We need to have a look if there are actions that we them or you being as helpful as you— can take, which by taking we may still incur some Craig Stirrat: If anything, Chair, this has brought us spend but by which we prevent arrears for tenants and closer together, we have a common goal now. we minimise our loss. I do not think it is an on a roll Chair: That is nice. situation. As Craig described earlier, we took a similar Craig Stirrat: Group hugs and all the rest. approach in transfers when previously we would not have agreed to transfer when a tenant was in arrears. Q851 Chair: Right. Well, we will not explore that However, if by assisting a move to a smaller property further at the moment. As we said before to the we can stop the arrears from increasing for that tenant previous group are there any answers you had and minimise partly the loss to ourselves, then why prepared to questions that we have not asked? would we not do that? That is a sensible alternative. Anything you want to make sure that you leave us If there are incentives that we can think of that allow with? Norah. us to assist tenants to minimise their rent arrears and Norah Smith: Yes, please. It is in relation to the first to minimise in some way some of our losses then we tier tribunals. We were landlords in two of the tribunal should absolutely be thinking about that. decisions. We welcome the decision around an individual who receives support being exempt and we Q849 Chair: Yes. Can I just clarify, the rule about have been deemed as being exempt on supported not allowing somebody to move if they are in arrears accommodation. It is great outcome for the tenants; a is a policy matter for individual associations, rather good outcome for the organisation. Some of the other than being a centrally decreed line, is it? rulings leave us with questions, so it was just to say Norah Smith: Yes. I should have said also it would we are thinking about those, particularly in terms of depend on whether there was a payment plan in place the sizes of rooms and what we do in the future. We and active, and had been stuck to for three months. are in discussions with the council about what we do That is the bit I missed. So if somebody is in arrears with that into the future. We would also welcome but they have a payment plan agreed and they have clarity from the second tier ruling to give us some adhered to that for three months we would agree a guidance on that. Although that may also tie us into a transfer. position that we have to think carefully about and Chair: But not if they didn’t? which may lead us to having to remodel our stock. Norah Smith: No. But we have reversed that now. But the second one is— What we had said is that when people are in arrears Chair: Sorry, what does that mean? because of the bedroom tax and we can find Norah Smith: Well, if the second tier tribunal rules accommodation for them to downsize to, as long as that under 70 square feet can’t be used as a bedroom we get agreement from them to pay and, if there are then we have to think through what that means to us. other arrears, to get a payment plan—it can be for The second one is around the use of accommodation. small sums of money two or three pounds a week— What we would want to say and put on the table is we will accommodate a transfer, because it is in the when tenants sign up to a property, they sign up on tenant’s interest and it is in our interest as well. the basis of the number of bedrooms and the number of apartments. We make agreements on the rent based Q850 Chair: Right. On this question of the regulator on that. If the tenants then choose to use that and the possibility of them giving—we are not differently the landlord does not have any say in that, allowed to use that expression—a row. If you were unless it is being used illegally. Therefore, that also able to argue that by paying the cost of a removal you causes us an issue as we go forward, because we cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG06 Source: /MILES/PKU/INPUT/035419/035419_o006_michelle_131018 CORRECTED Final.xml
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18 October 2013 Norma Philpott, Norah Smith and Craig Stirrat would not be willing then to re-designate a house as to help our tenants. If we are unsuccessful in a bid having one bedroom instead of three, when the plans and we can’t procure the third sector to come and help clearly show that it was developed as a three-bedroom the tenants, we are missing out on that. We have been house, as an example. fortunate with two recent projects where we have the money, Canny Budgeting is one example that Q852 Chair: Sorry, I hear the words, but I am not Changeworks runs for us, for the RSLs. We are quite sure I understand it. Presumably if someone is, finding we need more and more of that type of wider say, handicapped and a couple cannot sleep together role support for our tenants, particularly with the under the terms of the bedroom tax, they would not expected Universal Credit coming in and the be deemed to have an extra bedroom, but you would expectation, that is Welfare to Work, that people will still have it as classed as two bedrooms? be helped. We can see more pressure on landlords Norah Smith: That is right. That is a different having to help their tenants, help them into work. That situation. It is where the tribunal has ruled that a is a cost that the landlord cannot bear. The only other house, which we have designated as a three-bedroom way we could do that is for bidding for funding to house, should really only be seen as one bedroom help us do that. It is becoming increasingly difficult because of how the property has been used by that to get that funding. I do not know if it is within your tenant, and possibly tenants previously. So a bedroom remit, but— being used as a living room. Chair: To whom do you bid? Chair: Again, and maybe I am misunderstanding that, Craig Stirrat: For instance the big lottery. We also my understanding was that those sorts of positions recently applied to SLAB, the Scottish Legal Aid were only applying to disabled people. If people used Board, for funding for a money adviser that could be their room as a store room, it was a bedroom being shared among the social landlords, and we were used as a storeroom. unsuccessful with that one. We are having to bid for Norah Smith: No, however, we have one example resources because there is cutbacks in the third sector where the first tier tribunal judge ruled that it was a in the funding that they are receiving, it is an ever three-bedroom house. One of the bedrooms is called decreasing circle. We know it needs to be done, and into question because of the size. The other bedroom it is increasingly falling on the landlords to pick up was called into question because it was a dark and the tab. dingy space and it had traditionally been used as a sitting room. They would deem it as a one-bedroom Q854 Chair: Right. There are a number of issues that accommodation. are being stirred up as a result of this investigation. Chair: Right, I see. We have some doubts though about how widely we Norah Smith: So nothing to do with disability or can pursue them because otherwise it is like a ball of needing the extra room for two people sleeping wool, we just end up running around in circles. We separately. This was somebody with no disabilities, it are very keen to try and get some recommendations was simply about the property. out on this very quickly. Any other final points? Norah Smith: No. Q853 Chair: Craig, you wanted to mention Chair: Okay. Well, I thank you very much for coming something. along, which has been very helpful. If as a result of Craig Stirrat: Right, Chair, as you are aware most our discussions here today on your way home you RSLs have a wider role, and that is to promote the suddenly remember that there is something you well-being of the community and social responsibility, desperately wish you had told us, by all means write but also to help tenants direct. We have been good in. Or if you see other evidence and you want to with that. In Fife we have the Fife Housing Alliance, respond to that, by all means send us in something which is all the RSLs working together. We have to else. In the meantime, I thank you very much for bid for money. We are having to bid for this money attending. cobber Pack: U PL: COE1 [SE] Processed: [10-12-2013 14:44] Job: 035419 Unit: PG07 Source: /MILES/PKU/INPUT/035419/035419_o007_michelle_131030 - CORRECTED Final.xml
Ev 124 Scottish Affairs Committee: Evidence
Wednesday 30 October 2013
Members present: Mr Ian Davidson (Chair)
Mike Crockart Mr Alan Reid Jim McGovern Lindsay Roy Graeme Morrice ______
Examination of Witnesses
Witnesses: Michael Cameron, Chief Executive, and Kirstie Corbett, Analysis and Research Manager, Scottish Housing Regulator, gave evidence.
Q855 Chair: I welcome you to this meeting of the Q857 Lindsay Roy: That is a very high return rate. Scottish Affairs Committee. As you are probably Kirstie Corbett: Yes. aware, we have been having an investigation into the impact of the bedroom tax in Scotland. We are looking Q858 Lindsay Roy: What are the key things you at not only the actual impact but ways in which the learned from your survey of rent arrears and social bedroom tax could be mitigated by actions taken by landlords in Scotland? It is a big page. either the Scottish Government or UK Government. Kirstie Corbett: I am trying to find the right page. We want to explore those issues as well as the detail Essentially, the big picture headlines are that rent of the figures. Can we start off by asking you to arrears are rising, both for local authorities and introduce yourselves and telling us a little about the registered social landlords. In response to our survey, organisation that you are representing? in figures for June 2013, we see that there has been a Michael Cameron: I am Michael Cameron, chief year-on-year increase in arrears levels as a percentage executive of the Scottish Housing Regulator. of rental income from 2011 through to 2012 and 2013. Kirstie Corbett: I am Kirstie Corbett, analysis and That was in June in response to our survey questions. research manager for the Scottish Housing Regulator. When we looked in a little more detail at data we Michael Cameron: Thank you very much for giving already hold from registered social landlords—that’s us this opportunity to present some of the findings of not looking at local authorities—we were able to look our recent research into the impact on landlords’ rent at their data for the year-end at March in each of those arrears as a potential consequence of welfare reform. three years and compare where a seasonal fluctuation We are the independent regulator of social landlords might lie between March and June for each of those in Scotland, and we are directly accountable to the years. We saw that across those three years there had Scottish Parliament. We have a single statutory previously been a downward pattern between March objective, which is to protect the interests of tenants and June, but this year that reduction was smaller than and others who use the services provided by social it had been in the past. Would you like to look at landlords. By that, I mean housing associations, under-occupancy just now? co-operatives and local authority landlords. Lindsay Roy: Yes. Our functions are to monitor, assess and report on Kirstie Corbett: In terms of under-occupancy, we Scottish social landlords’ performance of their found that 13% of tenants—one in eight—were under- occupying, in relation to the coverage from our survey housing activities, and, in addition, to report on RSLs’ respondents, and that equated to about 14% of local financial well-being and standards of governance, and authority and 11% of RSL tenancies. The split to intervene where necessary and appropriate. We between two-bedroom and one-bedroom under- regulate to protect the interests of about 600,000 occupancy was roughly 16% for two-bedroom under- tenants in Scotland, and that equates roughly to about occupancy and 83% for one-bedroom under- a quarter—20%—of all households in Scotland. We occupancy. That split was very much mirrored across also have regard to the interests of anyone who is local authorities and registered social landlords, so made homeless, or threatened with homelessness, in there was no real difference when we looked at that Scotland; about 100,000 households who receive underneath the national level. Would you like me to factoring services from social landlords; and over 500 continue with some of the other findings? Gypsy/Traveller households who receive services directly from social landlords. Q859 Lindsay Roy: Is there anything else that is key to this? Q856 Lindsay Roy: You mentioned a survey. Can Kirstie Corbett: In terms of attribution, we asked you tell us how robust and comprehensive it was? landlords to estimate in their own words their own Kirstie Corbett: The responses to the survey covered perception of the level of influence that welfare 85% of the local authority and registered social reform was having on their levels of rent arrears at landlords in Scotland; of approximately 181 the end of June this year. Two in three of them organisations, we received responses from 157. That suggested that welfare reform impacts were equates in terms of tenant households to accounting for up to around 5% of their current arrears approximately 80% coverage of the 600,000 tenants levels. Underneath that, they were almost all very Michael mentioned. confident in their assessment of that level. There were cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:44] Job: 035419 Unit: PG07 Source: /MILES/PKU/INPUT/035419/035419_o007_michelle_131030 - CORRECTED Final.xml
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30 October 2013 Michael Cameron and Kirstie Corbett slight differences between local authorities and arrears—I am sure many people had—but it has not registered social landlords in the level of attribution gone up nearly as much as we might have expected. given to the impact of welfare reform on arrears Michael Cameron: At some level that is not hugely levels. Local authorities were estimating a slightly surprising to us, in that we are only three months into higher impact at the end of June. They also felt less the first of the changes that come from welfare reform. confident about their own assessment of the impact. We have certainly been aware that, in the run-up to Finally, on actions and challenges, actions undertaken the introduction of that particular measure, landlords tended to be very tenant-focused and were equivalent have been working extremely hard to try to put in across both registered social landlords and local place the necessary mitigating actions. We are also authorities. In terms of challenges faced, there was a aware that discretionary housing payments have had a lot of consistency across all the landlords we very direct impact in mitigating some of the potential surveyed. They tended to identify increasing impacts of that change. There is also anecdotal workloads, income reduction issues and empowering evidence that suggests that tenants themselves are and passing information on to tenants as being the making every effort to pay the money that is three biggest challenges they would face. There was a becoming due to them. slight difference in the profiles between local That said, we are seeing change. The figures are authorities and RSLs underneath that, in that local demonstrating that in the period March to June there authority landlords identified housing stock as an issue has been a smaller reduction in the level of arrears for them, whereas RSLs tended not to do that. than we would have expected to see had we been looking at the trends in previous years. Q860 Lindsay Roy: It was pretty comprehensive and robust. Q865 Chair: So that we have it on the record, can Kirstie Corbett: Yes. you clarify why you would expect these seasonal fluctuations? Q861 Lindsay Roy: I am sure colleagues will pick Michael Cameron: This is a phenomenon that is up some of these other points. Can I ask you to pretty well known in landlord circles. We see seasonal explain any differences in arrears between this year variations, or in-year changes, in arrears levels for and previous years, apart from the bedroom tax? Do various factors. It is not uncommon for landlords to you have any evidence? see their arrears go up over the summer months during Michael Cameron: We do. Every year, for one part the school holidays—holiday periods—and around of the broader group we are looking at—registered Christmas and new year when you would expect the social landlords, not local authorities—we collect data financial pressures on households to be at their most on their rent arrears. In terms of changes over the last intense. That is a well-understood pattern in social three years, in cash terms we have seen a steady housing. The pattern we are seeing here mirrors that increase in rent arrears in that period. However, that traditionally understood pattern, although the changes translates into a relatively stable position when you are smaller. look at the amount of arrears in cash terms against the income level that a landlord would expect to receive. The overall level of rental income that RSLs are Q866 Lindsay Roy: Have you any indication as to expecting to get has also increased over the three whether discretionary housing payments have been for years. That has kept the percentage figures relatively a three-month, six-month or 12-month period? stable, but there has been a year-on-year increase in Michael Cameron: No. cash terms. Kirstie Corbett: We do not have any information directly from our survey or our evidence based on Q862 Lindsay Roy: What other reasons might have discretionary housing payments. contributed to the arrears? Lindsay Roy: There are a fair number of variables. Michael Cameron: Other than possibly welfare reform? Q867 Chair: It is helpful to have that explanation of Lindsay Roy: Yes. the seasonal variations; otherwise, people could have Michael Cameron: We do not have direct evidence or drawn the conclusion that the introduction of the information necessarily to conclude what they are. I bedroom tax resulted in a drop in arrears, which is think it is relatively safe to assume that the general somewhat counter-intuitive, isn’t it? Unfortunately, more challenging economic environment over the last the record does not pick up nodding. If you want to four, five or six years has fed its way through into express a view, nodding is not sufficient; you have to tenants’ pockets. say something. Following up the point made by Lindsay about DHP, Q863 Lindsay Roy: That is your informal do you have any evidence, even anecdotally, that the assessment. payment of DHP has had an impact on the arrears Michael Cameron: Yes. figures? Common sense would tend to indicate that it has, but can you elaborate any further? Q864 Chair: But the increase in rent arrears has not Michael Cameron: Our understanding from anecdotal been particularly noticeable, has it? Am I right? It is feedback from various landlords and other marginal. I had anticipated that as a result of the representative bodies is that DHP has had that bedroom tax there would be an increase in rent mitigating effect in the early months. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:44] Job: 035419 Unit: PG07 Source: /MILES/PKU/INPUT/035419/035419_o007_michelle_131030 - CORRECTED Final.xml
Ev 126 Scottish Affairs Committee: Evidence
30 October 2013 Michael Cameron and Kirstie Corbett
Q868 Chair: To what extent? Would arrears have Q873 Chair: Why might that have occurred? doubled, quadrupled? Would it have been less, just a Obviously, there has been a policy decision to build 2% increase? Do you have a feel for it at all? different sizes, but what has motivated the RSLs to Michael Cameron: The short answer is no; we don’t build smaller houses than local authorities, or are the have a feel for it. We do not have evidence at this local authority houses older? They are inheriting stage to determine what that scale of impact may them, and the new houses built by RSLs are smaller. have been. Can you try to help us with that? Michael Cameron: It is likely to be a consequence of Q869 Chair: Is it reasonable for us to draw the housing policy over many years, and the fact that conclusion that any money that has been paid out as more RSL stock is more recently constructed and DHPs would otherwise appear as arrears? therefore will reflect more closely current Michael Cameron: To an extent, yes. It assumes that demographics, or at least more current than those in the tenant would not have made the payment if they play when local authorities were building houses. An had not received DHP, which is not an unreasonable interplay of both those things is likely to contribute to assumption but is not necessarily, or automatically, that factor. the reality. Q874 Chair: When we met some of the more rural Q870 Mr Reid: Thanks very much for coming along. authorities, they told us that quite often they built for In regard to the estimate of the percentage of arrears life, as it were. People would go into a house that was attributable to the change in housing benefit, I see that too big for them; they would have their family and it the tendency has been for local authority landlords to would be the right size; and they would grow older in estimate that a higher proportion of arrears is it and then it would be too big for them. There was attributable to housing benefit reductions, but in the that expectation. Would that be disproportionately the next table they are a lot less confident of their case with local authorities? The second point I throw estimate. Do you have any evidence to suggest why in is that some people were saying to us that the that should be so? amount of cost differential between, say, a one or two- Kirstie Corbett: There is some evidence to suggest, bedroom apartment or between a two and a three, from our research anyway, that there is perhaps a meant that it was not all that financially slightly different pattern of under-occupancy for local disadvantageous to build a slightly larger house, authorities and RSLs, which might lead local because the difference was marginal. Therefore, they authorities, to some extent, to feel slightly more at risk would just err on the side of caution and build from arrears at the moment. something larger. Is it the case that local authorities tend to do that more than social landlords, or are there Q871 Mr Reid: Is that because they have more other factors we ought to be aware of? people under-occupying? Michael Cameron: It is probably relatively complex, Kirstie Corbett: That could be one reason. As part and that will reflect the different policy decisions over of this research, we have not looked into a detailed the long number of years that social houses have been explanation of the causal relationships, so we are not really in a place to be able to comment very built. There has been a general policy in Scotland that confidently on that at the moment. Let’s hope that houses would be built in such a way that they could perhaps over time, as we continue to gather that kind accommodate a person through their lifetime of need, of information over this year, we will be able to have and that may very well mean that they were initially a more confident statement on it by this time next accommodated in a house that technically could have year, but we cannot draw very confident conclusions been larger than their requirements. There is also a around that just now. Michael may have something clear understanding within Scottish social landlords else to say about this. It is possible that the pattern of that people would be able to remain in their house housing stock across RSLs and local authorities may even when the need for a house of that size was have some impact on that level of certainty for local perhaps diminishing, as family situations changed. authorities as well. There is a lot of interplay between the different subsidy arrangements over the decades in terms of Q872 Chair: Sorry, can you clarify what that means? Government policy directing particular types and sizes I hear the words but I do not quite understand why of houses to be built. Changes in demographics are there would be that difference in perception as a result important as well. We now have far more smaller of different housing stock. households looking for accommodation than we have Michael Cameron: I should preface these comments had in the past. All of these things interplay to give by saying that we collect information from RSLs; at you a complex and mixed picture in terms of stock this point in time, we do not hold information for local availability and apartment size. authorities. We collect stock information for RSLs by apartment size, so we know the distribution of stock Q875 Chair: Is there a Scottish dimension to this? In in that tenure across the different sizes of houses that terms of all these statistics about sizes and the like, are available to tenants. We do not have the same are things different in Scotland because of policy information for local authorities. That said, it is our difference, attitudinal difference, or anything similar, understanding that local authorities have more larger- which we ought to be aware of, and which would sized accommodation and, therefore, may be more affect the way the bedroom tax has impacted exposed to issues of under-occupation. Scotland? cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:44] Job: 035419 Unit: PG07 Source: /MILES/PKU/INPUT/035419/035419_o007_michelle_131030 - CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 127
30 October 2013 Michael Cameron and Kirstie Corbett
Michael Cameron: I have not looked at that type of change. That is not a new practice; it has been analysis, so it would be pure speculation on my part. happening for some time now, because they recognise Chair: We assumed that you knew everything about that it is absolutely in their interests in meeting these matters. housing need to get the most out of the stock available Michael Cameron: We like to think we know most to them, but it has always been countered by a very things. clear understanding on the part of Scottish social Chair: I’m glad we managed to catch you out on landlords that this accommodation is people’s homes. something. Michael Cameron: That comparison between the Q879 Chair: I am not sure whether that was a yes or position in Scotland and the wider UK may be a no. something some of the housing academics have a Michael Cameron: You are right; it was neither a yes closer feel on and a stronger picture than we would nor a no. necessarily have. Q880 Chair: I am trained to spot that. Do you have Q876 Chair: Would it be fair for us to look for a an observation, or do you not want to give an difference between rural and urban? When we were observation? speaking to the rural people, they were the ones who Michael Cameron: In looking at how allocation raised with us the idea of a house for life, and policy and practice develop, it seems entirely obviously distances there are far greater than in the reasonable, whether as a consequence of the changes city. If we were looking at housing patterns in detail, that are at the heart of the discussion or of other would we see more under-occupation in the Western factors in play, not to consider any kind of Isles, Shetland, the highlands, Argyll and such areas penalisation of a tenant until there is an opportunity compared with Glasgow and Edinburgh? for them to exercise genuine choice. Michael Cameron: We have not done that type of analysis, principally because we do not have the Q881 Graeme Morrice: To go back to the survey information that would enable us to look at the level and the question of arrears, maybe you can reiterate of under-occupation in that way. Having said that, it is reasonably safe to assume that it is more difficult in the figures you gave earlier for the number of housing a rural setting to find an alternative smaller house for bodies you surveyed. somebody who is currently occupying something that Kirstie Corbett: We had responses from 157 could technically be beyond their actual needs, simply organisations in total—157 landlords; 20 of them were because of distance and dispersal of the stock. local authority landlords and 137 were RSLs.
Q877 Chair: I was just wondering whether or not it Q882 Graeme Morrice: That’s fine. Thank you very was exacerbated by the fact that they had been much. It was a comprehensive survey and, as someone deliberately, as an act of policy, building fewer of said earlier, quite an impressive response rate. You them. have a lot of data. In terms of arrears, did you find any Michael Cameron: It is possibly the case, and some significant variances among the housing associations, of the policy positions that I touched on could very leaving aside local authorities for now? Did you find well have led to that exacerbation. any significant variance in rent arrears? Kirstie Corbett: Not a huge amount. I would perhaps Q878 Chair: If you have not thought about this direct your attention to page 6, figure 2, of the report before, maybe you could reflect on it and come back where we have put in a graph that shows it is not a to us, unless you are able to give us responses now. direct measure of rent arrears as a percentage of We had been thinking of saying that people should not income, but basically it shows a change in score for be charged a bedroom tax if no reasonable offer could the difference between the percentage arrears figures be made to them. If you are in a very rural area and at March 2013 and June 2013 for the RSLs for whom there are no smaller houses available within what is we have information available to make that considered to be a reasonable area, in those comparison. I have graphed that change score. circumstances it is clearly not your fault and you are Essentially, the graph shows quite a small margin of not hanging on to a bigger house; there is simply no change, either positive or negative, so there is not a alternative. Does that seem to you to be a reasonable huge amount of variation in the extent to which recommendation for us to be making, or are there any arrears would decline or increase over that three- factors of which we are unaware that would make it month period. In answer to your question, my feeling less than sensible? is that there is not a huge amount of variation. Michael Cameron: Given that local authority and RSL allocation policies are driven very much by the Q883 Graeme Morrice: It is generally uniform. availability and size of the particular stock which Comparing housing associations with local becomes available at any one time, it will always be authorities, did you see much of a variance between the case that there are challenges in finding at any the group of housing associations you surveyed and volume suitable accommodation for people who are the 20 local authorities? looking to downsize, or indeed the reverse in terms of Kirstie Corbett: For the local authority data, to some upsizing. Local authorities and RSLs in Scotland are extent we were not in the same position to look at that becoming increasingly sophisticated in maximising March to June difference. the efficient use of their stock and incentivising Graeme Morrice: The baseline. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:44] Job: 035419 Unit: PG07 Source: /MILES/PKU/INPUT/035419/035419_o007_michelle_131030 - CORRECTED Final.xml
Ev 128 Scottish Affairs Committee: Evidence
30 October 2013 Michael Cameron and Kirstie Corbett
Kirstie Corbett: For local authorities we were able to take it that you would count local authorities that look at differences in the survey data they provided to transferred their stock as being a housing association. us for June 2013 and the previous two years. We were I am thinking in particular of Glasgow where there is able to look at a pattern of change over that time only substantial housing. Glasgow Housing Association is for the figures that they supplied to us for June. They the biggest registered social landlord in Europe, so were not audited figures. It is quite important to point did you count stock transfer organisations as part of out that these were figures we asked organisations to housing associations? provide to us on a very quick turn-around basis. They Michael Cameron: Yes. were not part of their audited accounts, so there is some margin for error. Q889 Graeme Morrice: In terms of some of the specific data that you were able to collect from your Q884 Chair: But there is no reason to believe that survey, did you manage to glean information about the errors would not be randomly distributed up or some of the highest rent arrears figures out there, and down. can you give particular examples? Kirstie Corbett: There is no reason not to believe that. Michael Cameron: By particular landlord? I agree. For local authorities, we could look at the Graeme Morrice: Just some of the high figures. differences between arrears levels for June in each of Michael Cameron: The range of figures that we were the three years 2011, 2012 and 2013. My looking at? understanding, if I cast my mind back to the huge Graeme Morrice: Yes. What are we talking about in amount of data we had, is that there is not a massive terms of the hard currency, if you like? amount of variation, and what variation there is may Michael Cameron: I do not have the range to hand. well have been there anyway in previous years. That There were certainly some that looked very high and is not something I looked at in a huge amount of which we discounted from the analysis, because we detail. suspected that for those outliers there was an issue with the data being returned to us. We do have Q885 Graeme Morrice: Variation between housing information, which we can provide to the Committee, associations and local authorities, or variation within on the range of arrears in terms of both this survey the local authority family? and our normal annual data collection, if you are Kirstie Corbett: Variation within local authorities. interested in understanding that.
Q886 Graeme Morrice: Looking overall at all the Q890 Chair: I think it would be helpful if you gave housing bodies that you surveyed, did you find any us not only that but also what lessons you draw from geographical variances? I know we touched on the it, because we might not have the knowledge or rurality issue earlier. Obviously, most of the background to be able to identify the sort of things population of Scotland is based in the central belt. that would leap out to you. Did you find any differences there, or did you find Graeme Morrice: I think that would be very useful. differences between the central belt and the rural Michael Cameron: We will do that. Scottish borders, the highlands and islands and the north-east of Scotland? Q891 Mike Crockart: I have some technical Kirstie Corbett: We were not really able to undertake questions about some of the statistics. We have talked that level of analysis. As you will see from the report, already a little about the 35% you saw where there we have published at a high level of analysis—at an was a percentage rental income decrease. Can you say all-Scotland level, or at an all-Scotland level for local a little more about that? You seemed to say that it was authorities versus RSLs. A geographical split a kind of seasonal trend because it was March to June. underneath that would have been difficult for us to do When you do your next set of three, would you expect because of the way housing tenancies are split across to see a similar seasonal variation in those statistics, different RSLs in particular, obviously not local or would you see a rise across more of the stock? authorities. It would be difficult for us to attribute Michael Cameron: If the seasonal variation is tenancies and the split of their income across lots of repeated this year, in terms of our understanding of different areas. what that is in a normal year, we would expect to see arrears climb over the summer months, so when we Q887 Chair: That is assuming that a number of next run this survey there is a strong potential that we RSLs have got packages of housing. Of the ones that will see an upward turn in arrears levels. As we have come to mind at the moment, most would tend to be done for this iteration of the survey, we will attempt geographically concentrated: the Hebrides; Orkney; to gather the same data for the same period in each of Shetland; the borders; and the ones in Glasgow. the last two years, so that we can identify whether Surely, as a proportion, there are not all that many that within that seasonal variation something else is are taking in urban and rural. happening to arrears levels. Michael Cameron: There are enough of them that have stock distributed across a number of local Q892 Mike Crockart: Do you have that level of authority areas that would make it very difficult at this granularity, of three-monthly checkpoints, for the level of analysis to produce that type of outcome. previous two years? Michael Cameron: Not at this point in time. We Q888 Graeme Morrice: In terms of the difference collect data on an annual basis from landlords, and for between housing associations and local authorities, I arrears information that would be as at 31 March. We cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:44] Job: 035419 Unit: PG07 Source: /MILES/PKU/INPUT/035419/035419_o007_michelle_131030 - CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 129
30 October 2013 Michael Cameron and Kirstie Corbett hold that information historically for each landlord Q899 Mike Crockart: Those are 130 RSLs, but registered with us. In this survey we asked landlords presumably there is a large variation in their size. to give us the figures for the previous two years for Kirstie Corbett: Yes. arrears as at 30 June. When we repeat the survey, as we will in the coming weeks, we will look to them to Q900 Mike Crockart: What would be the smallest give us the same information over the three years as and largest? at 30 September. Michael Cameron: The smallest and largest RSL by size? Q893 Mike Crockart: It is difficult to draw too Mike Crockart: Yes. much from this April to June snapshot, if you like, Michael Cameron: The largest is Glasgow Housing because we do not have the trend data as yet to Association, as was referred to earlier, with just over compare it with previous years. 40,000 houses. As to the smallest association in this Michael Cameron: Yes. We would certainly add some sample, I am looking to Kirstie. We excluded some of degree of caution in drawing firm conclusions from the very smallest. We register and regulate Abbeyfield that first iteration of the survey. As Kirstie said, we societies, but because of their unique nature we have will probably look to build our understanding and the not included them in this survey. You are looking at available data over the coming year. anything from 100 to 40,000-odd houses. Kirstie Corbett: It is probably worth while pointing Q894 Chair: But it would not be wildly unreasonable out that there is not a direct measure of arrears as to take the second quarter’s seasonally adjusted income on the graph; it is arrears as a percentage of figures and draw something from that. There comes a their rental income for that reporting year, which is point where you say you cannot draw any conclusions how arrears would normally be reported, discussed until we are all dead—the statistical run is so long— and conceived by landlords themselves, so a but, if there is an appreciable variance beyond the weighting would not necessarily be required for that. seasonal one, I would have thought that is reasonable Mike Crockart: Although there is not a weighting, as a conclusion, is it not? there is an equalisation. Michael Cameron: It will undoubtedly be the case that we are likely to see some kind of pattern emerge, Q901 Chair: Can we be clear about that? The arrears but our statistical colleagues would consider it remiss are there as a percentage of their income for the year. of us if we did not point out that you need more than Kirstie Corbett: Yes. two data points for a pattern. Q902 Chair: So, as a percentage of their income for Q895 Chair: That is a bit like local authority lawyers the quarter, these figures should all be quadrupled. and how they try and do things—but neither of you is Kirstie Corbett: No. a local authority lawyer. We know that fine well. Chair: I only did O-grade big sums. Michael Cameron: No. Michael Cameron: If you did that sum, that is what Chair: Notwithstanding those caveats, we can would happen, but it would not enable you to look at probably get some— like for like, and it would not be the normal way in which arrears are monitored and reported. You look at Q896 Mike Crockart: With respect, Chair—which your arrears level as a percentage of your total annual means I am going to disagree with you completely— expected income from rent. That is the standard you used the term “seasonally adjusted”, but, as the measure which is always used. holder of an SYS in statistics, is not the problem here that we do not know what the seasonal adjustment is, Q903 Chair: I understand, but these are not standard because we have not had multiple seasons to look at, times, as it were. If instead of doing reporting years to see what the trends are? you were doing reporting quarters, you would not be Michael Cameron: Yes. We have what I suspect is taking the arrears that had built up as a quarter of the nothing other than the commonly held understanding annual figure; you would be taking them per quarter. of what the seasonal variations are likely to be, but Therefore, quadrupling them is the least unreasonable we do not have in our possession hard data on that. assumption that you can make. Landlords themselves are likely to hold that Michael Cameron: It has some statistical anomalies information and data, and in part that is where our in it if you start to do that, because a landlord’s understanding of that seasonal variation comes from. measurement of arrears includes accrued arrears, not just arrears that arise within that particular quarter. Q897 Mike Crockart: I want to ask a couple of You could do different cuts of the analysis to look at questions about figure 2. I guess that we have 130 just the arrears that arose within a particular quarter RSLs on the graph with the variation up or down, and over the rental due for that particular quarter and it by and large it is from plus two to minus two. It takes would perhaps start to tell slightly different stories, in the vast majority, apart from the outliers, where it but we are attempting to stick with the same consistent looks as though it peaks at about 4.7 or 4.8. measure that will allow us to track change over time. Kirstie Corbett: Yes. Q904 Chair: I very much prefer my measure to Q898 Mike Crockart: Is there any sort of weighting yours on the basis of telling us what is actually to these? happening. It is crude, and I accept that. I had only an Kirstie Corbett: No. O-grade in big sums and didn’t stick with big sums in cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:44] Job: 035419 Unit: PG07 Source: /MILES/PKU/INPUT/035419/035419_o007_michelle_131030 - CORRECTED Final.xml
Ev 130 Scottish Affairs Committee: Evidence
30 October 2013 Michael Cameron and Kirstie Corbett the sixth year. I will defer to you on that, but it would Michael Cameron: I think you would be getting into help explain why it looks as if the figures are much a place where it might be quite difficult to sustain the lower than we had anticipated. Obviously, if you statistical argument if you did that. The critical issue multiply them by four, it is a bigger figure. for us is to understand the risk to a landlord’s income Michael Cameron: That said, if you were doing that, stream. That comes from the global amount of rent you would look to do the same for all previously outstanding. We want to understand how that might recorded arrears. All the figures would uplift in the change as a consequence of welfare reform, and same fashion, so actually the change you are looking whether the risk is increasing or decreasing. It would at might very well be the same. Our interest in this not necessarily be in our immediate regulatory interest regard is very much to understand the risks to the to do that type of analysis. income streams of social landlords, so we are looking at that larger measure because it is more helpful to us Q910 Chair: What does that mean—that it wouldn’t in that regard. be in your regulatory interest to do that sort of analysis? Surely, there is never an argument for not Q905 Chair: Of the arrears noted there, how much having more information. of them are carried-forward arrears, as distinct from Michael Cameron: We are a risk-based and arrears that have arisen in that quarter? proportionate regulator, so we seek from landlords Michael Cameron: Those figures include the arrears only that information which is necessary for us to be for all outstanding rent owed by tenants, so if a tenant an effective regulator; we try to minimise the burden has built up arrears over a period of time that is on those landlords. We would not gather any included within the measure. information that we were not putting to direct use within our regulatory activity. Q906 Chair: I understand that point. What I do not understand is whether it is likely to be 90% of the Q911 Chair: But surely the major risk factor that has arrears figure or 5% of the arrears figure. If you have exploded on the scene is the bedroom tax. I would a carried-forward arrears figure, you are not getting have thought you would want to do special work to the total of the accumulated arrears within that period identify how much of the cumulative arrears are that can perhaps be identified as being related to the identifiable as being due to the bedroom tax. As I bedroom tax. understand it, at the moment you do not know how Michael Cameron: That is why we specifically asked much has been carried forward and you also do not landlords what proportion of their arrears they thought know how much of the carried-forward arrears have was a direct consequence of the changes brought been paid off subsequently. Some of it might simply about by welfare reform. Most landlords said that be a question of when bills are due and paid, and so between zero and 10% of the arrears they were on. I remember from my days in a local authority that reporting were as a consequence of welfare reform. that can completely distort the figures. If there was a substantial amount of arrears due to timing issues, the Q907 Mike Crockart: If, by that figure, the majority remainder could have increased by quite a substantial of the arrears are probably accrued arrears and you amount in percentage terms as a result of the bedroom were to multiply it to get a yearly figure, effectively tax. But you are unable to tell us any of that. you would be double-counting, triple-counting or in Michael Cameron: The main reason we are unable to some cases quadruple-counting the figure, because tell you that is that we do not collect data to enable potentially it would come from six months or a year us to do that type of analysis. It is not necessary for before. us to do that type of analysis for us to be able to Michael Cameron: I think I would need to have that regulate the bodies we are charged with regulating. drawn out for me to try to answer that. Q912 Jim McGovern: We have already touched on Q908 Chair: Did you not do the SYS? the subject of discretionary housing payments. Your Michael Cameron: I even went a bit further than that report would seem to indicate that you did not analyse and did statistics for the first year in university, but I the influence of DHPs. Could you tell us why? am afraid it has not prepared me to answer that Michael Cameron: Principally, we wanted to get an particular question. understanding for our own regulatory purposes as to what some of the potential impacts on landlords’ Q909 Mike Crockart: Let me help you. I think what arrears levels may be, but also to help the broader the Chair is trying to get at is the yearly figure. You policy debate as far as we could. Housing benefit and could do that if this figure just related to arrears for its administration is not a matter within our remit or the three months; it would involve a certain number locus, and it is not something we have an immediate of assumptions that arrears would continue at that rate need to understand in terms of our engagements with throughout the entire year, and you would have to landlords as a regulator. I suspect there is a range of back that up with a lot of guesswork, but you could other activities going on elsewhere—Kirstie might crudely multiply it by four to get your arrears for the want to comment on this—where others are looking year. But if part of those arrears comes from three at some of the impacts of DHP on arrears levels as a months, six months or a year before and you are consequence of welfare reform change. It is not that multiplying that figure by four, you are double- that analysis is not happening; it is probably just the counting or triple-counting, or worse. case that it is not happening within the regulator. cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:44] Job: 035419 Unit: PG07 Source: /MILES/PKU/INPUT/035419/035419_o007_michelle_131030 - CORRECTED Final.xml
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30 October 2013 Michael Cameron and Kirstie Corbett
Q913 Jim McGovern: But you accept that DHPs and the extent to which it is offset—or not, as the case influence the whole debate; it is a factor. may be—by DHPs. Michael Cameron: Almost certainly, yes. Michael Cameron: It is certainly one of the major risks we are looking at and considering. We carry out Q914 Jim McGovern: Maybe Kirstie would answer an annual risk assessment of every landlord we this. Who do you think is best placed to analyse that regulate, looking across a range of risks, not just to sort of information and stats? their financial health but also to their governance and Kirstie Corbett: I would not like to say who I thought the quality of service delivery that they provide for was best placed to do that. However, we are aware their tenants and others. That certainly includes a very through our links with other sector bodies and direct look at those who may have the most exposure stakeholders in Scotland that there are other pieces of to the risks that come from welfare reform. It is very research under way on all the factors that influence much in our interest to look at that, but we do so at this particular issue, DHP being one of them. an individual landlord level; we do not look at it at a system level in that way. First and foremost, we would Q915 Jim McGovern: Are you able to say who is look to the landlord to give us as the regulator analysing the influence of DHPs? appropriate assurances that they understand the risks, Kirstie Corbett: I do not know specifically who is that they are planning to handle the risks that may be analysing the influence of DHPs. coming their way, and what mitigating action they are taking, if that is necessary. Q916 Jim McGovern: And you do not have an opinion on who should be. Q919 Chair: I take it that it is too early for anybody Kirstie Corbett: No. to have come to you to say, “It looks as if we will be in financial difficulty as a result of arrears building up Q917 Chair: Presumably, you are meant to be flowing from the bedroom tax.” assessing the risk of the potential bankruptcy of RSLs Michael Cameron: Nobody has done so, and our and so on. One of the biggest issues coming up is analysis, in the three months that have passed since welfare reform and the bedroom tax, and one of the the changes, would not necessarily throw up anyone main mitigating factors is DHP. Therefore, I find it whose situation has so radically shifted that we would surprising that you are not looking in some way at need to have a much higher level of regulatory DHPs and their impact. At the moment, the Scottish engagement with them. We look constantly at the risks Government have provided £20 million and have out there for landlords. We put in place for RSLs a agreed to provide £20 million for the year after. I regulation plan for any landlord that we consider would have thought you would want to clarify needs a medium or high level of engagement from us. whether or not that still leaves an overhang of likely At the moment, we have regulation plans with about debt and how that could be addressed; whether or not a third of all landlords. We monitor that throughout it would deal with all the potential debt; and also what the year and make changes to those numbers if we would happen, say, two years down the road when the need to as risks emerge or concerns come through. guarantees of £20 million this year and £20 million There is a possibility that, as the impacts of welfare next year have expired. There is no point in seeing reform bed in and become more obvious, the number RSLs through this year and next year if they then fall of landlords we are engaging with could change, as off the edge of the cliff. Who else would have a that plays in with some of the other risks we are responsibility to observe and manage that risk, if not paying close attention to as things stand. yourselves? Michael Cameron: We are aware that the Scottish Q920 Chair: What other risks are coming up now, as Government are undertaking the development of a distinct from those that are normally there? This is monitoring framework in relation to welfare reform the biggest change I can identify that might affect the and its impact at a broader level, and within that I income of RSLs, but maybe there are other things of imagine they will have a very close eye to evaluating which we are unaware. the impact of DHP. That said, we are not party to that. Michael Cameron: There are a number of risks, some We are connected, in that we are able to provide them of which are not necessarily novel but have become with certain information and data, as far as we hold more acute over time. It is certainly the case that information and data, but there is work in landlords are seeing risks from changes in the cost of development by the Scottish Government around that borrowing. There is a very significant heightening of monitoring framework, and I would imagine—but it the risk around landlords’ requirement to meet is only imagining at the moment—that DHP and its pension liabilities, and that is one to which we are impact will be very high in their interest. paying particular attention at the moment. There are other potential risks of increased costs to landlords. Q918 Chair: Maybe I misunderstood. I thought you For example, some of the requirements for landlords indicated earlier that, as the regulator interested in the to improve stock to be able to meet necessary climate welfare of tenants, the question of potential change targets are another potential factor that bankruptcy was one of the main issues you were landlords have to consider when they are looking at looking at. That was why I thought you would be their business plans and cash flows going forward. following this up. Unless there are other things on the horizon, the main issue threatening the financial Q921 Chair: Am I right in thinking that pensions and viability of RSLs would seem to be the bedroom tax borrowing rates are likely to affect pretty well all cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:44] Job: 035419 Unit: PG07 Source: /MILES/PKU/INPUT/035419/035419_o007_michelle_131030 - CORRECTED Final.xml
Ev 132 Scottish Affairs Committee: Evidence
30 October 2013 Michael Cameron and Kirstie Corbett equally? There will obviously be slight differences in Michael Cameron: We certainly monitor lending the profile, but they will affect everybody across the rates and changes in lending rates and look for board. landlords to do likewise. If we have a particular Michael Cameron: As an issue it affects pretty much concern about a landlord’s ongoing viability, we every landlord, but the scale of the impact on would scrutinise their cash flows, their projections and individual landlords can vary. It will very much the assumptions that they are building into those. depend on a number of things: how long they have On the pensions position, my understanding is that the been in some of the schemes, and how many staff pension scheme most Scottish landlords are involved members they have in the particular scheme. There is in is a distinctly Scottish one, so we do not know a range of factors that can influence just how whether there would be a significant change as a significant the impact is. consequence of any constitutional changes.
Q922 Chair: Presumably, as a responsible regulator Q926 Chair: Is it a fully funded scheme? you are presently modelling the additional borrowing Michael Cameron: It is not fully funded at the costs and pension costs that might flow from moment. The most recent triennial review undertaken separation. by the scheme identified that it was, I think—off the Michael Cameron: We are very mindful of the top of my head—about 56% funded. potential impact as a consequence of any change at Chair: Gosh! I had not quite appreciated that this constitutional level in Scotland, but, first and would read across to yourselves. Certainly, when we foremost, we would look to the individual landlords have had discussions with private pension people they to do that type of scenario modelling, testing their have indicated that this is a concern to them. Maybe business plans for different changes in the we ought not to pursue that any further. assumptions they are making within them. We are not necessarily doing that modelling ourselves, but we are Q927 Mike Crockart: I turn to under-occupancy and looking to those we regulate to do that. the housing stock. You have already said that you only have data on RSLs rather than local authorities for the Q923 Chair: You must be doing some sort of make-up of the housing stock. Is that right? modelling to check their modelling—to mark their Kirstie Corbett: Yes. sums as it were. Michael Cameron: We will look to get a level of Q928 Mike Crockart: What do you have on the assurance around how they are managing their breakdown of supply of one, two and three-bedroom financial health and business plans. properties in Scotland? Michael Cameron: We have figures broken down by Q924 Chair: So we would be able to check with apartment size for the 270,000 houses in the every RSL the assumptions that they are making about ownership of RSLs. I can give you those figures now borrowing rates after separation, and similarly what or we could provide the Committee with them in the impact is likely to be upon their pension liabilities writing, if that would be more useful. after separation. Mike Crockart: It would probably be more useful to Michael Cameron: You would certainly be able to get them in writing. ask them and they would be able to tell you what position they have taken in terms of their scenario Q929 Chair: And that would be RSL by RSL. testing. I am less clear about whether all have done it Michael Cameron: We have it by RSL. We can give with such an explicit eye to the potential outcome of it to you at a national aggregate level, or it can be the referendum, but looking at all potential provided at landlord level. movements in interest rates and other cost factors Chair: It would be helpful to have it at landlord level. would be a very important activity. Q930 Mike Crockart: I am not going to ask for the Q925 Chair: This has led us in a slightly different details now because it is just part one of an equation, direction, but it is worth pursuing. All the evidence if you like. The other side is: do you have similar data we have had is pretty clear that a separate Scotland, for demand for those different sizes of properties? particularly if it is not supervised by the Bank of Michael Cameron: No. The information we hold on England and not part of the sterling zone, which is housing lists is simply the aggregate levels of people unlikely, and so on, is likely to suffer from quite who are on housing lists, not broken down by the type considerably enhanced borrowing costs. Surely, given of accommodation they are seeking. that this is a decision taken in September, and the impacts are perhaps two years after, when there might Q931 Mike Crockart: My equation is not going to be a transitional period, there could be a substantial work if we have only one side of it, because the financial shock to all the RSLs pretty quickly. The question is what data you have about the matching pension question would take a little longer to feed between demand and supply. You do not have any through, but a drastic increase in borrowing rates evidence that would indicate a greater demand than would have a substantial impact on almost all of them supply of particular sizes of properties, for example. almost immediately. Surely it is something you ought Michael Cameron: We might want to refer you to a to be monitoring to make sure they are modelling it report produced by Audit Scotland back in July; I adequately, because not all of them will necessarily think it was called Housing in Scotland. It undertook have the staff resource to do that. an analysis of demand versus available stock and cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:44] Job: 035419 Unit: PG07 Source: /MILES/PKU/INPUT/035419/035419_o007_michelle_131030 - CORRECTED Final.xml
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30 October 2013 Michael Cameron and Kirstie Corbett projected that forward. There is a useful analysis perhaps the methodology they have used is to assume contained within that report that you may wish to that across all housing stock. refer to. Kirstie Corbett: They imputed figures for the local authorities who did not respond to their survey, and Q932 Mike Crockart: That is for the whole stock. we have not done that with ours. They have imputed The next question would have been whether, for those 100% coverage, essentially, from their survey tenants affected by the spare room subsidy, you had responses. We have not done that with ours, so I am data about a similar mismatch between demand and not really in a position to comment in relation to the supply. Presumably, you do not. issue of stock. Michael Cameron: No. Q938 Mike Crockart: The 59,000 is the total for Q933 Mike Crockart: That rather begs the question local authorities and RSLs, so the RSL figure of of how you come up with the figure of 13% overall under-occupying tenants of 26,525 is just your being affected by spare room subsidy. What is that respondents. based on? Michael Cameron: Yes. Michael Cameron: That is based on landlords telling Kirstie Corbett: Yes. us that is the level at which they understand their tenants are affected by removal of the spare bedroom Q939 Mike Crockart: There has been no pro rata subsidy. upgrading of that, based on the 140,000 you have not had a response from. Q934 Mike Crockart: I will give up on that line of Michael Cameron: That is correct. questioning. You estimate in table 5 that there are 59,818 tenants affected by under-occupancy. That Mike Crockart: If the 140,000 you have not had a differs quite substantially from the estimate COSLA response from were at a similar level to the 11% that came up with, which was 82,500. Do you have any you seem to have for RSLs, potentially that would idea where that difference has come from? give an extra 15,000 to 16,000. Kirstie Corbett: We think that the difference in Chair: But it would be the same percentage, estimates from the COSLA research is around wouldn’t it? methodological issues. The COSLA and Scottish Government combined research looked at estimates Q940 Mike Crockart: Yes. It would be 11%, which based on working age housing benefit recipients. They would close the gap quite substantially. access that information through local authorities, Kirstie Corbett: Yes. looking at housing stock for housing associations within local authority areas, obviously driven by Q941 Mike Crockart: On the difference in under- COSLA. On the other hand, we asked landlord occupancy being reported between local authority and organisations to give us their current tenant numbers registered social landlords, the overall average is 13%, at a given point in time, which was the end of June of but the RSLs are 11% and local authorities 14%. Is this year, and give us the number of tenants who were that just down to different housing stock, housing for under-occupying in relation to the removal of spare life and local authorities historically building larger room subsidy policy, so there is a slightly different houses, or are there any other factors? base. We think that one reason for the difference could Kirstie Corbett: It would be our supposition that to be methodological, and the other could be that we do some extent that is the case, and it is around housing not have 100% coverage of landlords in Scotland in stock differences, but the information we had from the our survey responses. If we look at the number of survey does not give us any additional evidence to tenants we estimate are covered by the respondents to substantiate that. There are noted evidence gaps more our survey, there is a shortfall of around 145,000 tenants, so it may well be that that accounts for some generally in trying to tease out some of that as well. of the discrepancy between the two figures as well. Q942 Jim McGovern: In your survey question about Q935 Mike Crockart: That 145,000 would have to the biggest challenges to landlords, local authority be remarkably worse affected by under-occupancy to landlords and housing association landlords gave a bring your overall average up to 80,000-odd. notably different response to the question on housing Kirstie Corbett: Not necessarily. stock availability. Kirstie Corbett: Yes. Q936 Chair: Is there any reason to believe that those who did not return the forms were disproportionately Q943 Jim McGovern: How would you explain that likely to be affected? difference in response? Kirstie Corbett: That is not our understanding. When Kirstie Corbett: It goes back to the understanding that we looked at those who did not respond, there did not perhaps it is a historical issue around the types of seem to be any obvious patterns. stock that local authorities have, as against housing associations—the sort of issues that Michael has Q937 Mike Crockart: Is part of this what you said outlined already. Therefore, it brings a bigger earlier about local authorities having built larger challenge for local authorities, given the type of stock houses, and housing people for life? Therefore, their they have. It may well be the case that they feel more understanding of the problem is that much greater, and at risk of under-occupancy for their tenants. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:44] Job: 035419 Unit: PG07 Source: /MILES/PKU/INPUT/035419/035419_o007_michelle_131030 - CORRECTED Final.xml
Ev 134 Scottish Affairs Committee: Evidence
30 October 2013 Michael Cameron and Kirstie Corbett
Q944 Jim McGovern: Because of their housing need to do and the engagement we will have with policy and the size of house they have built over the them, primarily to get assurance that they are on top years. of the issues, but, if necessary, the actions that we Michael Cameron: That is one piece of evidence would expect them to take. which lends some support to the supposition that Kirstie laid out earlier—that local authorities, for Q948 Jim McGovern: You have probably answered whatever reason, have stock distribution that sees the last point I was going to make. You issue regular them with a larger proportion of bigger houses and, advice, and you intend to continue to do so in future. therefore, potentially more exposure to the impact of Michael Cameron: We issue advice. Our regulatory removal of the spare bedroom subsidy; but that advisory notes are not necessarily that common in remains supposition. I should clarify that, when we terms of when they come out. We reserve them for talked about the general policy for landlords to seek when we think there are issues of real significance that to give tenants homes for life, we would see that as we need to draw to landlords’ attention, or in this case being relevant across both local authorities and RSLs; it is about ensuring that landlords keep these kinds of it is not exclusive to local authorities. issue to the fore in their thinking when looking at their business plans and strategies. Aside from that, for Q945 Chair: But would it be disproportionately local those landlords we have engagement with, we put in authorities or RSLs, or would it just be even? place a regulation plan which sets out some Michael Cameron: I do not have information to say expectations as to what we require from those that categorically, but I suspect it is not landlords in terms of either additional assurance or disproportionate; I think it would be more or less the actions. same position across both. Q949 Chair: Can I clarify something about the Q946 Jim McGovern: One of the most unpopular regulation plans? A number of them will be concerned actions by landlords, notably local authority landlords, with governance issues and a variety of things that are is their revision of budgets and financial projections. ongoing and could occur at any time, but presumably Does it concern you that while arrears are growing some of them are to do with financial viability. I want some landlords are not assessing what this might to come back to what action you are taking to mean for their budgets? ascertain the degree of risk for different landlords as Michael Cameron: We have on a significant number a result of arrears piling up because of the bedroom of occasions, and over a period of time, made it clear tax. The Government suggested that tenants faced that as regulator we expect landlords to be considering with this tax should take in lodgers, work additional the potential impacts of welfare reform, among a hours, downsize or use their savings. In order to assess range of other risks, which we touched on earlier, and the degree of risk, presumably you are monitoring the that they consider what mitigating actions they can extent to which tenants are taking up these options take and what it might mean for their longer-term and possibilities. Do you have anything that has been viability; and that, if they have any significant fed back to you by housing associations? concerns about that longer-term viability, they give Michael Cameron: We don’t at that level of detail. consideration to their future strategy and business We would not expect landlords to provide us with that plans in that regard. That is something we will level of detail, nor would we seek to do any analysis continue to do. Within the next week or so, we will at that level of detail, because we are principally be issuing what we refer to as a regulatory advice interested in the impact on the landlord and how the note, which will flag the significant risks that are landlord is managing those risks and that potential emerging for social landlords and the types of actions impact. We might look to be assured that the landlord we would be expecting them to take in response to is monitoring those types of developments and the emergence of those risks. understands how that may or may not impact on his income stream. Q947 Jim McGovern: Do you make a regular assessment of the actions that have been taken by Q950 Chair: But in terms of good practice, if you landlords? identified that some landlords had managed to Michael Cameron: We undertake an annual risk overcome the difficulties caused by the bedroom tax assessment, where we look across a range of measures by letting tenants take in lodgers, for example, that and indicators, some qualitative and some could be considered as an example of good practice quantitative, and a lot of financial data for RSLs. We that you might want to see replicated and passed on look to identify those landlords who may be most to others. That is why I would have thought a degree exposed to risk, or where trends indicate that there of monitoring of the responses and assessment of the may be something going in the wrong direction. For responses of individual RSLs would be quite the landlords we assess as having exposure to risk, or appropriate for you to be undertaking. performance issues, we put in place a regulation plan Michael Cameron: In terms of good practice, we have for RSLs, or we contribute to the assurance and a role. Earlier this year we issued a special newsletter improvement plans in place for each local authority, on welfare reform that set out a range of things that managed through the shared risk assessment process we proposed landlords should consider when putting that we have with other regulators and inspectorates in place the necessary mitigating actions to deal with in Scotland with an interest in local authorities. That the impact. We included a reference to a number of will set out our expectations of what those landlords organisations that had already been doing things. We cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:44] Job: 035419 Unit: PG07 Source: /MILES/PKU/INPUT/035419/035419_o007_michelle_131030 - CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 135
30 October 2013 Michael Cameron and Kirstie Corbett gave space to the Chartered Institute of Housing to Q956 Mr Reid: Do you know whether similar make comment on actions and activities going on in research has been carried out in other parts of the UK landlords to prepare them for that, so it may very well and, if it has, how it compares with your own results? be that we would look to repeat something of that Michael Cameron: I am not aware of any other nature. research which is as comprehensive in its coverage as We would also look to landlord representative bodies this. I have seen various media reports of smaller and trade organisations to take on the role of pockets of landlords, perhaps through already existing dissemination of good practice among their members. benchmarking organisations, but I have not seen one Indeed, we know that is already happening. There is that gives such coverage at a national level in any of a conference tomorrow in Scotland, hosted jointly by the other parts of the UK. the Scottish Federation of Housing Associations and the chartered institute, which is doing just that; it is Q957 Mr Reid: Did those smaller surveys give any looking at the earlier lessons of what landlords have indication as to whether the results were similar to done to mitigate the impacts of these changes. There your own or whether there were differences in is quite a bit of activity around that area of good different parts of the country? practice and sharing of knowledge. Michael Cameron: Off the top of my head, trying to Chair: Yes, but we’re never quite sure about the remember the coverage of a couple of them, all I can extent to which you as the regulator are actively probably conclude from them is that they seemed to involved, or whether a lot of these things are done by be unanimous in their view that arrears were others and you then, as it were, observe. increasing. Q958 Chair: When can we expect the next chapter Q951 Mr Reid: What feedback have you had about of this ongoing exercise? the survey? Michael Cameron: We are looking to run this survey Kirstie Corbett: Generally, we have had very positive on a quarterly basis. feedback about the survey. It seems to have been welcomed by stakeholders and the sector more widely. Q959 Chair: Right, so it will be the end of The feedback in the press has been positive and September. How long does it take you to do these neutral; it has been well covered and detailed things? accurately at national and local level in Scotland. Michael Cameron: We are likely to be writing to landlords in the next couple of days to initiate the next Q952 Mr Reid: Have any conclusions that other round. It may be that we look to have a slightly groups have drawn from it been published or fed back narrower dataset recovery because in the first round to yourselves? of the survey we look to get a slightly broader picture, Michael Cameron: The short answer is yes. A particularly some of the perception information. We number of commentators or organisations have looked are likely to focus more on the data collection around at our information and drawn conclusions from it and the impact on arrears in subsequent surveys, but there expressed those conclusions. That is entirely for them is the opportunity for us to include other aspects we to do. want to get feedback on, and we are talking to a range of stakeholders about what may be viewed as useful Q953 Mr Reid: Has there been a pattern to those in that regard. conclusions? Michael Cameron: What we have seen in some of the Q960 Chair: I am conscious that possibly we are media coverage is that other organisations see this as coming up to a vote in five minutes, so, if there are further evidence of an impact of the welfare reform any answers you have prepared to questions we have changes that they had suggested already existed, and not asked, this would be your opportunity to draw to they were using our information to confirm that. our attention anything we have not already touched on. Is there anything that you want to raise with us? Michael Cameron: No, I don’t think we have. We Q954 Mr Reid: Were any views expressed that the have covered quite a lot of ground. impact was greater or lesser than perhaps had been expected? Q961 Chair: Since we have a couple of minutes, can Michael Cameron: No, I do not think there has been. I raise one thing in particular? It has been suggested to us that some housing associations might be tempted Q955 Mr Reid: What about tenants groups? Have to move down the road towards action against some you had any feedback from them? tenants, in particular the question of eviction. A Michael Cameron: Not as yet. Very shortly, we will number of them said that they did not intend to go be initiating a stakeholder survey of all 600 or 700- that way, but if they do not have that sanction there is odd registered tenant organisations in Scotland, and a danger in these circumstances that arrears rise. It has through that we will be looking to understand their been suggested that in these circumstances the views and perspectives on the impacts of welfare associations could write off those arrears. Presumably, reform. We also have a panel of about 300 unaffiliated that would have an impact on their finances, but if tenants that we use to get feedback on various issues. the arrears written off were compensated for by an It is likely that we will pursue issues around welfare equivalent transfer from the Scottish Government, that reform with that group as well. would overcome the difficulty, wouldn’t it? It would cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:44] Job: 035419 Unit: PG07 Source: /MILES/PKU/INPUT/035419/035419_o007_michelle_131030 - CORRECTED Final.xml
Ev 136 Scottish Affairs Committee: Evidence
30 October 2013 Michael Cameron and Kirstie Corbett allow arrears in those circumstances to be written off Q964 Chair: I am assuming that you are the without penalising the financial position of the RSLs. regulator and you know all these things. Michael Cameron: If that mechanism were in place, Michael Cameron: I certainly do not know the mind I imagine it would have a neutral impact. of Scottish Ministers.
Q962 Chair: A neutral impact in what sense? That Q965 Chair: We’re not talking about whether or not they would be writing them off and getting the money they would want to do it; we’re talking about whether from the Scottish Government, and they would be or not it could be done. We have to make slightly better off than they were before, because the recommendations of various sorts and it has been arrears would no longer be accumulating and suggested that that should be one. I am just trying to undermining their financial position. clarify whether, from your perspective, there is any Michael Cameron: As things operate at the moment, difficulty in it. for a landlord to write off arrears, they have in the Michael Cameron: I can see a range of difficulties in first place to be former tenant arrears. It tends to be being able to identify those arrears which are either tenants who have been evicted on the basis of exclusively a consequence of particular elements of rent arrears, or who have left their accommodation welfare reform, and I think that is likely to become with some arrears in place. The landlord would seek more challenging still with the introduction of to recover those through its former tenant arrears universal credit. I think there are some practical pursuit arrangements. Only after a period of time difficulties that would immediately become obvious in would they look to write off the bad debt in normal trying to work a position like that. That would be quite accountancy practice. If there was a different a significant change in the funding arrangements for mechanism put in place, we would need to understand RSLs. what it was and how it impacted. Q966 Chair: But there is no reason why it could not Q963 Chair: But if there is a policy that tenants be done if the will was there. should not be evicted for arrears caused by the Michael Cameron: I know of no reason why it could bedroom tax, unless something else happens, not be done, or how it could be done, if that makes presumably those arrears will simply build up. As we sense. heard from the Scottish Federation of Housing Chair: Yes, it does. On that happy note, you have Associations, and we heard from others informally, been saved by the bell, which is ringing silently. It is that would undermine the financial position of the normally meant to ring quite loudly, but it seems to association, unless those debts were written off and be ringing silently. Thank you very much for coming compensated for by the Scottish Government. There along. We have found this very helpful. I hope it has is no reason why there should not be that mechanism, not been too bad for yourselves. Let it be recorded is there? that both of you nodded to say that it was not too bad. Michael Cameron: I do not think that is for us to comment on. I am not sure what that mechanism would be and how it would operate. Our interest would be— cobber Pack: U PL: COE1 [SO] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG08 Source: /MILES/PKU/INPUT/035419/035419_o008_michelle_131106 CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 137
Wednesday 6 November 2013
Members present: Mr Alan Reid (Chair)
Mike Crockart Pamela Nash Graeme Morrice Sir Jim Paice
In the absence of the Chairman, Mr Alan Reid was called to the Chair ______
Examination of Witnesses
Witnesses: Cllr Harry McGuigan, Community Well Being Spokesman, and Michael McClements, Policy Manager, Convention of Scottish Local Authorities (COSLA), gave evidence.
Q967 Chair: Thank you very much for coming. To assist people, but discretionary housing benefits and explain, I am Alan Reid, the MP for Argyll and Bute. payments were not set up for this kind of ongoing I am the Vice-Chair of the Committee. I am chairing support arrangements. They were set up for crisis the meeting this afternoon. Ian Davidson, our Chair, situations that would arise, not as a sustainable apologises that, because of the shipyard statement a solution to something like this that has been imposed. couple of hours ago, which is obviously an important Our analysis and COSLA’s sampling of housing stock issue for his constituency, he is dealing with some of availability in Scotland shows that many tenants have the implications of it but hopes to be here later in the no option whatsoever to move. I cannot emphasise meeting. Thank you very much for coming. Maybe that enough. It is crucial to understand that we have a you can start by introducing ourselves. situation—I am sure it applies across the UK too— Cllr McGuigan: My name is Harry McGuigan. I am that is particularly acute in Scotland where we have a a councillor in North Lanarkshire up in Scotland and big rented sector. There are no options available to am the COSLA spokesperson for community well them. There are simply not enough one-bedroom being and safety. properties available, and we have checked and Michael McClements: I am Michael McClements, confirmed that. That is one big message that we want policy manager for COSLA. to bring down here. There are many ways in which the bedroom tax is Q968 Chair: Maybe we can start off by asking you unfair. It is hitting people in council-owned temporary to tell us the main findings of the initial survey of accommodation. We fail to understand why it hits that local authorities that you carried out in May. particular segment of housing while at the same time Cllr McGuigan: Perhaps I could start by embarking leased or licensed temporary accommodation, which upon why it was necessary to undertake that survey. I is more typical in England than in Scotland, is not will refer to my notes so that I do not miss anything. being hit. It would seem as if we are hitting those I say to you in the first instance that COSLA is firmly people who have no choice in the matter, and it is just opposed to the bedroom tax, which we consider to be wrong to do that. ill-conceived, unfair and unworkable. We believe that You wanted some information on the survey. COSLA it should be abolished. That is the fundamental has had feedback from 26 councils—or 78%—across statement I want to bring down to you here. Scotland. The original discretionary housing payment Chair: That is loud and clear. allocation in Scotland was £10 million for the year Cllr McGuigan: I will move on to some of the detail 2013–14. Funds have been added since, mostly for later, but perhaps you will let me go through these very rural authorities, to take the DWP allocation up points because they are very important. We believe to £13.5 million in Scotland. Councils can add a that the bedroom tax will do little to increase the maximum of 150% to that allocation. After very supply of housing in Scotland and that the UK serious consultation with local government and others, Government have not done a sufficiently effective the Scottish Government have recognised the need to impact analysis of what the consequences, intended or deal with the pain caused by the bedroom tax in otherwise, might be, particularly in Scotland. It is a Scotland. They came in with £20 million to assist. I bad concept and ill-considered. have to tell you that that was after considerable Any savings to the UK Government, as COSLA lobbying and persuasion being brought to bear there, predicted, are being passed on in increased rent arrears but we were pleased to see that happening. to councils and registered social landlords, and the The total available in Scotland as far as discretionary distress is being passed on to all of us but is housing payments are concerned is £33 million. particularly acute for the tenants who are affected by Discretionary housing payment is not, however, just this. All councillors in Scotland, and I am sure all for the bedroom tax. It should not be seen as MPs, are aware of the particular impacts. They turn something used for bedroom tax, an imposed policy, up at my surgery, and I am sure they will turn up but for housing need and hardship. That is what it was at yours. I am sure that is the case right throughout set up for, not as a sustainable means of implementing the UK. a policy that we think is quite a hideous one. Councils are doing what they can through However, prior to the recent welfare reform changes, discretionary housing benefits and other support to the Scottish allocation was about £2 million. The key cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG08 Source: /MILES/PKU/INPUT/035419/035419_o008_michelle_131106 CORRECTED Final.xml
Ev 138 Scottish Affairs Committee: Evidence
6 November 2013 Cllr Harry McGuigan and Michael McClements
findings at 30 September from 26 Scottish councils of cases. Some of these are still being processed, so it are as follows. Fifteen Scottish Councils, or 58%, may be higher than that. The total spend committed have spent or committed 50% or more of their DWP by those 26 councils at 30 September was roughly discretionary housing payment allocation. £7,431,000. The picture is changing very quickly. We now expect Q969 Chair: Was that the original DWP amount? to see an even sharper rise in the demand for DHP— Cllr McGuigan: That is 58% of the total DWP. discretionary housing payments. Councils at the moment are revisiting some of the failed applications Q970 Chair: Those are the two tranches of DWP submitted when it looked as if the money would be money. smaller than they currently have. They are also trying Cllr McGuigan: Yes. in some areas to target those people in receipt of housing benefit who will be victims of the bedroom Q971 Chair: Am I right that that would not include tax and are unable to apply, or have not applied, for the £20 million that came from the Scottish discretionary housing payment. We think there is a Government? considerable audience of people out there in that Cllr McGuigan: Yes. particular category. Various authorities across Michael McClements: It includes the money allocated Scotland are taking a set of proactive measures to try by DWP. That is the £10 million plus the additional to make sure they maximise that and ensure that the rural money allocated in July. It does not include the resources go to those people who really need them. £20 million from the Scottish Government, nor the bid Mike, do you want to deal with that detail? fund of £20 million from the DWP. Michael McClements: On the DHP. Cllr McGuigan: It is also important to understand that local authorities did make up the DWP moneys to the Q974 Chair: Yes. The information that came out of maximum. We were allowed the 1.5 multiplier, which the survey was before the £20 million was given by you will know about. Fifteen per cent. of councils in the Scottish Government. I just wondered whether you Scotland have spent or committed 100% or more of had had time to do fresh calculations to tell us the their DWP allocation. amount councils have spent as a percentage of what is now the total allocation. Q972 Mike Crockart: You made quite a wide Michael McClements: No, we have not. We found statement there that all the councils had topped up to that those 26 councils had spent almost £7.5 million the maximum. That is not our understanding and is in total as at 30 September. We know that the position not the evidence that has been given to us. The is changing quite rapidly. To give an example, evidence that we have had is that there is a wide Highland told us that a figure of about £300,000 had variety. been spent at that point. Subsequent to that, I had an Cllr McGuigan: I did not say that all councils had e-mail from Highland to say that by 21 October that done that. We are dealing with 26 councils that replied figure had more than doubled, because they are doing here. We are not saying that even all of those 26 a lot of proactive work. Remember, they will have had councils topped up to the maximum, although the some of the rural top-up as well as a proportion of the information we have is that they are certainly moving £20 million. Therefore, £7.5 million was spent. We towards that. intend to go back and try and check the position every Michael McClements: As to the position at the end few months to get clarity of where the overall spend of May, we identified 14 councils who had topped up, is, but most councils probably started the year not necessarily to the maximum. Some had topped up profiling their expenditure on the assumption of what to the maximum, and quite a few were monitoring it money was available. It has changed very rapidly, with the intention that they would top up, depending probably since the end of July. A lot of that has not on the demand for the fund. We now expect that yet fed into the spend patterns. Quite a lot of councils everybody will top up to the maximum because of the are now reviewing their practices. They are looking at money made available by the Scottish Government. previous awards, the criteria they applied and doing Mike Crockart: We are going to come back to this proactive work to target those who are identified as anyway. being hit by the bedroom tax but have not come forward for a DHP. Q973 Chair: In terms of the survey, once that extra £20 million from the Scottish Government is added Q975 Chair: You said that a figure of £7.5 million on, have you done any calculations to find out what had been spent at the end of September. Is that your that means as far as the percentage already committed estimate of what all local authorities will have spent, by local authorities is concerned? or are those just the ones in the survey? Cllr McGuigan: Just before you ask Mike whether he Michael McClements: They are 26 out of 32. has that detail, can I finish my points? Chair: Yes, of course. Q976 Chair: Twenty-six out of 32 have spent £7.5 Cllr McGuigan: I hope, Mike, that clears up that million. confusion there. Only three councils had spent less Michael McClements: Yes. than 30% of their DWP allocation, and all were rural councils. At the end of September, those 26 councils Q977 Chair: What is your estimate of what is the had received 42,247 applications and had made total amount of money available to those 26 27,826 awards. There were successful awards in 66% authorities now for the whole year? cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG08 Source: /MILES/PKU/INPUT/035419/035419_o008_michelle_131106 CORRECTED Final.xml
Scottish Affairs Committee: Evidence Ev 139
6 November 2013 Cllr Harry McGuigan and Michael McClements
Michael McClements: It is probably about—well, I Michael McClements: In recent weeks we did a would need to look at it more closely— survey of six local authorities to get clarity about the Chair: A ballpark figure. position on rent arrears. Michael McClements: It is 80% of £33 million. If anyone is good at the maths here, it is probably Q985 Chair: Can you tell us, first of all, which six about— local authorities were chosen, and whether there was any particular reason for choosing them? Q978 Chair: Is it something like £28 million or £29 Cllr McGuigan: The six local authorities chosen to million? give a good geographic and demographic spread were: Michael McClements: Yes, £28 million, say. Highland; North Lanarkshire; North Ayshire; Fife; Edinburgh; and Dundee. The number of people in Q979 Chair: It sounds as if they have three times as Highland who would be affected by the under- much to spend in the second half as they spent in the occupancy reduction of the bedroom tax was 623. Do first half of the year. Is that correct, roughly? you want me to give you these figures or do you Cllr McGuigan: We would expect to see an overspend have them? of the £33.5 million as far as bedroom tax is concerned. Q986 Chair: We are just trying to get the figures at the moment to set the scene, so please give them. Q980 Chair: I think that is illegal. Cllr McGuigan: In summary, those six councils Cllr McGuigan: But you are asking a question where identified 20,021 tenants impacted by the bedroom tax the threshold is. I am telling you where the threshold or by under-occupancy. Thirty-seven per cent, or is. We will reach a situation where we have exhausted 7,500, were in arrears on 31 March before the the resources and there will still be increasing demand bedroom tax came in. On 30 September, after the being made. introduction of bedroom tax, the arrears in those six councils had risen to 68%, 13,712 people, which is a Q981 Chair: We can go into more detailed rise of 31%. Arrears at 30 September were 41%, discussion later. At the moment, I am just trying to which translates to just over £5 million higher than in establish the figures. Am I right in saying that, in the same period last year. That is an extremely rough terms, these 26 authorities had spent £7.5 gruesome and worrying scenario that is developing. million in the first half of the financial year, but your Michael McClements: The 20,021 impacted in those estimate is that, in total, they will have £28 million six councils are just council tenants, because those available to them for the whole financial year? Is that were the only data on which they had arrears correct, roughly? information. In the survey in May we found that, Michael McClements: As a ballpark figure, yes. They altogether, there were 82,500 people in Scotland will not have known that until relatively recently. impacted by under-occupancy measures, of whom 47,500 were in councils. Q982 Chair: That is right. Some of the questions later on will go into it in more detail. At this stage we Q987 Chair: Have you noticed a difference between are just trying to establish something else. local authorities that are still landlords and those that Cllr McGuigan: To take one local authority, North are no longer landlords in how they have reacted to Lanarkshire received 1,500 applications in April; in September, there were 3,500. It has rocketed. It is the the bedroom tax? same as far as the determinations are concerned. There Michael McClements: In relation to DHPs or rent were only 715 determinations made back in April; in arrears? May there were 1,100; in June, 2,100; in July, 2,700; Chair: In general. and it has now jumped up to 3,000, so it is climbing Michael McClements: All local authorities are all the time. To be fair, we are trying to make sure basically working closely with their partners in their that we are alleviating some of the misery this is areas. Advice agencies and registered social landlords causing people who sometimes do not know where to publicise, if you like, the assistance that is available. turn and who to turn to. These people are not claiming We have not seen any real difference in the spend discretionary housing payment to ease the pain. We levels. To take the example of Glasgow, which is the are trying to make sure that we are taking that biggest local authority, I know the Committee has proactive action. heard from that authority. Their spend levels are Chair: That is fine. We are seeking clarification at this around the middle range of authorities just now. There stage. I know that Pamela wants to ask more detailed is nothing that would suggest that those authorities questions about DHPs later. that are not landlords are spending less of the resource than those that are. Q983 Pamela Nash: Cllr McGuigan, does the figure of 3,500 that you gave relate to all applications, or is Q988 Chair: Did your survey show whether there that just on bedroom tax? had been any changes in under-occupancy rates since Cllr McGuigan: That is for bedroom tax. the bedroom tax came in? Pamela Nash: That is just for bedroom tax. Michael McClements: It is difficult. We know that the figure changes and people come off and go on to Q984 Chair: I think you did a follow-up survey of housing benefit; some people’s circumstances will six local authorities. Is that correct? change. We did not specifically ask that question. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG08 Source: /MILES/PKU/INPUT/035419/035419_o008_michelle_131106 CORRECTED Final.xml
Ev 140 Scottish Affairs Committee: Evidence
6 November 2013 Cllr Harry McGuigan and Michael McClements
Q989 Chair: It seems an obvious question to ask. in finding the accommodation that people would need Why did you not ask it? That is one of the purposes to move into a situation where they were safe from of the policy, so it seems an obvious question to ask. that incursion into their finances in having to pay the Michael McClements: It has probably not changed bedroom tax and find that money. As I said earlier, that much. For example, we know that 48% of all lots of things have been happening. Some happened council tenants in Scotland are in those six authorities, prior to the bedroom tax coming in, but there is an so the figure we got was 20,021. The figure at the end intensification of it to try to make sure that we discuss of May for all council tenants was 47,500, so that does with people in that situation the best ways and means not suggest a lot of movement. Maybe there are a of alleviating them from the pain. Have we got couple of thousand in there. statistics on that? I think we do have some data, certainly from North Lanarkshire. Q990 Chair: Are you saying you think that a couple Michael McClements: Generally, councils have been of thousand have downsized? Is that what you are following up the individuals who are impacted, saying? discussing how they are going to pay their rent and Michael McClements: No. I think it is difficult to pin offering them assistance. They have offered them it down unless you look at every authority. benefit cheques and discretionary housing payments. Cllr McGuigan: That is something we would want to A lot of them have also been referring people to investigate; we would want to get a better employability services, where they want that. From understanding of it. This is moving at a pace that recollection, in North Lanarkshire, an additional 531 makes it very difficult to capture that information at people have been referred to employability services. this moment in time. It is certainly something we will The main way to avoid the penalty is either to secure be looking at, and we will make sure that information employment or move. In a lot of areas of Scotland, does get fed back to you. We are trying ensure that securing employment is not that easy for everyone. It we work with our partners in the private and social will take some time. They are heavily dependent in housing sectors—the RSLs. We are not hostile to the the meantime. idea that people should make their homes available, if As to stock availability, our inquiries have suggested it is suitable for them to do that and they have homes the general picture is that there are not nearly enough they can move into—one-bedroom homes from two- two-bedroom houses and particularly one-bedroom bedroom homes—and if they want to do that. We are houses, because about 68,000 of the people in working to try and make sure that we have an Scotland have been hit with the one-bedroom penalty. allocation policy that is sensible and that we are The majority of people would require to downsize to advertising well enough mutual exchanges so that one-bedroom accommodation, so we know that is not people can move. We will work proactively where we available. The Scottish Government statistics from think it is in the best interests of the tenants 2009–10, which I think are the last available, suggest themselves; indeed, that is something we would also that in any one year only about 21,000 one-bedroom try to do—and, indeed, have always tried to do—in properties are available in the social sector in local authorities. We will try to get that information. Scotland.
Q991 Graeme Morrice: Good afternoon, gentlemen, Q992 Graeme Morrice: We accept that. We have and good to see you again, Harry. I want to touch on had evidence in the past from other witnesses that the issue of the behaviour of those tenants who have there is a real problem in terms of the shortage of been impacted by the bedroom tax. In the report that suitable accommodation for people wishing to went to your executive group back in August you downsize. We all accept that is one of the big mentioned that four out of every five councils are problems with the bedroom tax. Nevertheless, can you receiving half or less of additional rent now due from give us some indication, even roughly, of how many tenants; three out of five councils are receiving 40% who are affected by the bedroom tax are trying to get or less of the missing revenue. You also say in your smaller accommodation? Is it most of them, half or report that most of the councils put this down entirely less than half? Do you have any kind of tangible or to the under-occupancy deduction in housing benefit. anecdotal information on that from your survey of On the basis that any tenant having to pay this local authority members? Have you seen a big rush of additional amount will not be particularly happy about people to try to get smaller housing as a result of the it, what kind of change in behaviour have you seen bedroom tax? from these tenants? Presumably, many of them will be Cllr McGuigan: One of the things that we have to beating paths to the door of housing providers in an bear in mind here is that we have local housing attempt to downsize, whether through an allocation strategies that are worked out across councils and or a mutual exchange. As we discussed earlier, those other public sector RSL agencies and so on. We have eligible would be applying for discretionary housing strategic housing investment plans and programmes. payments. Maybe people are taking in lodgers to They are developed usually with a five-year vision. avoid having to pay it. Can you give us some tangible They identify the needs within the particular locality evidence, following the survey, that you had from or area and work to address them. In a situation where your local authority members about that change of we have a bedroom tax and arrears accumulating as a behaviour, and what kind of patterns you are seeing consequence of that, that will impact on those local as a result of that? housing strategies and distort them in a way that is Cllr McGuigan: The tangible evidence is that it is an extremely unhelpful to what we are trying to achieve. extremely difficult undertaking to secure and capture Remember this: at the last count, in North Lanarkshire cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG08 Source: /MILES/PKU/INPUT/035419/035419_o008_michelle_131106 CORRECTED Final.xml
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6 November 2013 Cllr Harry McGuigan and Michael McClements there were about 12,000 people on its waiting list situations. It is not something that is supported by all aspiring to move from a two-roomed apartment to a of the people on the waiting list because it increases three-roomed apartment, or one-roomed apartment competition for other houses. into a two-roomed apartment, but the availability of On the whole business of allocation, many people in those properties is very small. That has to be factored Scotland think that when they are allocated a house it into the whole consideration of trying to find is a house for life. It meets their needs at a particular accommodation for those people affected by the moment in time. Maybe 20 years later it does not; the bedroom tax. If all of them were to move out children have gone and so on. They do not expect a tomorrow, it would still not solve the problem of chap at the door telling them they now have to pay housing. Even if we received the funds needed to 14% or 25% more out of the very small incomes that build all these new one-bedroom houses, and it was a most of these families have. It is a very hurtful shock sensible thing to do in terms of the housing strategy— to them if they have to move out of a home that has even if we received all of the money to do that—it emotional and social attachments. It is as if the would take between three and 10 years to achieve it. contract with their local authority, the UK Surely, Governments have a responsibility to Government and Scottish Government has been understand the consequences of the legislation they broken and they have been cheated in some way. They put through, and that certain things have to be put in did not know that an extra bedroom was being place before you aim at an aspired target. This subsidised. The term “subsidy” did not come in certainly has not happened here. It may have anywhere. happened in some areas of England; I do not know, but it certainly has not happened in Scotland where There are parallels in other countries in Europe. we have a shortage of the very type of house that Certainly, the German situation is one where need is many people, who are affected by the bedroom tax, always the priority. When a social house is allocated, are looking for. We cannot build those houses; we they know perfectly well that, if the composition of cannot somehow conjure them up out of nothing. That the household changes, they will be required to move. is a big, big issue. I hope that helps, Graeme. That is part of the contract that has been established in Germany. I know it to be the case there. People in Q993 Graeme Morrice: As always, Harry, it that country would not feel it was a terrible thing to certainly helps. What is factored into local authority happen, but when the contract is one like this, which strategic housing plans will be primarily family and is very different, it will receive a very different special needs housing; there won’t particularly be a reception from tenants. lot of one-bedroom properties, I would assume. It is not like the good old days when these were provided Q994 Graeme Morrice: To follow on what you just just for pensioners. said, which is developing a very interesting theme, if Can I touch on the issue of allocations? You we look at social housing policy in Scotland, mentioned that, apart from those in bigger properties underpinned by statute and legislation through the being hit by the bedroom tax and wanting to Scottish Parliament, it is based primarily on housing downsize, there are tens, if not hundreds, of thousands need. You mentioned that earlier. It is not based on of other people on local authority and other housing your financial situation but on your housing need, and association waiting lists. We have talked about I think that is right. How do we square the circle in changing the pattern of behaviour among tenants, but terms of local authorities adjusting the housing we are going to see that with the housing providers allocation policy to try to prioritise those impacted by because of the changed circumstances. Are we seeing the bedroom tax who are looking to downsize, local authorities re-prioritising their housing because that is not about housing need but the allocation policies to give greater weight to those who financial situation? I do not disagree that local are impacted by the bedroom tax and trying to get authorities should be helping out there of course, but smaller properties, compared with those already on how does that equate to the current legislative the list who are not impacted by it? I know it is a framework in Scotland with regard to social housing difficult one for everybody, but are we seeing any kind policy, which has to be based on allocation to those of re-prioritisation in housing allocation rules? in housing need? Cllr McGuigan: I think we are. There are some wise Michael McClements: A number of authorities have and unwise authorities. I will not name the local authorities, but there is one in particular which offers looked at their allocation policies, but they have been financial incentives to people to move out of their developed quite often over many years and they have houses. Very often, that is a short-term benefit as far taken account of local circumstances in terms of as the tenant is concerned. The attraction of receiving available housing and the needs of the area. For a sum of money seems good at the time, but six example, homeless people will have priority in a lot months down the line they are not so happy. They of situations in terms of access to houses and people have moved and in some cases have lost the support whose needs would suggest that they require a larger of community in particular localities. or smaller house. If suddenly you add to that new We want to see people living in the types of homes people who are coming forward as a consequence of that meet and interface with their needs. To take North the bedroom tax, local authorities cannot just discard Lanarkshire, which I am more familiar with than the way in which they have determined who should anywhere else, the allocation policy recognises that have priority and who has the greatest need for a and gives priority to people in these difficult particular house. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG08 Source: /MILES/PKU/INPUT/035419/035419_o008_michelle_131106 CORRECTED Final.xml
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6 November 2013 Cllr Harry McGuigan and Michael McClements
Q995 Graeme Morrice: It is the law of the land of if you like. We got a 92% return. Thirty councils had course. given us figures. We made an estimate based on that Michael McClements: Yes. I know there are to get to the figure of 82,000. We think that is a fairly authorities who are reviewing their policies. For robust figure in terms of the numbers that were then example, in some authorities, if you have rent arrears, impacted by the bedroom tax. There will be some it is very difficult to get any house. The perverse movement up and down; the figures are fluctuating. situation here is that people are almost put into rent We are not aware that the figures are coming down arrears from the start and then, in order to get out of dramatically in any way, but that is probably a more rent arrears, they need to move. Some authorities are reliable figure because, as I understand it, the looking at how to handle that situation and make it regulator got their figure from the RSLs who replied easier for people. We are talking about a resource of to their survey. While they got a fairly good return, it smaller houses that was over-subscribed in terms of would not have included everyone, whereas we were existing demand before the bedroom tax came in. That not going to the landlords; we were getting the figure is not a situation that can easily be absorbed, nor can from the benefit services in the councils. local authorities ignore how they define housing need in terms of local circumstances. Q997 Mike Crockart: Those figures from the benefit Cllr McGuigan: If we look at the sample we were service would take in both the council side and the talking about—Fife, North RSL side. Ayshire and so on—it is said: “In total, these councils Michael McClements: Yes. There are 47,500 council estimated availability of 4,697 one-bedrooms and tenants impacted and 35,000 RSLs impacted by it. 5,337 two bedrooms. For these local authorities, 18,000 tenants are subject to a one-bedroom reduction Q998 Mike Crockart: One of the things that they and 4,229 to a two-bedroom reduction. To put these thought could partially explain the discrepancy is the figures into context, North Lanarkshire”—I keep difference in housing stock between RSLs and repeating it, but of course it is the best council in councils, and potentially the higher proportion of Scotland— council tenants affected by it as opposed to RSL Graeme Morrice: The second best, Harry. tenants. Cllr McGuigan:—“identified 12,390 applicants on its Michael McClements: It may be a slightly higher common housing register requiring one or two- proportion on those figures. The latest figure I have bedroom property at April 2013, with a total annual seen is that councils have 54% of the social housing availability of property at 2,811.” It would take years stock in Scotland, so 47,500 versus 35,000 suggests to sort all of that out. We are working at it, as we there are proportionately more in the council sector always do, but this is a big worry for us, Graeme. I but not to a very marked degree. am very worried—and I know local authorities across Scotland are very worried—that we will see arrears Q999 Mike Crockart: You are fairly confident that accumulate, more problems for local authorities to your figure is the more accurate one because it comes handle but fewer resources to deal with the issues that from a source where the benefits have been decided. need to be dealt with to achieve the outcomes. There Michael McClements: It is coming from the benefits are some well-intended outcomes in the welfare service within the councils who are applying the reform that is taking place. There may well have been under-occupancy changes to the housing benefit, so some well-intended outcomes as far as the bedroom those are source figures as opposed to landlord figures. tax situation is concerned, but we need the resources Cllr McGuigan: We heard that evidence being given, to help us do that job. If we are hit with arrears, we and it is something I have now asked to be will not have those resources and the situation will get investigated. I want to be absolutely guaranteed that worse. It seems so simple. we are talking about the same thing, and it is a good question to put. Q996 Mike Crockart: How many tenants are actually affected by the reduction? Last week, the Q1000 Pamela Nash: In the beginning you clearly Scottish housing regulator, who produced a report, stated that DHPs were supposed to be for crisis gave evidence to us. That report gave a substantially situations and not long-term planning. Can you tell us different figure from the one you produced. They more about the evidence that COSLA has seen of how came up with 59,818 tenants, whereas your estimate important they have been in mitigating the full impact is 82,500. We tried to pin down with them why there of the bedroom tax? was such a difference. Do you have any information Cllr McGuigan: Pamela, can I say that prior to you could add to that? welfare reform the total amount made available for Cllr McGuigan: I am going to ask Mike to answer discretionary housing payment crisis situations in the that one. lives of tenants was about £2 million for the whole of Michael McClements: Our figure was one that we got Scotland? It is important to bear that in mind. at the end of May, so there will be some movement Michael McClements: In terms of the difference, or change in that figure now. I do not think it will be whatever figures we have seen in rent arrears, the substantially changed. We think that is a fairly robust amount paid out so far in discretionary housing figure, because it was provided by the benefits payments will be reducing. We expect that to be more services in the individual councils to the people to so as councils are perhaps more proactive, now that whom they were then applying the under-occupancy they have additional resource and are utilising reduction to housing benefit. That is almost at source, discretionary housing payment. The total fund cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG08 Source: /MILES/PKU/INPUT/035419/035419_o008_michelle_131106 CORRECTED Final.xml
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6 November 2013 Cllr Harry McGuigan and Michael McClements available when all the money is added in is about £33 Cllr McGuigan: No, it has not been confirmed. million. If authorities bid for the £20 million from DWP, that might take that up to about £35 million or Q1003 Chair: Have they set a figure of £20 million? something like that. The estimate I have seen of the I understood that figure was calculated at 150% times impact of under-occupancy in Scotland is about £50 whatever DWP had put in, so presumably, if the million. Even if all that money is spent, it will not Scottish Government’s policy remains unchanged next cover all the impact, and arrears will be seen as a year, the amount they put in will be a percentage of result of this. what the UK Government put in. Is that your The arrears in councils are still looking high. The six understanding? councils we looked at were showing a 41% increase Cllr McGuigan: No, I am not aware of that in gross arrears from 30 September 2012 to 30 calculation. September 2013. Not all of that may be to do with the Michael McClements: I think they made available bedroom tax, but it is probably the most significant £20 million to assist local authorities to deal with the thing that has been going on. The regulator mentioned consequences of the bedroom tax. seasonal factors, but, given that is over six months into the year, I think you would see some of those Q1004 Chair: I thought that £20 million was seasonal factors having worked themselves through. calculated so that local authorities could all spend Cllr McGuigan: Can I add to that, and it is another 250% of the UK Government’s allocation because the important consideration here? It worries me a little legislation puts a cap on what the local authority can that local authorities will become—I will not use the put in. Is my understanding correct? word “obsessed”—more focused on the bedroom tax Michael McClements: If £20 million was made and the support needs and resources that need to go available by the Scottish Government next year, for into that. We could find ourselves in a situation where example, and DWP made available less DHP moneys, those other cases for which discretionary housing it could not be spent as discretionary housing payment was set up become less prominent in payments. There may be other ways in which councils receiving attention than they should. That is could spend that money—for example, on some of something we have to be diligent about. They should the homelessness consequences and so on—but not as make sure that, for the other casualties that need to discretionary housing payments. access DHP, it is still doing what it was set up to do. As far as I am concerned, this can be only a very Q1005 Chair: Have the Scottish Government ring- temporary measure. I am not even sure it will continue fenced that £20 million for particular purposes, or is next year. We do not know what resources will be it available to local authorities to spend on anything coming from the DWP. they want? Michael McClements: My understanding is that it Q1001 Pamela Nash: That was what I was going to was made available to assist authorities to deal with go into. First of all, is there any indication so far that the consequences of the bedroom tax and the welfare the requirement for these DHPs is reducing? My reform changes. understanding is that people are not moving, certainly Cllr McGuigan: It was welfare reform changes. in Scotland and North Lanarkshire, into smaller Michael McClements: I do not think it is tied just properties yet because they are not available, and their to DHPs. circumstances are not significantly changing. Has COSLA seen evidence elsewhere in Scotland that Q1006 Chair: But is it ring-fenced? would indicate we would need less than £50 million Michael McClements: I think there is a degree of next year? discretion. There is an expectation that authorities will Michael McClements: There is no evidence that the use it to increase their DHP budgets. demand for DHPs is tailing off. I do not think we are Cllr McGuigan: There is no question but that that is seeing that. The numbers are continuing to rise, and the calculation that has taken place. It is expected that they are significant. Because councils have had that is how it would be used. “Ring-fenced” can mean additional funds made available, they are reviewing almost a Big Brother approach to these things. We do previous applications for DHPs where perhaps they not like ring fencing too much in Scotland. That is not have determined they will pay a percentage of the loss because we would spend the money on other things; suffered, or they will pay it for a few months. They it is simply because we believe we know how the are reviewing those judgments and going back over money can best be spent locally. We know the best those judgments to see if there is additional help that way to spend that money to meet the needs of the they can give people. We also do not know what is locality, but all the evidence has shown that that available next year. As far as I know, the DWP has money will be spent on DHP. But I make the point not announced the moneys that are available next year. again that it should not be spent on DHP. We should The Scottish Government have given an indication not be facing a situation where discretionary housing that they will make available the £20 million again payment becomes a rollover to sustain housing benefit next year, but whether that can be used wholly for money. That is not what it was set up for at all. We DHPs depends to some extent on the DWP. have to deal with the policy here and recognise its deficiencies. Q1002 Pamela Nash: I was not aware of that. Has it been confirmed that the Scottish Government will Q1007 Pamela Nash: On the additional costs, were make available £20 million? councils given any additional funding from DWP at cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG08 Source: /MILES/PKU/INPUT/035419/035419_o008_michelle_131106 CORRECTED Final.xml
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6 November 2013 Cllr Harry McGuigan and Michael McClements all to administer the requirements of DHP, and has Q1013 Pamela Nash: If you are doing a follow-up that fully met the additional cost of administration? survey, could you add that as a question, as well as Cllr McGuigan: Yes, they were. That is not included the admin cost? in those figures; it does not come out of the money Michael McClements: We will see if we can get a we are talking about here. That was money that had breakdown of other non-bedroom tax matters. to be negotiated with DWP. You never receive all that Cllr McGuigan: Pamela, you ask a good question. We you want, but I think in the main we are reasonably should look at that to make sure there are not other satisfied. casualties that are not being given the attention they should be. Q1008 Pamela Nash: I understand. For us to calculate the cost-benefit analysis of bedroom tax Q1014 Pamela Nash: I was just going to say that. Is throughout the country, we have to include also how there evidence that councils are being—I wouldn’t say much the UK Government have spent on overly-cautious—ultra-cautious about these funds administering those benefits. because other benefit changes are coming up for which they might need DHP money? Michael McClements: There was a sum of Cllr McGuigan: Possibly at the beginning, there has £10 million made available by DWP, but it was not been, but I would hope that, since the additional just for the administration. It was to assist— resources have become available, that hesitancy will have disappeared. It should never have not been Q1009 Pamela Nash: Was it £10 million across the getting applied to the cases that Michael just UK? explained. It is a question we have to keep asking to Michael McClements: Yes, that was in the UK; so it make sure that we review the number of cases coming was probably £1 million in Scotland. What we hear through. We will try to get that information to the from councils is that administration of discretionary Committee. housing payments is a very big burden on them. It is not always shown as additional spending; it is about Q1015 Pamela Nash: Previously we took evidence allocating even the different duties. from Shelter Scotland. One of the concerns they raised was the possibility of a postcode lottery in Scotland Q1010 Pamela Nash: But that is a spend; it is in terms of DHPs. There was concern that there was salaries. considerable variation in both the criteria in awarding Michael McClements: Yes, absolutely. DHP to people but also in how councils decided how much was put into the DHP fund. Mike asked for Q1011 Pamela Nash: Has there been any analysis of clarification earlier. The evidence we have seen is that that yet, or would it be possible to have an analysis of all councils are not putting in or topping up the DHP the costs to local government to administer it? fund. It is clearly called discretionary for that reason because it should be moulded to fit the requirements Cllr McGuigan: We would expect to be able to get of that area. Is COSLA confident that that variation is that information. based on need in different areas, or do you have any Michael McClements: It is quite complex, but we concerns that a postcode lottery is in place and would probably do some sampling on how that is perhaps that needs are not being met uniformly accounted for. We know from feedback that this is a across Scotland? considerable burden, and we are absolutely convinced Cllr McGuigan: The term “postcode lottery” is one that any saving to the UK Government has been that I don’t like, quite honestly—I know we do come shown in rent arrears, DHP spend and additional across it—because it suggests that there is a burdens on councils and RSLs in dealing with this. dereliction of duty by local authorities, and I find that hard to understand. Local authorities, working with Q1012 Pamela Nash: To go back to the point made colleagues and other partner agencies, are best placed by Mr Reid, at the beginning you highlighted that only to identify the needs, priorities and what services £2 million was available for DHP before the communities want to see in those areas. I have great introduction of this. Do you think that reflects the regard for my colleagues in Shelter, but what they proportion of DHP that has been spent on bedroom might call a postcode lottery are simply different tax now? needs that require to be met in a particular locality Michael McClements: We have not specifically asked and those being prioritised because there is a heavier what the awards are made for. It is clear, just in terms call for resources to be used in that particular way. of the size of awards and the number of applications, Convincing evidence would need to come forward that the bulk of the spend is on the bedroom tax. The from Shelter to show that there was a dereliction of numbers in May were about four to six times the duty. normal demand for DHPs. Some councils have told us about an eightfold increase in demand, but there Q1016 Pamela Nash: I suppose I was asking if you are other things for which people can make had seen any evidence of that. application for DHPs, not just social sector tenants but Cllr McGuigan: No. private tenants, who can demonstrate housing need. For example, DHP could be used for deposits being Q1017 Pamela Nash: It is clear that money is being paid to secure a house, if you are in receipt of spent at different levels in different areas of the housing benefit. country, and, of course, that should be the case cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG08 Source: /MILES/PKU/INPUT/035419/035419_o008_michelle_131106 CORRECTED Final.xml
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6 November 2013 Cllr Harry McGuigan and Michael McClements because of variation in need. I was just checking Michael McClements: Some councils chose to top up whether COSLA had seen evidence to the contrary early on. Quite a lot of councils decided to monitor and if it has any concerns that perhaps some areas are the situation, to see the level of demand coming not applying it. forward and how they would meet it. Those who did Cllr McGuigan: We are very aware of the fact that choose to top up had to make a decision about relative not all local authorities went for the 1.5 resource priorities. Wherever they are taking that money, they increase in the DWP moneys allocated to them. Some are taking it from somewhere else. As you are well went for 30% of that; some went for the whole 150%. aware, councils are under a lot of pressures, and they That is a matter for the local authority. If there was a would have to identify where those top-ups would rogue local authority that was not evidencing that come from within their budgets. There is a variation there were real reasons for spending such a low in how councils felt able to provide that money at the amount, because they are meeting it in some other start. That variation will probably not exist now to the way, that would be of concern to me and my same extent in Scotland. colleagues in COSLA. Michael McClements: In so far as there would be a Q1021 Mike Crockart: That is the point that Shelter difference between authorities, it would probably have is making. The variation in the decisions made by been reduced now with the additional £20 million councils at the start is what Shelter is describing as a made available by the Scottish Government. Fourteen postcode lottery. authorities had done some top-up in May. We would Michael McClements: It is a discretionary housing anticipate that all authorities will now top up to the fund; it is a power to top this up, so each authority maximum, so that element would change. We see a would have to determine the biggest priority in their different spend pattern in some authorities, but those area. There may be other housing priorities to which that probably had the least spend were some of the they would have to give more attention. The reality rural ones who had also had a similar need to top up. now is that they are all pretty much likely to top up to I think it is just a time difference. Everyone is now the maximum now that additional moneys have come focused on trying to help the people who need it and forward, but it is about balancing those priorities. target those who have not come forward at the After all, this need has been created by a UK moment. We would expect to see some of that even Government policy; it is not one that has arisen out over time. because of objective housing need there. This is a purely subjective need created because the UK Q1018 Pamela Nash: Shelter produced a paper with Government made a change in policy. Therefore, guidelines for local authorities. Is this something of councils had to consider whether or not to fund that which you are aware? Were COSLA and local need that has now been created by central authorities using this, or were there any other Government. guidelines available to local authorities on how much Cllr McGuigan: To bring it back to the UK they should top up and award DHP? Government, they instituted the policy but they are not Cllr McGuigan: I hope we would always listen to the responsible for the consequences. We find ourselves in representations that have been made by COSLA and a situation where there is no question that arrears that, where local authorities felt it was appropriate to would accumulate, because there are no homes for the be implementing their views and it would be helpful people living in the subsidised houses, as they would to them, that would be the case, but we would not call them, to go to. Instead of this being seen in any regard Shelter’s recommendations as necessarily way as a subsidy, it is simply taking money from local prescriptive ones. authorities. That is what is happening. The discretionary housing payments that are subsidising Q1019 Pamela Nash: But they would be distributed this particular policy are coming from resources that and considered. local authorities could use on other services. Shelter Cllr McGuigan: Of course. is the same as the rest of us; it has to look at that broader picture. Q1020 Mike Crockart: There is an inconsistency in what you are arguing. You have got to defend the Q1022 Mike Crockart: We have wandered rather decisions councils have made and the different from the point of the question, which was that you allocations and top-ups that each has chosen to make, were saying that the allocations were based on need. but it is quite a wide variety from some choosing not Councils had looked at their individual circumstances to top up anything at all to some using the full 150%. and allocated their top-up on the basis of need, but, To say that that is based on their assessment of the now that this extra money is available, suddenly the need in their areas seems to suggest an amazing need will be found to use that extra money. That is difference in need. If that is the case, surely you where the inconsistency resides. should be arguing that the extra money being allocated Cllr McGuigan: Extra money has been found. The from the Scottish Government should be allocated on threshold at which we say, “That is a priority one need the basis of that need assessment that the councils or a priority two need” is always there; it is moving have already done, but that is not what is happening. all the time. It has moved since last May, when it was The money from the Scottish Government is being a very low threshold for applications. There was a allocated across all councils based on the original high failure to secure DHPs because councils were DWP allocation. Both sets of circumstances cannot guarded about whether this money would be available be true. to them through the year to compensate for all of the cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG08 Source: /MILES/PKU/INPUT/035419/035419_o008_michelle_131106 CORRECTED Final.xml
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6 November 2013 Cllr Harry McGuigan and Michael McClements crises that could arise, but the picture has changed. A Q1025 Pamela Nash: I suppose that is what I am priority one need might now be up there. trying to get at. Is there any analysis of that or do you have any idea of the reason for that? Why are people Q1023 Mike Crockart: With respect, you are now who are entitled to it not applying? making Shelter’s argument. Those councils that Michael McClements: You could speculate. Some topped up to the full extent at the start set their hurdle people will perhaps not have been used to having to much lower because they had allocated the extra pay the rent. They will have had letters through their money themselves, whereas for some councils, who doors; they may have put those letters to one side and potentially had not allocated extra money but who may not have realised. The reality is that, to ensure those people do not get further into rent arrears and now have and are now reassessing, their decisions have a problem themselves, a lot of councils have now were made on very different criteria. That is the point realised that they need to be proactive. A lot of them Shelter was making. Because of those different top- are doing home visits, for example. Having said that, ups, the decisions being made were very inconsistent. even doing home visits—and I have seen the figures I guess you would argue that, with the same allocation from some councils—they are not managing to reach now available across all councils, that will equalise everyone. For a council to do that is very labour- itself, but that does not remove the point. intensive and is a costly exercise, but quite often Cllr McGuigan: That may be the case. Can I just councils are doing that. Highland’s figures of spend simply say this? Councils have a responsibility to have doubled in less than a month because they are ensure that they deal with the difficulties that arise taking that sort of proactive approach. day in, day out in communities. When we see a Cllr McGuigan: There is no easy way of doing this. situation where the misery that is being created by the You cannot assume that, because you go out there and bedroom tax is such that it causes us to have grave publicise something, even with extensive coverage of concern for the welfare of the people we represent— a particular issue, people will become aware of it. for example, my own authority of North Lanarkshire Many people—God help them—do not have the was one of the 14 that maximised the top-up straight competencies or responsibility to make themselves away—we make the decisions accordingly. I cannot aware of it and tune into that type of thing. There is answer for every local authority in Scotland, but I no stereotyped Mr Public out there. think that the vast majority of them were being maybe a bit more studious, and perhaps waiting to see if they Q1026 Pamela Nash: I understand that. I am sure all could get extra money before committing themselves. representatives here told constituents about DHPs, and If that extra money was not coming, I think they months in they still had not heard of it or picked it would still have had to commit to doing what we did up. What more can be done? There are still people in North Lanarkshire and what the other 14 local who are just not getting reached. Also, is there an authorities across Scotland have done. issue with the application process at all? Could that Mike Crockart: I am not so sure. be simplified for people? Is it putting people off? Chair: We have got to the stage where we are Michael McClements: Councils are looking at that. debating the same ground, so let’s move on. People have to apply; that is the way DHPs have to work. You have to have an application. I know that Highland, for example, has looked at a simplified Q1024 Pamela Nash: There has been recent press application form, and other councils are looking just coverage of local authorities, including, dare I say, now at how they can reach people. North Lanarkshire council, who have topped up 150% but still have quite a lot more money left in the fund Q1027 Pamela Nash: Is the design of the application than was expected. Clearly, this is not an indication of form in the hands of each local authority? need because the arrears still being accumulated show Michael McClements: Yes. that. What are local authorities doing to promote the availability of DHPs and available support, and what Q1028 Pamela Nash: It is not a standard form for more could local authorities be doing? Scotland or across the UK. Michael McClements: The position of North Michael McClements: No. It is left to local authorities Lanarkshire at the moment is that they have spent to determine, but authorities are now looking at any 124% of the money made available by DWP for barriers to people making application and ways to DHPs. They are now eating into their top-up money, highlight, publicise and work with partners to identify and we are halfway through the year in that respect. those people for whom they have to target assistance. A lot of other authorities, who had set their policies Those are all in the figures now. to try to make sure the funding available lasted throughout most of the year, are now reviewing the Q1029 Pamela Nash: How does COSLA share best policies and revisiting previous determinations they practice in areas like this? Obviously, some local had made. A number have identified people who they authorities will have better experience. How is that see going into rent arrears but have not come forward done? Is it a formal process, or how would you do and asked for DHPs. The position changes all the that? time. I know Renfrewshire council identified 1,800 Michael McClements: Because it is concerned people who had a rent reduction as a consequence of primarily with policy we do try to encourage best the under-occupancy measures and at that point only practice. We share information that we get about the 600 had made application for DHPs. spend and what other authorities are doing. Councils cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG08 Source: /MILES/PKU/INPUT/035419/035419_o008_michelle_131106 CORRECTED Final.xml
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6 November 2013 Cllr Harry McGuigan and Michael McClements obviously pick up from each other. That is clearly Q1031 Mike Crockart: There are two aspects to the happening at the moment. Information about what we question: there is the part about gathering information, are identifying that we make available to you will go which perhaps you are uniquely best placed to do, out to all the councils, but we are not an improvement and then the analysis. If you were able to gather the organisation as such. We are not the only ones who information, you would not necessarily then have to can share best practice, but we certainly do what we do the analysis. There are plenty of other can to encourage authorities to share information organisations that would love to get their hands on the among themselves. data and put some meaning into them. It is difficult Cllr McGuigan: We do what we can. Graeme sat on for this Committee to come up with recommendations, many of the committees of COSLA and saw how it unless it is able to back them up with evidence about worked. COSLA cannot direct its member councils to what the impact is and what difficulties people face in do any particular thing. It can provide good advice being able to move to a smaller house. For that we and information to them to encourage them to learn really need to know the detail of the housing stock, from best practice happening at the moment across especially geographical factors and how difficult it is Scotland. We are constantly alert to that need, no more for people to change their behaviour. Therefore, if you so than in DHP, to make sure that we help councils have that opportunity, it would be useful to gain more achieve the best outcomes for people that we can. information to help the debate. Pamela Nash: Exactly. Cllr McGuigan: We would obviously desire to be able to provide as much information as we can to help you Q1030 Mike Crockart: Having fallen out with the to combat the worst features of this legislative faux Chair over statistics at the previous session, I have pas, as I would call it. We would try our very best to now been given all those questions. I want to look at get that information. It would not be a routine the data gathering you do, and whether there are any undertaking on which we would embark; it would be particular things you would have liked to have known an undertaking to try to get into some of the detail of but did not manage to get the data to back it up. We this in a way that can help you. I can certainly give have already talked about not knowing the number of you a commitment that we will try to do that as best people who are downsizing or the exact proportion of we can at the COSLA end. DHP spent on the bedroom tax. You have talked about a feeling about the general picture of a mismatch in Q1032 Mike Crockart: DWP have said that they are housing stock between the demand for particular going to do a study of the impact of the bedroom tax. property types and the supply, but do you have Do you have any information about when they are detailed information on those? Is it something you are likely to publish their findings? I take it you would planning to get? What is the future? want to make the point that you would want to have it sooner rather than later. Michael McClements: COSLA does not have an Michael McClements: Our concern is that they seem analytical research capacity, so our ability to gather to be talking about a two-year independent review. We this information is constrained by the size of the need to see their analysis of what is going on. You are organisation and the resources it has. We share with asking about data, but our concern, overall, is that we other organisations. For example, stock analysis is do not think there was a proper impact analysis done quite complex. We have tended to do some sampling when this policy was dreamed up, if you like. What of those kinds of things rather than try to check the has been encountered is what a lot of people predicted position with every council. For example, at the end at the time this change was going through the of June we did a survey jointly with the Scottish legislative process. We think it is important that DWP Government. We were intending to repeat that survey evaluate how that policy is working out in practice. A and ask more refined questions, but the Scottish two-year time scale is really far too late; we need to housing regulator was then doing a survey and we be seeing some analysis of what is going on across thought we would await the outcome of that before the UK at this point. we determined whether we should do something else, Cllr McGuigan: We have been negotiating with the because a lot of people are seeking the same DWP on some aspects of this for the last two and a information from the same people. We certainly want half years, and it has been quite labour-intensive. It is to be clear about the rent arrears position going not personal, but I do not think DWP come out of it forward and what has happened with DHPs. with a lot of credit. They have dragged their heels, We did a good practice event last year, and we will and only when pressure mounted on them were they do one in the new year, not just on the bedroom tax able to move. That is not to say we do not engage but the general challenges to housing delivery because fully. We would want to see DWP undertake with us of a lot of the welfare reform changes. We are looking a full review of the kind of support services that we at the bedroom tax but also looking forward to the are providing and how DWP resources are being implications of direct payments and so on, and sharing utilised to alleviate the pain out there. Although practice on what has been happening. So we will do discretionary housing payments should not be the that, but, with regard to analysis of some of the very remedy for the bedroom tax and it is the wrong use sophisticated stuff about allocations, demand and of discretionary housing payment, we are hoping to housing registers, for example, we would not have the see additional resources coming to meet the need out capacity to gather all that information across all there next year. We do not know what is going to 32 councils. Some of it is quite hard. To gather some happen next year; we do not know what resources will of that stuff is almost an academic study. be available from DWP next year, and that is a big cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG08 Source: /MILES/PKU/INPUT/035419/035419_o008_michelle_131106 CORRECTED Final.xml
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6 November 2013 Cllr Harry McGuigan and Michael McClements worry for us. We still have to prepare for the crisis that second tier. I can understand that for political reasons may arise should DWP cut their support next year, but they may not want to do that, but it does sound as if we can try to get into that kind of depth. it is the only way we are going to get clarity. Cllr McGuigan: That is a matter for the particular Q1033 Chair: What is your view of the outcome of local authority, not for COSLA. I would not want to the recent appeal tribunals in Glasgow and Fife that venture into the territory of what I would do if it was found against the local authorities? North Lanarkshire. Michael McClements: We track these, perhaps as the Michael McClements: It is also open to the DWP; Committee does. Generally, we do not issue guidance they can take it to the second tier if they want. to local authorities because they need to take account of appeal tribunals and interpret the regulations in Q1037 Chair: Even though they are not an affected their own way. One of the difficulties we observe is party, they can still take it. that it is quite problematic because first-level appeals Michael McClements: Yes. do not have wider application. A next- door neighbour can be in a very similar circumstance. Local Q1038 Graeme Morrice: I was wondering how authorities are then unable to apply the logic of that welfare reform and the bedroom tax, in particular, was judgment to the next-door neighbour, unless it is a impacting on tenants seeking temporary second-tier appeal. Authorities have to take account accommodation and also the provision of supported of what has been determined. A lot of difficulty about housing in Scotland. the definition of “bedrooms” is starting to arise. The Cllr McGuigan: In Scotland, temporary direction or guidance given to local authorities by accommodation is provided mainly by local DWP was that they should rely on how the landlord authorities. That would happen in the private or leased defines “bedrooms”. When cases have gone to appeal, sector in England. We find ourselves in a difficult other judgments have been applied about sizes, what situation here. We cannot secure exemption from the is reasonable and so on, but there is no clarity in the bedroom tax for local authority premises, yet the law. Local authorities still have to follow the private or leased sector is relieved of it. regulations and guidance as best they can. When you talk to people, it feels as if they are trying to operate Q1039 Chair: When you refer to the private sector, against a moving target here. Some of this shows the does that include housing associations? illogicality of the whole policy. Cllr McGuigan: No. You would not include a housing association in that, would you, Michael? Q1034 Chair: You expressed the problems that the Michael McClements: It would depend on whether it uncertainty is causing. Would you like the local was leased or licensed. The difficulty arises for authorities concerned to appeal to the second tier so council-owned property. that we would get a clear outcome—a clear verdict? Michael McClements: It is a decision up to the Q1040 Chair: But I am trying to clarify which side individual authorities. One of the difficulties is that of the fence housing associations fall in this particular the local authorities have no choice perhaps in the case. Do they fall on the same side as councils or the initial determination. They are operating in relation to private sector? how they interpret the regulations under which they Michael McClements: In relation to temporary are operating. They may take the view that they have accommodation? got a decision and they implement it. It is up to local Chair: Or supported housing. authorities to decide whether they want to go to Michael McClements: I am not sure if you are asking second-tier review, but some may not disagree with me generally whether they are so regarded. the decision that has been reached. Often, they would Cllr McGuigan: I know the question you have asked. not want to go to second-tier review for a decision You are asking that question only in respect of with which they did not disagree just to get the temporary accommodation. RSLs do provide precedent set for everyone else; so it is a difficult one temporary accommodation in some circumstances. for authorities. There is not a lot of temporary accommodation in Scotland, but my understanding—we can check this Q1035 Chair: If the two authorities concerned, out—is that they would fall in the same sector as local Glasgow and Fife, do not go to the second tier, does authorities. That is my understanding. that mean they have to implement the decision of the first tier for all the people affected? Q1041 Graeme Morrice: Local authorities have a Michael McClements: I am not an expert in this, but statutory role in relation to assisting homeless people my understanding is that the decision is binding on by providing accommodation. That may be local whoever moved the appeal in the first place. It does authority accommodation or housing association not necessarily have wider application. Those accommodation, or they may contract to bring in authorities will check with their own legal services private rented accommodation, or bed and breakfast their interpretation of the judgment in light of the accommodation. The private sector has no role, and regulations, but until there has been clarification they the housing association sector obviously supports are a bit hamstrung in how they can operate. local authorities in that regard. That is my understanding. Q1036 Chair: It sounds as if the only way we can Michael McClements: The situation in Scotland is get clarification is for a local authority to go to the that 57% of temporary accommodation is provided in cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG08 Source: /MILES/PKU/INPUT/035419/035419_o008_michelle_131106 CORRECTED Final.xml
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6 November 2013 Cllr Harry McGuigan and Michael McClements council-owned properties. By comparison, for penalised as a result of that, plus there ain’t going to England it is 17%, which includes both council and be much temporary accommodation out there, so it is housing associations in England, so there is a very not always going to match exactly the family different stock of temporary accommodation in circumstances of those homeless people. Sometimes Scotland. In England, in particular, the majority of that accommodation is going to be far too big, but it arrangements are through leases with third parties or is done only on a temporary basis until they get licence arrangements. That exists in Scotland, but it something more suitable and a permanent allocation is very much a minority. The DWP have granted an at the end of the day. exemption from both the bedroom tax and benefits cap Cllr McGuigan: The whole idea of temporary where it is leased or licensed temporary accommodation is to enable us to offer temporarily accommodation but not where it is council-owned that kind of shelter for a family, until such time as we temporary accommodation, which is the majority of can house them elsewhere. It goes without saying that stock in Scotland. We do not understand the basis of we can do that only with the houses that are available that exemption. The people who require access to to us at a particular moment in time. If we do not have temporary accommodation have very little choice as a single-bedroom flat to put a single person into, we to what is available to them. It seems perverse. There have to find suitable accommodation for them. It may appears to be some penalty that applies to them if the well be we would judge that the best accommodation accommodation happens to be owned by the council, for that particular individual, on the basis of need, whereas in other circumstances it is not. If it is under a would be an available two-bedroom flat. That could leased arrangement, the bedroom tax would not apply. happen.
Q1042 Chair: Would that be a lease from an RSL? Q1048 Graeme Morrice: To clarify it further, if it Would it apply in that case? is not council housing—say it is housing association Michael McClements: My understanding is that, if it accommodation, because there will be local is not council-owned and the accommodation is agreements among RSLs and local authorities about provided as part of a leased arrangement, it could be the percentage of housing association housing to be an RSL, but in Scotland almost 60% is council- made available to local authorities and temporary owned property. accommodation for homeless people—are we saying that the bedroom tax applies there as well? Q1043 Chair: But for councils like Glasgow or Cllr McGuigan: That is my understanding. As far as Argyll and Bute, for example, that divested housing associations are concerned, a considerably themselves of their housing stock to an RSL, how fewer number of temporary accommodations would would that apply in a case like that? be available through the RSL sector than the local Michael McClements: It also depends on whether it authority. is provided as part of a lease or licence arrangement, Graeme Morrice: How does this impact upon and sometimes that is not the case. supported housing in particular?
Q1044 Chair: Can you explain the difference Q1049 Chair: Before we go on to supported housing, between “leased” and “licensed”? I want to clarify one point. If the council leased a Michael McClements: Is there a formal lease? For house from the private sector or private landlord for example, maybe a provider is providing temporary temporary accommodation, are you saying the accommodation. The property is owned by the bedroom tax would not apply in that case? council, but the service is delivered by a voluntary Cllr McGuigan: Yes. organisation or a support service—Women’s Aid, for example. Q1050 Graeme Morrice: How does all this impact on the provision of supported housing in Scotland as Q1045 Chair: Is that what you mean by “licensed”? well? Michael McClements: I think the definition of Michael McClements: Supported housing is quite “licensed” refers to English housing legislation. complex. Graeme Morrice: Oh dear. Q1046 Graeme Morrice: Can I just clarify what you Cllr McGuigan: Why did you ask that question? said there? In terms of the unintentionally homeless Michael McClements: A set of arrangements has who are allocated temporary accommodation by the evolved over the years about how supported local authority, which in most cases in Scotland will accommodation has been funded. Policy is now be council housing, if they are claiming housing changing, making those arrangements and the funding benefit and the accommodation is too big for them, vulnerable, and making people who are accessing that they are hit with the bedroom tax. Is that what you supported accommodation subject to things like the are saying? bedroom tax and the benefits cap. Cllr McGuigan: Yes. The DWP spoke first about support-exempt accommodation. My understanding of that as a Q1047 Graeme Morrice: Is that not unfair, because definition is that it goes back some years. It was not if, at the end of the day, a local authority is allocating intended for this purpose as it has now been applied. on a temporary basis to homeless people property that Without getting into the complexities, it is a narrow is too big for them, it is not the homeless family’s definition of what constitutes supported fault? It seems really unfair to me that they are accommodation. It does not include, for example, cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG08 Source: /MILES/PKU/INPUT/035419/035419_o008_michelle_131106 CORRECTED Final.xml
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6 November 2013 Cllr Harry McGuigan and Michael McClements council-owned property, so it is a narrow definition that that is not lost in a change of how housing cost of supported accommodation. Saying that people in support is delivered. supported accommodation are exempt from the Cllr McGuigan: We are not answering your bedroom tax and the benefits cap is not true; it applies question, Chair. to only a proportion. Chair: The answer is that we do not know. We do not have a clear understanding of the amount Cllr McGuigan: We will write to you on that. I will of supported accommodation in Scotland and the take a note on this and we will endeavour to get arrangements that have been supported from the some answers. housing benefit system. We have been working with Chair: If you can find out and write to us, that would the Scottish Government to undertake a survey across be very useful; thank you. local authorities in Scotland to try to get a clear picture both of what all the existing arrangements are Q1052 Mike Crockart: I think we have covered the and the quantum of the benefit money that supports last point to some extent, because you have talked that. about the meetings you have had on this issue with We are concerned not just about the bedroom tax and DWP and the Scottish Government over the last two benefit cap, but we are concerned going forward, and a half years. Could you outline how those have because we understand that DWP’s intention is to gone, whether your concerns have been listened to and identify the supported accommodation and separate whether further exemptions or money have been out the support costs from housing costs and localise identified? We have not talked about the rural side of them. Our concern would be that that needs to be all things where extra money was found to try to defray accounted for, and we are concerned that the some of the issues there. You have just mentioned definitions the DWP are using at the moment are very supported accommodation where, presumably, the narrow and will not include all that is currently opposite is true. Can you outline the meetings you supported. They have recognised that support-exempt have had with DWP and the Scottish Government and accommodation is not sufficient, but it does not seem say what the response has been? clear at this point that they are prepared to widen the Michael McClements: We had a variety of offers of definition sufficiently to include all the support meetings. DWP certainly want to meet with local accommodation that currently attracts support from authorities a lot concerning the implementation of the housing benefits system. universal credit. We found it more difficult to have the Cllr McGuigan: I understand the point you are same discussions about other aspects of welfare making, Graeme. There are issues about the quality of reform changes. We do not think, for example, that supported accommodation that we consider should be there was a proper understanding of the housing reasonable and decent. We think there is a dangerous landscape in Scotland. Things like temporary path we could travel along here, in that we could accommodation, the size of the social sector and so arrive at the conclusion that, if you put someone in a on are quite different. We do not think that the policy home or furnished flat on a temporary basis, you have direction was formed with sufficient understanding. met all the needs of that individual at a particular We have endeavoured to try to fill that gap. Our moment in time. We would contend that you have not. political representative met Lord Freud and has Most of the people that I have seen going into written to Ministers. We have had some progress in temporary accommodation require other support and some areas. The increased money for DHPs is due in help, and there are costs associated with that. That part to the whole lobbying efforts of COSLA and leads to the big debate about what costs should and others. Having said that, we do not see any real shift should not be met. We have to be careful that we do in the fundamental policy direction. not drive the level and quality of supported There has been a willingness to look at aspects of the accommodation down to an embarrassingly indecent delivery of universal credit. We are in discussions level. with DWP about how local support services can be delivered. Our view is that that support is funded Q1051 Chair: If the supported accommodation is adequately and should be there for people. We owned by an RSL, is it covered by the bedroom tax, welcome the alternative direct payment options that or not? have been announced, but we are still very concerned Michael McClements: It is subject to different about how they will operate in practice. There is still interpretations. The question of whether or not the a potential for a lot of people to get into arrears and support is delivered as part of a leased arrangement debt. This is such a big change that it needs to be comes into it. It is confusing. The practice across phased in very gradually and carefully. While we authorities may not be consistent with how they have welcome the fact that there has been some adjustment, interpreted the existing rules because they are quite we still think this is a massive change. We are talking confusing, and overlaying that with the bedroom tax about 380 local authorities in Great Britain and 3,000 and benefit cap makes it more complicated. Some RSLs. I am not clear—I do not think anyone is—how support accommodation may not be attracting any DWP will organise the operation when benefit additional support from the housing benefit system; services are no longer delivering housing benefit to other support is attracting support. COSLA does not ensure that all the people who should be exceptions, have a full understanding of all those arrangements or if you like, are recognised and it gets handled the quantum. Our concern is that it could be quite a efficiently. We as councils and registered social few million pounds across Scotland and it is important landlords will be carrying that risk. cobber Pack: U PL: COE1 [O] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG08 Source: /MILES/PKU/INPUT/035419/035419_o008_michelle_131106 CORRECTED Final.xml
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6 November 2013 Cllr Harry McGuigan and Michael McClements
Q1053 Mike Crockart: And on the Scottish or spouse. It is astonishing that that differential exists. Government side? If you are disabled and your wife is also your full-time Cllr McGuigan: We have had discussions with Lord carer but needs to sleep in a different room, you will Freud. He has tried to be very open and frank with us. still face that benefit cut. That is unbelievable. I am While there has been a generous reception, there have sure all your heads are nodding and you will do not been any generous outcomes from it. I think we something about that one. managed to get a shift in the situation in Northern Councils are being left to determine which disabled Ireland. They got parity there—seven weeks of direct people are eligible for discretionary help, and that is payments. an unenviable position for us to be placed in. The UK Michael McClements: For two months. This is the Government’s own impact assessment suggested that, alternative payment arrangements. We recognise that of the 660,000 households affected by the bedroom as a movement. tax, 420,000 would have a disabled member. Equally, Cllr McGuigan: On the main spinal cord of welfare the Government need to adopt a clear policy for reform I don’t think we have had very much people with disabilities and care needs. The needs of willingness to listen. Well, there has been a separated parents who have access to children should willingness enough to listen, but there has not been also be considered and addressed. much translation of that listening into meaningful I have said repeatedly—I will say it again—that actions to alleviate the worst aspects. As I said at the discretionary housing payments are not a solution, but beginning, I do not think it is malice that has brought we need the DWP to make available at least the same this in. I have always said on behalf of COSLA that level of resources next year to enable us to continue we recognised that welfare reform needed to be to meet the difficulties we are facing out there, and reviewed and looked at in great depth to improve it we need to get an announcement of that plan as soon so that people could get the benefits to which they are as possible. You cannot leave this up to a month entitled. There are lots of people under the old system before it is due to kick in and expect us to be able to who were not getting that. I have no difficulty with provide the support arrangements that are needed. that aspect, but when that welfare reform moves into The last point is the one we have just been talking a punitive mode, in the way the bedroom tax has, it about. The nature of temporary accommodation in leaves us feeling very frustrated. We have made the Scotland is quite different from that in England, where politest and strongest representations that we can—I most people in temporary accommodation are exempt am not often as polite as I would like to be—but we because the accommodation is leased or licensed. We have not had much change out of that. We will keep trying. will try to dig into that deeper. In England, 50% is private leased property; 17% is council or housing association. That is the English scene. In Scotland it Q1054 Mike Crockart: I did ask about meetings is 57%. We are saying that all those in temporary with the Scottish Government as well. What is the accommodation should be exempt, and we hope that position on that? you will consider that to be an important aspect. Cllr McGuigan: There had to be a bit of push in order to make the Scottish Government realise that they had Maybe I am flying a kite here, but I want to say a a responsibility in this particular matter as well as little bit—and then I’ll shut up—about other welfare ourselves; that they could not stand on the sidelines reform impacts. We are really worried about direct and point their finger at the UK Government; and that payments when universal credit comes in. While the they had a responsibility to work with us to find ways proposed safeguards, like ability to switch back to and means of relieving the social pain out there. We landlord payments after the two months of arrears, are did that and we got it. It wasn’t just us; there were welcome—I spoke to Lord Freud about that, and that other key agencies doing that too. But initially there made a difference—direct payments of all benefits in was a reluctance to adopt a political stance rather than one lump sum represent a massive and risky social a solution approach. They have shifted from that, and, experiment. I do not think I need to go into any detail hopefully, it continues and will improve even more. about what the risks are. We start to get into agenda matters and so on, but that worries us greatly. Q1055 Chair: If members of the Committee do not Councils and RSLs will carry this risk. We do not have any further questions, before we conclude, is know how efficiently DWP will operate the proposed there anything else that either of the two witnesses alternative payments, and we lack any detail of how wants to say to get off his chest? they propose to operate, as Michael was saying a Cllr McGuigan: I will run through this very quickly. minute ago, across 380 councils and 3,000 RSLs. I am I have made some points. What do we think we could nearly finished, Chair. recommend to the Committee? Fourteen per cent and Chair: Take your time. You have come a long way. 25% reductions are much greater than typical rent We do not want to cut you short. differentials for different sizes of properties in areas Cllr McGuigan: You are such a gentleman. I have a of Scotland. Any reduction being applied should train to catch as well. People are being squeezed with reflect these rent differentials in social housing in an a whole range of benefit changes, especially breaking area. That is one wee point I would like to leave the link with inflation and the operation of the 1%. with you. We hope that paying the council the rent will be the The DWP have said that an extra bedroom is allowed top priority against other pressures on household if a disabled person has a live-in or overnight carer, budgets. We are hoping and praying that they will pay. but that does not apply if the carer is also your partner That is not necessarily the outcome we expect. cobber Pack: U PL: COE1 [E] Processed: [10-12-2013 14:38] Job: 035419 Unit: PG08 Source: /MILES/PKU/INPUT/035419/035419_o008_michelle_131106 CORRECTED Final.xml
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6 November 2013 Cllr Harry McGuigan and Michael McClements
Remember that demonstration projects have not tested along and talk to us this afternoon. We have found it any of this, so we will have to wait and see. extremely useful. What you have said will be The last wee bit is that, when it all goes wrong, it is extremely helpful to us when we put together our the people in the locality who suffer the pain and recommendations to the Government. anxiety, and local authorities have to pick up the Cllr McGuigan: We will try to get that extra pieces. I am a great fan of the idea that we have three information to you as soon as possible. governance levels in the United Kingdom: local government, the Scottish Government and the UK Q1057 Chair: Is there anything else you want to Government. I do not think we talk as much to each add? other as we should to make sure that the outcomes we Cllr McGuigan: Not at all, Chair. I would like to can secure are better ones for the people we represent. thank you and your colleagues sitting round the table. I will now shut up, and thank you, Chair. Some I know very well; others I do not know, but I have enjoyed sitting here and having the opportunity Q1056 Chair: That was a good observation on which to talk to you. to end. We certainly should be talking a lot. Thank Chair: Thank you very much. you very much for giving up your day today to come cobber Pack: U PL: CWE1 [SO] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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Written evidence
Written evidence submitted by the Chartered Institute of Housing Scotland Executive summary — The welfare changes are a mixture of reforms and cuts: paying Universal Credit direct to tenants is a reform, whereas the under occupation deduction is largely intended as a money-saving measure. — The under occupation deduction leaves tenants with extremely difficult choices, and puts landlord between a rock and a hard place. There is no shortage of calls for landlords to avoid evictions and write off arrears, but relative silence when it comes to addressing the consequences in terms of lost rental income. — These consequences for landlords go well beyond a threat to the services it provides for tenants: the predicted losses are already a significant factor in deterring social landlords from building new housing, which is now a highly risky activity. — The need for tenants to pay rent direct to their landlord means it is crucial that a range of suitable payment options are available to people who have hitherto chosen to operate in the cash economy: “banking the unbanked” is important but is not the only solution. — Whilst it is still early to assess the full impact of the changes on people in private rented housing, the changes are already impacting on local councils’ ability to use the private rented sector in discharge of their homelessness duties, not least as the Local Housing Allowance for people under 35 now covers only the cost of a room in a shared house. — The Scottish Government does not have the power—and should not be expected—to financially “rescue” tenants and landlords from the impact of the reforms, but it is using its powers to support the provision of advice for tenants and practical support for landlords. — Political posturing on the reforms, at local, Scottish and UK levels, will continue, not least ahead of the 2015 General Election and the independence referendum, but a key role for CIH Scotland is to help landlords focus on implementing the changes in a manner which is as sensitive as possible whilst maximising rental income.
Introduction About CIH Scotland 1. The Chartered Institute of Housing (CIH) is the professional body for people involved in housing and communities. Our members work in local authorities, housing associations and co-operatives, Scottish Government and Government agencies, voluntary organisations, the private sector and educational institutions. 2. Should the Committee wish to get in touch with CIH Scotland about this submission, key contacts in our Policy and Practice Team are David Bookbinder ([email protected]) and Lyn Kilpatrick ([email protected]).
General comment on the reforms 3. The welfare changes are a mixture of reforms and cuts. On the original aims behind the reforms, CIH Scotland is supportive of the intention to create a simplified system whereby it pays to take up work. In theory, combining key benefits into a single Universal Credit payment should support this objective, removing the multiple tapers which together mean that someone is only 5p in the pound better off after taking up work. Unfortunately, the existence of a second taper for Council Tax Benefit (which is not included in Universal Credit) significantly erodes the intended benefit of making work pay. 4. The under occupation deduction is, in CIH Scotland’s view, a cut rather than a reform. Whilst the DWP argues that it will lead to a better and fairer use of social housing stock, its own estimates of the savings the deduction will create show it expects around 85% of affected tenants not to move. Ministers have suggested that it is wrong for social housing tenants to “enjoy” extra bedrooms when private tenants do not. But we believe that it is not appropriate to compare the two sectors, as in the social sector many tenants expect to be living in their home as a long term and often life-long arrangement, compared with what has traditionally been the more transitory nature of the private rented sector. The unjust nature of the deduction is accentuated by the DWP criteria which, for example, make no allowance for adults who need separate bedrooms because one or both has a significant disability. 5. The payment of Universal Credit, including support with housing costs, direct to individuals (instead of Housing Benefit being mandated directly to social landlords) is a genuine reform. Separating out the housing costs element of Universal Credit for payment direct to the landlord would have reduced what the DWP regard as the simplicity of the new system, as well as being seen by the DWP as eroding the aim of encouraging personal responsibility to budget. However, it will be a radically new challenge for people already faced with myriad difficulties in paying for rent, heat, food and other living costs, and the consequences for social landlords are likely to be serious—significantly greater than the impact of rent loss as a result of the under occupation deduction. cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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Impact of the Housing Benefit reforms in Scotland Under occupation deduction 6. It will be some months before the housing sector can make any meaningful assessment of the impact of the under occupation deduction on tenants and landlords. At the time of writing (end of May) ad hoc feedback from some landlords suggests non-payment rates of between 30% and 70%. Caution should be exercised with such early figures, not least as some tenants not paying now may start paying shortly, with the opposite also possible in some cases. 7. A complicating factor is that many tenants who are unable to pay some or all of their under occupation deduction will already have been in arrears before April 2013. DWP baseline research for the Direct Payments Demonstration Projects showed that 52% of tenants in receipt of partial Housing Benefit were in arrears. 8. On top of the impossibly difficult choices facing tenants, the dilemmas facing social landlords should not be underestimated. Whilst the advent of direct payments under Universal Credit is likely to be the biggest hit for landlords in terms of lost income, the under occupation deduction brings real moral dilemmas. Particularly in Scotland, with our progressive homelessness legislation, widespread eviction for under occupation arrears is not seen as the easy answer. 9. The great majority of councils and housing associations in Scotland have long had a policy that they are most unlikely to evict tenants who are engaging with the landlord and making every effort to pay their rent. This is exactly the approach of most recently publicised “no evictions” policies, meaning that eviction, as an option, is limited to those tenants who simply fail to respond to the landlord’s repeated efforts to contact them and do not make any effort to discuss how they might pay their rent. 10. An unintended consequence of the political pressure on landlords to declare a “no evictions” approach is that it may well give a message that, ultimately, it will not matter if a tenant cannot pay: this is an unfortunate message, both for affected tenants and for the majority of tenants not directly affected but for whom a reduction in income to their landlord nonetheless has potentially significant implications. 11. CIH Scotland believes it will not be uncommon for many tenants to be engaging with their landlord and exploring every way of resolving the situation one way or the other, but ultimately still failing to pay the deduction, move to a smaller home or increase income by, for example, finding work or extending existing hours. In these situations some landlords may feel that all they can do is write off the losses. Loss of income threatens the landlord’s ability to provide high quality repairs and management services, and longer term stock modernisation. It also carries the threat of the landlord’s lenders reviewing existing covenants and potentially changing terms and conditions, leading to greater loan costs requiring to be paid from rental income. And at a time when subsidy reductions are making it increasingly difficult to build new social housing at genuinely affordable rents, the welfare changes make investment in new homes even more risky than it already is.
Paying and collecting rent under Universal Credit 12. With Universal Credit being subject to a phased introduction, starting in October 2013 (involving far fewer claimants than was first envisaged), it will be 12–24 months until the impact can start being assessed. The housing sector will be hoping that rent loss is no worse than that so far evidenced in the DWP’s six Direct Payment Demonstration Projects across the UK, where the loss is reported as varying from 3% to 9%.1 A concern, though, is that whilst the demo projects are piloting direct payment of Housing Benefit—a clearly identifiable element of benefit paid to claimants, support with housing costs under Universal Credit will not be separately identified but instead will be combined with the other benefits which make up the single payment. 13. The demo projects also benefit from long-established and fruitful relationships between social landlords and the local authority’s Housing Benefit function, which generally facilitate early identification of potential problems and early action to address them. Under Universal Credit, this local expertise will largely be lost as the main communication point for all UK landlords across both rental sectors will be a centralised DWP call centre in England. Further, with direct payment of Housing Benefit to landlords meaning that most communication has been between the landlord and the council’s Housing Benefit function, Universal Credit means that the new “relationship” will be between the DWP and the tenant who has previously not felt part of a payment culture. Time will tell whether the DWP is prepared for this resource-intensive engagement. 14. As is already happening for those affected by the under occupation deduction, Universal Credit will make it even more crucial for tenants to have a range of options for paying their rent. It is not simply a case of “banking the unbanked”. A substantial minority of tenants do indeed have a bank account but use it very little, if at all, and do not want to use it to pay rent. Charges and penalties, for example if a direct debit fails because there is not enough in the account, may well have acted as a deterrent to active use of the account. 15. With financial support from the Scottish Government, CIH Scotland is currently preparing guidance for social landlords on rent payment and collection under Universal Credit. We will be happy to forward a copy to the Committee when the guidance is ready around late June. 1 http://www.dwp.gov.uk/docs/direct-payment-demo-figures-may-2013.pdf cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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16. The UK Government is now playing down references to a “digital by default” approach to Universal Credit claims. But whatever fears housing providers may have about the difficulty tenants may have making an online claim (eg the prospect of being “timed out” when completing a 90-minute application form), it seems certain that people unable to claim online may face greater challenges. Whilst we know that some are actively working to promote digital inclusion this is something most landlords cannot address by themselves, and it is not always clear whether a strategic lead is being taken on this issue by the local authority or any other body.
Impact on the private rented sector 17. The DWP’s own ongoing research into the impact of the changes on the private rented sector concludes that at this stage it is too early to identify clear impacts and trends outwith the London area.2 However, ad hoc evidence suggests that limiting LHA has not had the intended effect of bringing down rents at the lower end of the market. 18. The extension of the “shared accommodation rate” to people under 35 has had a particular impact on local authorities’ ability to house people into the private rented sector under their homelessness duties. People under 35 receive only enough LHA to cover the cost of a room in a shared house, meaning that councils are severely constrained in their ability to use the private rented sector to fulfil their duty to provide self-contained housing. Prior to the changes, the private rented sector was becoming an increasingly significant element in the options open to councils to meet their homelessness duties, so the closing of this door is a graphic illustration of the clash between Westminster welfare policy and Holyrood housing policy.
Mitigation: what powers do the Scottish Government, councils, social landlords and others have to mitigate the impact of the reforms, and are these being used effectively? 19. The Scottish administration has only limited powers to mitigate the impact of the welfare changes, and CIH Scotland believes these powers are being used effectively. 20. The Scottish Government’s approach to council tax, which is now devolved, is an important example. Its agreement with COSLA, currently for 2013–14 only, to plug the funding gap created when council tax was devolved, has ensured Council Tax Benefit levels can be maintained. Furthermore, unlike the position in England, there is to be a consistent, Scotland-wide approach to setting the taper for Council Tax Benefit at 20p in the pound—this contrasts with what we understand could be a taper of up to 40p in parts of England— something that will wipe out the benefits of the advantages of the combined Universal Credit taper aimed at making it pay for people to take up work. 21. There have been some suggestions that the Scottish Government should take radical steps to “rescue” tenants and landlords from the impact of the reforms and, in particular, of the under occupation deduction—at an annual cost of around £50 million. Apart from our understanding that such action may be beyond the Scottish Government’s powers, it would seem to set a dangerous precedent for funding to be used in this way, and in any event raises the issue that whilst the under occupation deduction has attracted most public and media attention, others—such as private tenants under the age of 35—have also been badly hit by the changes and their case for being financially supported is every bit as strong. 22. The Scottish Government does have powers in relation to advice and information provision, and supporting the housing sector to prepare for the changes, and it has acted on both counts. The recent announcement that £5.1 million of Scottish Government money, supplemented by £2.35 million from the Money Advice Service, is to go into a Making Advice Work programme, partly aimed at social landlords, is a good example of the proactive approach being taken on mitigation activity. 23. The Scottish Government is also funding a range of housing organisations to undertake activities which support social landlords to prepare for and implement the changes. CIH Scotland has received financial support to prepare practical guidance and offer Scotland-wide briefing sessions for social landlords and other housing providers: — In November 2013 we produced Preparing for the Bedroom Tax and Beyond: http://www.cih.org/resources/PDF/Scotland%20Policy%20Pdfs/Bedroom%20Tax/CIH_ Bedroomtax_e.pdf — In May 2013 we produced a short document—Reclassifying property size to avoid the bedroom tax—frequently asked questions: http://www.cih.org/resources/PDF/Scotland%20Policy%20Pdfs/Bedroom%20Tax/ Reclassifying%20property%20size%20-%20FAQs%20May%202013.pdf — As noted previously, we are currently finalising guidance on rent payment and collection under Universal Credit. 24. Local authorities have a range of different roles in relation to the welfare changes. Most (26 out of 32) are landlords and so will be involved in the same preparation/implementation issues as registered social landlords. All councils have a revenues and benefits function currently administering Housing Benefit, Local 2 http://research.dwp.gov.uk/asd/asd5/report_abstracts/rr_abstracts/rra_838.asp cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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Housing Allowance and Council Tax Benefit, but with a diminishing role in relation to the first two of these in the coming years. 25. All councils have a strategic role in terms of wider welfare reform issues such as promoting financial capability and digital inclusion. An example of what this can mean in practice is where a local authority brokers an arrangement with a local credit union to launch a suitable bank account, enabling local housing associations too to make the account available to their tenants. 26. In CIH Scotland’s view, welfare reform mitigation groups set up by local authorities should as a matter of course involve all local registered social landlords (housing associations) and be multi-agency, for example including the public health dimension. 27. Our colleagues at COSLA will doubtless want to appraise the Committee on the issues and challenges for councils as they implement and prepare for further welfare changes. 28. With more than 150 housing associations in Scotland, varying in size from a few hundred houses to over 40,000, levels of preparedness for the welfare changes will inevitably vary. For most or all associations, a key component of their preparations will have been an intensive programme of visits, initially to tenants likely to be affected by the under occupation deduction. We know too that some associations have been particularly proactive in brokering arrangements with providers of suitable bank accounts and in broader activity such as promoting employability initiatives to help tenants be more resilient to the welfare changes. Again our colleagues at the Scottish Federation of Housing Associations will be able to comment in more detail on how their member associations are progressing preparations for the changes. 29. The direct and indirect costs to landlords of strengthening the operational front line to deliver advice and information (which can at best only seek to limit the damage to rental income) has yet to be fully assessed. 30. What is not in doubt is the significant organisational and cultural shift brought about by the new welfare system under Universal Credit—one which requires landlords to adapt to at almost every level of their business. This is a message CIH Scotland is seeking to promote to social landlords at every opportunity.
Conclusion 31. In many ways it is a strange time for housing providers. Whilst the press remains full of reports of local and national bodies heavily criticising aspects of the reforms—particularly the under occupation deduction— council and housing association landlords must steer a route through what can sometimes be political posturing and find the most sensitive means of implementing the changes in such a way as to protect rental income as far as possible. This in turn will help ensure that high quality services can continue to be provided to tenants and other customers. 32. The distractions will doubtless continue. The UK political parties will be looking at what changes they would make were they to gain power in 2015, whilst in Scotland there will inevitably be claims about how things would or would not be different under independence or greater fiscal powers. A key role for bodies such as CIH Scotland is to help the housing sector maintain a clear focus on practical implementation issues, not least as the advent of Universal Credit approaches. May 2013
Written evidence submitted by the Scottish Federation of Housing Associations 1. WhoWeAre 1.1 This submission has been prepared by the Scottish Federation of Housing Associations (SFHA), the national representative body for Scotland’s housing associations and co-operatives. 1.2 This submission has been informed by: — a national survey of Scottish housing associations and co-operatives;3 — discussions with individual housing associations and co-operatives; and — a report commissioned by SFHA on the financial impacts of welfare reform on housing associations and co-operatives in Scotland.4
2. Summary 2.1 Housing associations and housing co-operatives are part in the social fabric of Scotland. They are often the main agency connecting people with social and welfare services, giving them a significant role in the effective delivery of these services. 3 SFHA (February 2013) Preparing for Welfare Reform in 2013. Available to download from http://www.sfha.co.uk/sfha/welfare- reform/welfare-reform-research-and-publications/menu-id-311.html (accessed 3 June 2013) 4 is4 (August 2012) for SFHA, The Impact of Welfare Reform on Housing Associations and Housing Co-operatives in Scotland. Available at http://www.sfha.co.uk/sfha/welfare-reform/welfare-reform-research-and-publications/menu-id-311.html (accessed 3 June 2013) cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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2.2 Many of the mechanisms of welfare reform—including monthly payment, on-line claiming and “direct payment”, have to be realised through the actions of social landlords. 2.3 The social role of housing associations is fundamental to their activity. However, this role is not recognised sufficiently in the allocation of resources targeted at awareness raising around welfare reform. 2.4 Housing Benefit is a very significant revenue stream for a large number of housing associations. The amount and certainty of this revenue stream is under severe threat as a consequence of recent and forthcoming changes to Housing Benefit. This is of serious concern not only to housing associations but also to private lenders. Stable revenue streams are critical to housing associations’ ability to maintain existing stock and to repay loans for new supply and improvements to existing stock. 2.5 The scale of the wider welfare reforms indicates significant direct financial risks for landlords. The estimated reductions in tenants’ benefit income is critically important to social landlords because a tenant’s propensity to pay their rent on time is sensitive to overall levels of household income, not just Housing Benefit income. The transition to direct payments for those who have limited experience of budgeting may lead to their spending rent money on other perceived priorities. 2.6 The SFHA views the under-occupancy restrictions as unfair and incompetent, not least due to the structural mismatch between the profile of stock and households. Put simply, there are not enough smaller homes. There are also homes where there has been good reason to allow under occupation, as in the case of adapted homes and high rise flats. 2.7 Leaving aside all of the other welfare reforms, Scotland’s social landlords face the prospect of having to collect an additional £51.7 million per year from tenants as a result of the under occupation restrictions, a sum that was previously covered by Housing Benefit. 2.8 Changes in the UK benefit system consequently have serious implications for devolved housing and wider social policies.
3. Scottish Social Landlords and the Benefits System 3.1 Scottish housing associations and co-operatives have had, and continue to have, primary focus on the two major benefit changes affecting social tenants in 2013–14, namely the under-occupation restriction and the transition to direct monthly payments to tenants under Universal Credit. SFHA’s recent survey shows that housing associations across Scotland have made substantial efforts to ensure their tenants are supported through these changes to their benefits, and that they are taking action to mitigate and prevent the worst impacts of the welfare cuts: 3.2 There are significant differences between the housing markets in Scotland and England. For example, Scotland does not have anything to compare with the extraordinary London housing market, whose conditions have distorted policy for the UK as a whole. Scotland has significant numbers of homes in isolated, excluded locations, which require high levels of maintenance and support, often with high fuel costs and limited communications. Social landlords are often the key agency working in a local area providing facilities, support and connections with other services or, as one housing provider put it, “the lynchpin of the local community”. 3.3 Scotland’s rural housing associations face particular challenges in preparing for welfare reform compared to organisations operating in more urban areas.5 The remote areas of Scotland generally have a high level of digital exclusion, fewer social services and employment opportunities. Scotland’s rural housing associations have a much lower proportion of smaller properties to facilitate downsizing. Despite these challenges, they are taking similar actions to their urban counterparts to mitigate the worst impacts of welfare reform and to ensure their tenants are as prepared as possible for the benefit changes. 3.4 The housing association sector plays a major part in delivering services to people on low incomes. Most housing association tenants rely on Housing Benefit for paying rent and, conversely, most housing associations depend on Housing Benefit for their rental income. The figures from the SFHA survey highlight the importance of Housing Benefit for both housing associations and their tenants: — 58% of all HA tenants claim Housing Benefit, full or partial; — for most HAs (82%), at least half of their tenants rely on Housing Benefit to pay rent; and — 93% of HAs projected rent arrears to increase in 2013–14, despite just 30% reporting rent arrears increasing over the previous financial year.6 3.5 80% of housing associations in Scotland are now offering welfare advice; 73% are offering debt counselling or money advice. Both figures have increased markedly in the last year because of the programme of welfare reform.7 5 SFHA (February 2013), Preparing for Welfare Reform in 2013: Rural Housing Associations. Available at http://www.sfha.co.uk/ sfha/welfare-reform/welfare-reform-research-and-publications/menu-id-311.html (accessed 3 June 2013) 6 SFHA (February 2013), Preparing for Welfare Reform, p.6. Available at Available at http://www.sfha.co.uk/sfha/welfare-reform/ welfare-reform-research-and-publications/menu-id-311.html (accessed 3 June 2013) 7 SFHA (February 2013), Preparing for Welfare Reform, p.5. Available at Available at http://www.sfha.co.uk/sfha/welfare-reform/ welfare-reform-research-and-publications/menu-id-311.html (accessed 3rd June 2013) cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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3.6 There are acute concerns about many of the welfare reforms going through. Nearly all of the housing associations and co-operatives in Scotland have either recently undertaken assessments of the impact on their tenants, or are in the process of doing so. 3.7 In addition to Housing Benefit changes, tenants in our sector have been affected by the widespread application of increased sanctions on claimants and the reassessment of disability. 3.8 Although the numbers of tenants in our sector likely to be affected by the forthcoming household benefit cap are low, the individual reductions in income will be significant, at an average of £66–£93 a week. Larger households with children will be most at risk of this measure so child poverty may worsen.8 3.9 The essential supportive role of social landlords has not been recognised in the context of welfare reform, despite sustained lobbying throughout the passage of the relevant legislation and regulations. The impact of successive changes has been to increase the weight of responsibility experienced by organisations which are not financed directly to undertake the tasks. Housing associations are increasing their support to tenants impacted by welfare reform at the same time as their main revenue stream (rental income) is reducing as a consequence of the same reforms. 3.10 The UK Government’s subsidy to social housing tenants is critical to the provision of affordable social housing in Scotland. The is4 reportestimates that the current round of reforms could reduce the sector’s annual income (or increase its costs) by up to £79 million, equivalent to 8.4% of the sector’s current rental income.9 The costs, and the uncertainty, are of concern to lenders, who will consequently view our sector as higher risk. This will have an adverse impact on the availability and price of future loans. This means that the cost of providing social housing is set to increase at the same time as the sector’s resources are reducing. 3.11 SFHA has been conducting a survey to establish housing associations’ early experience of the impact of the under occupations restrictions on Housing Benefit that commenced on 1 April 2013. The results will be published shortly but we can share with the Committee that the majority of Scottish housing associations are projecting rent arrears to increase during 2013–14 to around 5–6% of rental income. During 2011–12, rent arrears for our sector averaged around 3–4%.
Figure 1 ARREARS AS A% OF RENTAL INCOME, 2011–12 (ACTUAL) AND 2013–14 (PROJECTED)
3.12 Social landlords work in partnership with other agencies, including close liaison with local authorities providing Housing Benefit. Current arrangements make it possible for housing providers to share data relating to benefit applications, in order to ensure accurate and speedy processing. Housing associations do not have the same relationship with DWP and there is concern that this will create very serious delays in payments and confusion for tenants once Universal Credit begins to roll out. There is also concern that these delays and 8 Mandy Littlewood Social Research and Consulting for SFHA, (May 2011), The impact of proposed Welfare Reform on HA/ Co-op Tenants, p.ii. Available at http://www.sfha.co.uk/sfha/welfare-reform/welfare-reform-research-and-publications/menu-id- 311.html (accessed 3 June 2013). 9 is4 (August 2012) for SFHA, The Impact of Welfare Reform on Housing Associations and Housing Co-operatives in Scotland. Available at http://www.sfha.co.uk/sfha/welfare-reform/welfare-reform-research-and-publications/menu-id-311.html (accessed 3 June 2013) cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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confusion will be exacerbated for those whose employment status fluctuates as a result of being on a zero hours contract, or in seasonal work.
3.13 The move to “direct payments”, which now means the opposite of what that term has meant for forty years, is causing considerable concern. “Direct payment” now means payment of housing costs to the tenant, instead of directly to the landlord. In many cases, at least a third of claimants of working age, reductions and caps mean that the amount that will be payable will also be significantly less than the rent. The indications from the direct payment demonstration projects are that rent arrears are expected to increase.10
3.14 In the transition to Universal Credit, many households will face multiple benefit reductions and will suddenly find themselves in serious financial difficulty.
3.15 The move to monthly payment of benefits is also a significant concern. Landlords will have to manage payment periods that are different for every claimant, in the absence of any information about entitlements or payment dates. The payment of benefits will be made on a day each month that relates to the anniversary of the initial claim. This will vary for every claimant. This will mean that no external party can know when or how much a recipient can expect. This is quite unlike the situation either of existing benefit claimants or of most people in work. It will mean that social landlords can only offer support to tenants in receipt of Universal Credit on a personalised basis, increasing housing management costs considerably.
3.16 Many tenants are excluded financially. Some have no bank account and of these, many will not be permitted to open a suitable account. Where tenants do have bank accounts but have low incomes, the potential to accrue bank charges for missed payments is high. These charges can spiral out of control very quickly. In the process of negotiating with banks for improved financial inclusion for their tenants, housing associations report, that financial providers expect housing associations to pay generously for the privilege.
3.17 The Universal Credit framework relies heavily on claimants having digital access. One major housing provider tells us that less than half of its tenants have access to the internet. The percentage of digital exclusion increases in more remote areas of Scotland.
4. Under Occupancy Restrictions—“The Bedroom Tax”
4.1 We anticipate growing difficulties relating to the under-occupancy restrictions, which will reduce the benefits and ability to pay of many tenants. In common with other housing bodies across the UK, the SFHA opposed and lobbied against these proposals as we feel they are unfair and incompetent, not least due to the structural mismatch between the profile of stock and households which means there simply are not enough smaller homes. Housing associations and co-operatives are being proactive to help people under occupying properties find a smaller property to rent. But the fact remains that there is a shortage of smaller properties available for them to move into.
4.2 It is our view that the restrictions will adversely affect many tenants who are not under-occupying by any reasonable test. While 81% of housing associations in Scotland are offering support for tenants who wish to downsize, and 29% of associations have changed their allocation policies, the combination of the limited range of available housing stock and the needs of single applicants means that the situation cannot be mitigated adequately by different allocations of the housing stock. The affected tenants have been telling their landlords that they will do what they can to avoid having to move. Given all of this, this particular reform is, simply, a benefit cut.
4.3 While housing associations and co-operatives are proactive in doing all that they can to help people under occupying properties who can move11 to find a smaller property to rent, the Scottish Government’s own impact assessment12 estimates that there are 12,572 one bedroom properties available for let by housing associations and co-operatives in a year, with a further 13,269 two bedroom properties available. Leaving aside any other allocations considerations this falls well short of what would be required to relocate the: — 75,800 households under occupying by one bedroom and subject to a 14% reduction in support (£9 per week on average in Scotland); and — 19,600 households under occupying by two or more bedrooms and subject to a 25% reduction in support (£16 per week on average in Scotland). (See also Figures2&3) 10 DWP Direct Payments Demonstration Projects: Learning the lessons, six months in (May 2013). Available at http://research.dwp.gov.uk/asd/asd5/summ2013–2014/839summ.pdf (accessed 3 June 2013) 11 In many cases, tenants deemed to be under occupying cannot reasonably be expected to move, eg, where they rely on a social support network or where their property has been adapted. 12 Scottish Government (2011), Housing Benefit changes: Scottish Impact Assessment. Available at http://www.scotland.gov.uk/ Topics/Built-Environment/Housing/supply-demand/chma/marketcontextmaterials/hbchangesscottishimpact/ (accessed 21 May 2013) cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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Figure 2 HOUSING ASSOCIATION STOCK BY BEDROOM SIZE
4 or more Bedsit Bedrooms 3% 3%
3 Bedroom 1 Bedroom 22% 26%
2 Bedroom 45%
Figure 3 TURNOVER RATES AS A% OF HA STOCK AND ANNUAL LETS BY BEDROOM SIZE 50% 45% % of stock 40% 35% % of lets
30%
20% 15% Properties (%) 12% 12% 9% 10% 9% 4% 6% 4% 2% 0%
Bedsit 1 Bedroom 2 Bedroom 3 Bedroom 4 or more Total Bedrooms Turnover
Property Size
5. Financial Impacts of Welfare Reform 5.1 As referred to above, the SFHA commissioned an independent examination of the potential direct and indirect financial impacts of welfare reform on housing associations and co-operatives in Scotland. The report was published in August 2012.13 5.2 The analysis suggests that the various welfare reforms will result in a total loss of benefit income for working age tenants in the social rented sector of up to £228 million by 2017. Around £33.5 million of this is related to Housing Benefit reform. Working age households will face further significant pressure as a result of 13 i.s.4 (August 2012) for SFHA, The Impact of Welfare Reform on Housing Associations and Housing Co-operatives in Scotland. Available at http://www.sfha.co.uk/sfha/welfare-reform/welfare-reform-research-and-publications/menu-id-311.html (accessed 17 May 2013) cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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the reform of other working age benefits and (as was proposed at the time of the Report) the uprating of benefits using CPI rather than RPI. Since then, the UK Government has decided to cap annual increases in benefits at 1%.
5.3 The estimated reduction in tenants’ benefit income to tenants is critically important to social landlords because a tenant’s propensity to pay their rent on time is sensitive to overall levels of household income, not just Housing Benefit income. As other essential costs rise, eg food and fuel, tenants on low incomes will face sever financial hardship.
5.4 Transitional protection may assist some households for a short period of time, but will not alleviate the long term financial pressure on tenants and ultimately on landlords. SFHA will be publishing details of Scottish housing associations’ recent experience of Discretionary Housing Payments shortly and will forward this to the Committee.
5.5 The scale of the welfare reforms have significant direct financial risks for landlords including: — Rent loss as a result of increased arrears and bad debts. Most organisations anticipate increased rent arrears as a result of the various welfare reforms.14 — Slower and costlier cash collection as a result of direct payment of benefit to tenants, as outlined at Figure 1. — An increase in cost of between £11.902 million and £12.676 million, depending on whether financing costs are required, and arising as a result of increased housing management activity associated with increased terminations, arrears, allocations and void property management.
5.6 Unless these increased costs and reduced revenue income levels can be alleviated for landlords, the result will be poorer financial performance across the sector. This may cause issues for some landlords, particularly being able to meet business plan commitments (including stock improvements and new homes) and existing loan covenants to lenders.
5.7 As well as the direct financial issues associated with welfare reform, there are a number of additional indirect impacts which are likely to involve financial consequences for our members. These can be considered in two key categories: — The extent to which welfare reform detracts from the delivery of housing associations’ business, financial and performance targets. This will be very specific to each landlord and their particular circumstances. — Their ability to deliver the Scottish Government’s broader housing and housing related policy objectives, including new housing supply and the prevention/reduction of homelessness.
6. Housing Policy & Welfare Reform
6.1 Scottish housing providers and other professionals work together to meet tenants’ needs within the context of a flawed housing system. Direct subsidies to the providers of new social housing in Scotland are governed by devolved powers. But the subsidies to Scottish social housing tenants are controlled by powers reserved to Westminster. The lack of co-ordination, or even of consideration of the effects on the housing sector, has been a major obstacle to the construction of a coherent housing policy.
6.2 The housing sector relies on sources of funding which are consistent, predictable and long-term. Housing is not a flexible service; it has to be planned, developed, and delivered over years. It cannot be “spot purchased” when it is in short supply or ordered “just in time”. Our members are continually emphasising the importance of continuity and certainty. The evolving welfare reform agenda undermines this significantly.
7. Concluding Comments
7.1 SFHA urges the Scottish Affairs Committee to recognise the extent of the impact of the UK Government’s welfare reforms on the lives of social tenants and the businesses of social landlords in Scotland.
7.2 We call for the repeal of the Housing Benefit under occupation restrictions as a matter of urgency.
7.3 We have yet to see our sector’s and our lenders’ concerns about the impact of the forthcoming universal credit regime being addressed satisfactorily. The financial stability of Scottish housing associations remains under threat as a consequence of this. June 2013
14 SFHA (February 2013), Preparing For Welfare Reform. Available at http://www.sfha.co.uk/sfha/welfare-reform/welfare-reform- research-and-publications/menu-id-311.html (accessed 17 May 2013) cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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Further written evidence submitted by the Scottish Federation of Housing Associations Thank you once again for inviting SFHA to give oral evidence to SAC hearing on 11 June 2013 on The impact of the Bedroom Tax & other changes to housing benefit in Scotland. We appreciate the opportunity to provide additional information. I committed us to providing further information on various matters which were raised during the hearing. We sent some of the information during the week following the hearing and this letter provides the rest of the information, and more which has become available since and is highly relevant to the Committee’s enquiry. If you require anything further please let us know. 1. We promised to confirm the precise nature of the existing exceptions to the under occupation restrictions. These are included at Annex 1. 2. The hearing sought clarification of evidence about the numbers of tenants under occupying and in receipt of benefit (Question 45 in the transcript). We promised to clarify this point and I can confirm that the figures on under-occupation have been revised by the Scottish Government.15At end May 2013 there were around 82,500 households in Scotland facing reduction in their Housing Benefit eligibility because they were assessed as under-occupying their property. Just over half are council tenants (47,500) and just under half (35,000) are tenants of housing associations or cooperatives. Of the total: — around 68,500 were under-occupying by one bedroom (83%); and — around 14,000 were under-occupying by two or more bedrooms (17%). 3. We promised to clarify the wording of the Minister for Housing and Welfare’s letter to Scottish social landlords in respect of their eviction policies, as referred to in Question 70 of the transcript. Please find the letter attached. 4. I promised to provide the Committee with our Briefing Paper “Housing Benefit Spending: Busting The Myths”. We sent a copy on 17th June but for convenience a further copy is also attached and shows very clearly more people being housed in the private sector and the rising cost of Housing Benefit due to higher rents in the private sector with separate analysis of Scotland within Great Britain. 5. You will be aware that we called for further UK Government funding for Discretionary Housing Payments and I acknowledge that more has been made available as of yesterday. The figure for Scotland was £10 million and we understand that to have increased in Scotland but not yet by exactly how much and even if it was double it would still be insufficient. 6. The Scottish Affairs Committee asked for evidence of impacts and I made the point in early June that it was rather early to tell. We have been in dialogue with the Scottish Housing Regulator about their plans to collect information about impacts of welfare cuts on arrears of associations and cooperatives across Scotland. We understand that preliminary results will be available by the end of August. 7. Meantime, piecemeal information is coming to light and being shared with the DWP, the Scotland Office and the UK Cabinet office about experience from the first three months of the policy coming into effect. This show spikes in additional arrears already running to tens of thousands of pounds even in medium sized landlords, and hundreds of thousands for larger landlords. As stated in our evidence, the problems of finding smaller properties for people to move to remain significant. The SG paper (above) points to approximately 60,000 requiring one bedroom properties but only 20,000 such properties become available for social let each year for which there is competition from other applicants. I also attach recent evidence from GHA in the Wheatley group which shows that that they managed to re-house merely 18 households in smaller properties of which only some were affected by the “bedroom tax”. The Committee’s questions examined whether the “bedroom tax” is a problem of principle or a problem of implementation. Since your hearings in June, we have been investigating the value of the penalty which arises through the restriction for under-occupation, compared with the value of actual differentials between different sizes of property. We have compared rents for councils and housing associations in Scotland with those in England which may have been used as the basis for establishing the scale of the restrictions. The differentials (of 14% and 25%) seem to be based on a centralised rent structure for England which neither applies nor exists in Scotland under an explicitly devolved area of policy on housing. I attach an annex which shows the extent of the resulting overcharge to tenants “under-occupying” in Scotland. If subsidy is to be removed for “spare” rooms for tenants in social housing, the deduction should reflect the actual cost of the spare room. This data shows it does for England, but Scotland households are being overcharged in the spare room subsidy formula. This emphasises that the design of the policy is inappropriate in principle for social housing tenants in Scotland. I referred in my evidence to the particular challenges facing tenants and landlords in rural and remote communities. I understand you are taking steps to follow this up with some of our members operating in such areas. I therefore commend to the Committee research published after your hearings in June. The Full Report as well as the Summary and Key Findings from research about a Remote Rural Minimum Income Standard for 15 http://www.scotland.gov.uk/Topics/Built-Environment/Housing/supply-demand/chma/Benefitchanges cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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Scotland are attached, along with the presentation made at the launch of the research. I would highlight the finding that “Social security benefits do not cover the cost of living in remote rural Scotland ... For working age people without children they cover only a third and for families with children, they get about a half of what they need. The minimum wage only produces about two thirds of a minimum income for a single person living in remote rural Scotland. For an adequate income, a single person needs to earn about 90% of the median, whereas in urban parts of the country, someone on two thirds average earnings has enough.” The presentation illustrates the relative levels of Income Support, Minimum Wage and Average Earnings compared to the Minimum Income Standard required for a single adult to live in an English urban area, a Scottish Highland town and a Scottish remote island settlement, and the high costs of energy in rural settlements. Members in urban areas have also undertaken surveys and in particular Queens Cross HA in Glasgow has published an extensive report Getting to Know You, profiling its population relative to the Scottish average. It paints a stark picture of poverty and inequality in inner city Glasgow, which stands to get worse as a result of changes to welfare including the bedroom tax. I would like to conclude by reiterating that repeal of the under-occupation restrictions would address the problems we are outlining. And DHP allocations, even with a recent increase, are insufficient to close the gap creating distress. In the short term, the key areas where change is required are around: — Further exceptions relating to under occupancy for disabled adults, kinship carers, households under occupying by only one bedroom. I attach a letter sent by COSLA to David Mundell MP on this subject on 27 March 2013, which COSLA seeks “case specific easements” for adults with disabilities or other long term conditions who either cannot share a bedroom or have fluctuating needs often requiring an additional bedroom for sleepover support, and for separated parents whose children regularly sleepover, as well as for relatives who care for children to allow parents access to work. — Relaxation or transitional protection for people who want to and cannot move because there is no alternative accommodation. This would involve applying the “grandfathering” principle (ie no retrospective application of the restrictions) with a transition period of say three years, which would lapse if a suitable offer was made and refused. — Recognition that the restriction should not be greater than the actual rent differential given the overcharge to tenants in Scotland due to the difference between the scale of restrictions and the value of actual differentials. We are following the further deliberations of the Committee with interest and I very much look forward to seeing what the Committee will do to address the very significant and immediate challenges to a key area of social policy in Scotland. July 2013
Annex 1 SOCIAL SECTOR CRITERIA AND EXCEPTIONS The size criteria allow one bedroom for each person or couple living as part of the household, with the following exceptions according to DWP: — Children under 16 of the same gender are expected to share; — Children under 10 are expected to share regardless of gender; — A disabled tenant or partner who needs a non-resident overnight carer is allowed an extra room; — Foster carers are allowed one additional room, so long as they have fostered a child or become an approved foster carer within the last 52 weeks; — Parents with adult children in the armed forces (or reservists) who normally live with them will be able to retain the bedroom for that adult child when they are deployed on operations; — Guidance was also sent to local authorities on 12 March 2013 to confirm that they should follow case law (Burnip/Gorry/Trengo ve) and allow a room for a disabled child who is unable to share a bedroom.16
16 Source: DWP (March 2013), http://www.dwp.gov.uk/adviser/updates/size-criteria-social-rented/(accessed 18 June 2013) cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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Annex 2
ANALYSIS OF ACTUAL RENT DIFFERENTIALS COMPARED WITH UNDER OCCUPATION RESTRICTIONS
4 £68 £81 £110 £120 bedrooms
3 £6 £3 5% 9% 3% -8% 14% 11% 14% 28% 14% -£16 22% 14% -£10 -14% 4 bedsto
2 £9 £4 £3 4% 3% 12% 25% 13% 21% 25% 36% 25% -£13 22% 25% -11% 4 bedsto
1 £3 £3 5% -£3 3% -4% 20% 25% 29% 25% 44% 25% -£21 22% 25% -19% 4 bedsto
3 £64 £72 £79 £93 bedrooms
2 £5 £2 £2 £1 7% 7% 3% 3% 1% 14% 11% 14% 11% 14% 13% 14% 3 bedsto
1 £6 £4 £3 £1 5% 4% 1% 15% 25% 10% 20% 25% 21% 25% 24% 25% 3 bedsto
2 £60 £64 £70 £81 bedrooms
1 £3 £3 £2 £1 9% 5% 4% 3% 1% 14% 10% 14% 11% 14% 13% 14% 2 bedsto
1 £54 £58 £62 £71 bedrooms
Table1: Differentialsbetween weekly rents by numberof bedrooms: 2011-12 Scotland LA avg rent charge Value of penaltyset by DWP of Extent 'overcharge' £ of per Value 'overcharge' week Scotland RSL avg rent charge Value of penaltyset by DWP Extent of 'overcharge' £ of per Value 'overcharge' week England LA avg rent charge Value of penaltyset by DWP Extent of 'overcharge' £ of per Value 'overcharge' week England RSL avg rent charge Value of penaltyset by DWP Extent of 'overcharge' £ of per Value 'overcharge' week cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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Source: Social housing lettings and sales in England, 2011–12: Continuous Recording (CORE) data Source: Chartered institute of public finance and accountancy (CiPFA) annual survey of Scottish Local Authorities 2011–12 Source: Scottish Housing Regulator, APSR 2011–12
Chart 1 EXTENT OF OVERCHARGE TO TENANTS OF SOCIAL LANDLORDS IN SCOTLAND AND ENGLAND
15% 13%
10% 10% 9% 7% 5% 5% 5% 4% 5% 4% 4% 3% 3% 3% 3% 3% 3% 1% 1% 1% 0%
Scotland LA -5% -4% Scotland RSL -10% -8% England LA -11% -15% England RSL -14%
-20% -19%
-25% 2 beds to 1 3 beds to 1 3 beds to 2 4 beds to 1 4 beds to 2 4 beds to 3 cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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Chart 2 VALUE OF OVERCHARGE TO TENANTS OF SOCIAL LANDLORDS IN SCOTLAND AND ENGLAND £15
£10 £9
£6 £6 £5 £5 £4 £3 £4 £5 £3 £3 £3 £3 £4 £3 £2 £2 £1 £1 1% £0
-£5 -£3 Scotland LA Scotland RSL -£10 £10 England LA £13 -£15 England RSL -£16
-£20 -£21
-£25 2 beds to 1 3 beds to 1 3 beds to 2 4 beds to 1 4 beds to 2 4 beds to 3
Written evidence submitted by Capability Scotland Capability Scotland campaigns with, and provides education, employment and care services, for disabled people across Scotland.
Summary — Capability Scotland is concerned about the devastating impact the bedroom tax will have on disabled people and their families in Scotland. Our own independently commissioned research has shown that 24% of disabled people in Scotland will see their Housing Benefit cut as a result of the policy despite their “extra” room being essential for a purpose related to their disability. — Our research also shows that, due to a lack of supply of accessible and suitable housing, the majority of disabled people affected will be unable to move to a smaller property. Given that there is a shortfall of 17,042 wheelchair accessible housing in Scotland, and that none of Scotland’s local authorities have an adequate supply of one bedroom homes to meet demand, disabled people are being put in an impossible—and highly stressful—situation. — As a provider of specialist housing and support for disabled people Capability Scotland also has serious concerns about the narrow scope of exemptions for those in supported accommodation. We believe the current provisions will discriminate against those disabled people who choose to receive their housing and support from separate suppliers. This is contrary to the UK Government’s apparent commitment to independent living and personalisation. — Capability Scotland is also extremely disappointed that the UK Government has failed to amend regulations to reflect the Court of Appeal’s findings that severely disabled children should not be forced to share a bedroom with their siblings. This has resulted in an unacceptable lack of clarity for both local authorities and disabled households.
Our Response 1. The Chartered Institute of Housing in Scotland’s figures show that disabled people will be worst affected by the bedroom tax. Of around 95,000 households in Scotland deemed to be under-occupying social rented housing,17 approximately two thirds contain a disabled person. Given the lack of small, accessible homes in Scotland disabled people are being put in an impossible situation, presented with a choice between poverty and unsuitable housing. 17 Preparing for the Bedroom Tax and Beyond, CIH, October 2012 http://www.cih.org cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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2. Freedom of Information research has found that none of Scotland’s 32 local authorities can guarantee they have enough one bedroom properties available to meet the demand which being created by the bedroom tax. In Aberdeenshire, for instance, 703 tenants are considered to have one extra bedroom but there were only 86 single-bedroom properties available for rent in the social rented sector.18 This lack of supply is compounded for disabled people given that one in five disabled people already live in a house that is “not at all” or “not very suitable” to their needs.19 The estimate of the number of wheelchair user households in Scotland with unmet housing needs is 17,042.20 Many disabled people literally have nowhere to go to avoid the bedroom tax.
3. Furthermore, many disabled people would be unable to live in a home with fewer bedrooms, despite being told their homes are too big for them. 23% of the 88 disabled people we surveyed believe their “extra” room is essential for a purpose related to their disability.21 The households most likely to be in this situation are couples who need to sleep in separate rooms as a result of the symptoms of a disability. Examples given included people who needed to sleep alone because of constant spasms, incontinence and extreme restlessness. We would urge the Government to review this policy, particularly given the Court of Appeal’s findings in the Gorry case.22 In that case the Court held that that forcing disabled children to share a room with a sibling despite the resulting disruption to sleep constituted disability discrimination under the Equality Act 2010. We believe this creates powerful precedent for a similar situation involving an adult couple.
4. Other households who stated the need for an extra room in our research included those who require extra space to store bulky disability related equipment (26%). Examples given by respondents included needing extra room for a powered wheelchair, hoist, walker and/or frame.
5. Our survey findings also highlighted that money spent on existing aids and adaptations could go to waste as a result of the scheme. 84% of respondents said their current home had been specially adapted to meet their needs. Adaptations included a wet floor shower room, a track and hoist system and an automated toilet. While some of these households might receive Discretionary Housing Payments because their home has is classed as having “significant adaptations”, many using more minor aids and adaptations will not fall into this category. This means disabled individuals, Registered Social Landlords and local authorities will have fund for new rails, ramps, adapted doors and toilet appliances when claimants are forced to move to smaller homes.
6. The impact on those unable or unwilling to find appropriate, smaller accommodation is even more worrying. Of the 88 disabled people we questioned, only 87% thought it was realistic for them to move to a smaller home. Reasons for this included the shortage of adapted homes (66%), the shortage of smaller homes (31%) and the fact that people had had difficulty finding suitable accommodation in the past (27%).
7. Many respondents (46%) said they would be likely to remain in their current home despite a decrease in their income as a result of the bedroom tax. When asked about the impact such a decrease in income would have on their lives, 76% respondents told us they would be forced to cut down on basic household costs. Of this group, most would have to make cuts to heating (80%), food (60%) and clothing bills (51%). Comments included the following: “These changes may affect my health and I do not want to go into hospital. I rely totally on my family and they may have to leave me or the area if further income for the house is required.” “I’m worried because at the moment it’s a question of eat or heat. Heating for our house takes up a large portion of our benefits and then there are all the other bills to pay.” “It is a matter of paying your bills, keeping a roof over your head and just living. We already do very little other than breathe, eat and survive.”
Supported Exempt Accommodation
8. Capability Scotland provides a range of services for disabled people across Scotland including supported housing and community living services. We are concerned that the current, narrow definition of supported exempt accommodation used to exclude certain households from the bedroom tax will have a seriously detrimental effect on disabled people across Scotland.
9. Currently, supported accommodation is only exempt from the bedroom tax where the provider of the accommodation (or their agent) also provides the individual’s care, support or supervision. There is an urgent need to consider the position of those people who receive care, support or supervision in their home from an organisation other than their landlord or its managing agent. This includes many disabled individuals who receive support from their local authority, a voluntary sector organisation or a private company. 18 Scottish Television Freedom of Information Research; “Thousands in Scotland have no hope of avoiding the Bedroom Tax”, 11 April 2013 http://local.stv.tv/edinburgh/magazine/221071-bedroom-tax-numbers-show-lack-of-one-bed-council-houses-in- scotland/ 19 Combined data from the 2005–06, 2007 and 2008 Scottish House Condition Surveys (SCHS) 20 Mind the Step: An estimation of Housing Demand Amongst Wheelchair Users in Scotland, Horizon Housing, January 2013 http://www.horizonhousing.org/documents/website/pdfs/J13778%20Mind%20the%20Step.pdf 21 Capability Scotland Survey into Housing Benefit, May 2013,Conducted by Scotinform. 22 Gorry v SSWP [2012] EWCA Civ 629 cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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10. The UK Government’s own research23 suggests that there has been an increased tendency to separate out the contracting of housing on one hand and care on the other. Indeed, it is increasingly the case that while a landlord might provide housing management, the local authority (or the supported individual themselves) will contract with a different organisation to provide the care, support or supervision. This trend is likely to continue at pace in Scotland given the recent passage of the Social Work (Self Directed Support) (Scotland) Act 2013, which will give disabled individuals increased choice and control over the way in which services are delivered and by whom. 11. In many cases, disabled tenants in this category will face a reduction in their Housing Benefit as a result of the size criteria and will be forced to find a new home, as well as new support providers. This would be an extremely difficult process for any disabled person, but particularly for those with learning disabilities and/or mental health problems. This group are likely to find such upheaval traumatic and may rely on support networks in their current area. Many of those who are dependent on the proximity of family and friends in order to live independently may reach crisis point and be forced to rely local authority and NHS services.
Severely Disabled Children 12. Capability Scotland is also extremely disappointed that the UK Government has failed to amend regulations to reflect the Court of Appeal’s findings in the Gorry case. In this case it was held that disabled children should not have to share a bedroom with their siblings if the local authority classes them as severely disabled. Despite the Court’s findings (and the UK Government’s decision not to challenge them), the relevant regulations have not been amended to reflect this legal change. This has resulted in an unacceptable lack of clarity for both local authorities and disabled households.
About Us Capability Scotland campaigns with, and provides education, employment and care services for disabled people across Scotland. The organisation aims to be a major ally in supporting disabled people to achieve full equality and to have choice and control of their lives by 2020. More information about Capability Scotland can be found at www.capability-scotland.org.uk. May 2013
Written evidence submitted by Robert Steele I have been to court, trying to get access to my son, which I have been given every Wednesday from 9am until 4:30pm and every second weekend from Thursday 6pm to the Monday 6pm. With all my calculations I had my son for 203 days last year and he stayed overnight for 127 of those. This has all been agreed through the courts and court orders. Now I have the bedroom tax which I have to pay with no financial help from anyone because I am classed as a single person and not a father, in all the housing and benefit offices. It is hard trying to get by and look after my child. Even my son does not have a bedroom at my council house. It is a spare room according to the government, even though I get good access to my son. I can’t seem to get help from anyone, they just all let me get in to debt. I think I have a very good case here with my situation. Fathers don’t get any help from benefits to bring up their children, but now we get charged for our child’s bedroom. I don’t know what to do. I am starting to think I should give my child to the mother and not be a part of my sons life anymore, so that I can get on in life and get back in to full time work. Everything in life just now is a obstacle. May 2013
Written evidence submitted by Mr and Mrs Henderson Since the bedroom tax came into fruition our household have struggled to pay this extra £9.14 per week. We reside in a two bedroom house. Mrs Henderson is currently off sick from work and has been since January 2011. She is in receipt of Employment and Support Allowance (ESA) and at this present time there is no indication of when exactly she will be able to return to work. Mr Henderson works part time and earns £50 per week. Mr Henderson has a heart condition; diabetes and arthritis thus there is a limit to what work he can do. Since Mrs Henderson went over to ESA in the middle of 2012 the household were assessed for housing benefit and had to pay rent. Due to the delay in ESA being awarded and actually being paid out many bills 23 Exempt and Supported Accommodation, DWP Research Paper, 2010, by Michelle Boath, Eleanor Baker and Helen Wilkinson http://research.dwp.gov.uk/asd/asd5/rports2009–2010/rrep714.pdf cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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had accumulated as well as rent arrears. In December 2012 it was discovered that our housing benefit had been wrongly calculated and we should not be paying any rent and only £14 per month council tax. Once this had been recalculated the arrears were cleared due to the credit we received and only £25 arrears were left which we duly paid.
Even though we no longer had rent to pay we still struggled financially. There was no Christmas in this household in 2012. If we had not been invited to our sons for Christmas dinner we would not have had any of this either.
Throughout this time we struggled to pay all household bills and buy food. If it was not for our immediate family buying us groceries we would not have had any food in the cupboards or freezer. We however cannot depend on the family to help out all the time as they have to live and exist in the current recession also. Due to Mr Henderson’s diabetes he needs good quality/sugar free food regular and often. Mrs Henderson is currently on a cancer drug to assist with rheumatoid arthritis and now has a potassium deficiency and has to eat food rich in potassium.
In March we received a letter saying we had to pay £9.14 per week rent due to the “bedroom tax” coming into force.
To date we have been unable to pay any of this as we do not have spare money.
Mr Henderson has a bad heart; arthritis and diabetes and as a result of these illnesses he is a very poor sleeper. Mrs Henderson has rheumatoid arthritis in very many joints in her body and is also a very poor sleeper waking up constantly to move due to the pain. As both of us were keeping each other awake and needing more room to move around in bed we decided to sleep in separate rooms and this was put into place in November 2012.
Due to illnesses and financial situation we feel we should not be penalised for staying in a two bedroom house when we actually require and use two bedrooms. May 2013
Written evidence submitted by Citizens Advice Scotland
The Scottish CAB Service forms the country’s largest independent advice network. Citizen advice bureaux (CAB) are the key frontline service that hundreds of thousands of people turn to and in doing so they deal with over half a million new issues every year. Citizens advice bureaux see the personal experiences of reforms as they take effect in households across Scotland, and are ideally placed to monitor the impact of the reforms on people and families.
Executive Summary
The UK Government’s changes to Housing Benefit have had a significant impact on claimants in Scotland. In this briefing, we have concentrated on the developing impact of the “bedroom tax” (we are able to send evidence on other aspects of Housing Benefit reform if required): — In the seven weeks since the introduction of the “Bedroom Tax”, more than 700 affected tenants have approached a citizens advice bureau in Scotland for advice. — A range of people are affected by the changes, including those with specially adapted homes for their health conditions, separated parents who potentially face losing access to their children, those living in rural communities who face moving away from families and friends, and tenants who are struggling to find alternative accommodation despite being willing to move. — So far, bureaux are seeing clients on the verge of crisis. Many are building up arrears, some are trying to cope through Discretionary Housing Payments, and others are trying to find smaller accommodation. Despite the best efforts of social landlords and advice agencies, many of these clients will reach crisis point in the coming weeks and months.
Introduction
Citizens advice bureaux in Scotland advised on 19,586 new Housing Benefit issues in 2012–13—around 75 per working day. This was an 11% increase on the previous year. However, this masks a much bigger recent increase in cases. Looking at year-on-year statistics, there was a 40% increase in issues in April 2013 compared to April 2012.
The increase in cases can be explained by the introduction of the new under-occupancy rules. In the first seven weeks after the start of the “bedroom tax”, more than 700 affected tenants approached a citizens advice bureau in Scotland for advice. This briefing provides a snapshot of these clients and their situations: cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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Social Groups Affected by the “Bedroom Tax” Households with Disabilities Of the 105,000 households in Scotland affected by the under occupation penalty, an estimated 83,000 report an adult in the household with a Disability Discrimination Act recognised disability. The proposed changes will therefore have a disproportionate impact on people with disabilities in Scotland. Many of these tenants have severe health conditions and face reductions in income that will potentially affect their health. A West of Scotland CAB reports of a 55 year old client who moved into a two bedroom tenancy a year ago that allows her to have her carer stay every second night as she has severe health issues. These include lung disease, liver disease, anaemia, and psychosis. She has now been told that she is under-occupying her tenancy. The client does not leave the house other than for hospital visits, and her carer visits every day. A South of Scotland CAB reports of a client with MS who lives in a housing association tenancy with two bedrooms. The client states that she needs an extra bedroom as she needs someone to stay overnight—either a friend or her brother stays at the weekend and her parents are there during the week. However, she has been told that she is under-occupying her tenancy. The client has poor balance and mobility and has to use a wheelchair at times. Her brother comes in to cook her evening meal as she burnt herself last year. The client is upset about the situation and feels that this is having an adverse effect on her health. Many tenants who live in adapted housing will be affected, with Scottish Government estimates showing that 16,000 affected households have some form of aid or adaptation, including 9,000 with a handrail, 2,000 with a wheelchair, and 1,000 with a stair lift. Aside from the worry and stress caused to the tenant, the local authority is likely to be faced with a bill for adapting another home if the tenant is forced to move. An East of Scotland CAB reports of client and her husband who are both registered disabled and live in a two bedroom home that has been adapted for them. They have been advised by the local authority that they will have to pay £56 per month in rent as they are under occupying their home. The client is registered blind and expects to be given a guide dog in the next few months. The client had a letter from her GP confirming her requirement for “a second bedroom for her own personal medical reasons”. The bureau helped the client to apply for a DHP. A number of clients who cannot share a bed with their partner due to a medical condition have sought advice after being told that they are under occupying their home. An East of Scotland CAB reports of a client who had received a letter from his housing association regarding changes to Housing Benefit. The client lives in a two bedroom house with his wife, but will receive less benefit as he is considered to be under occupying his tenancy. The client sleeps separately from his wife because of a medical condition which resulted from a stroke some years previously. The UK Government has increased the fund for Discretionary Housing Payments (DHPs) with the extra money specifically aimed at ensuring that the most vulnerable people are protected from the under occupancy penalty. However, the funding for DHPs is far below the level of payments that will be lost by claimants, meaning that the majority of those affected are unlikely to be supported by DHPs. Research by the National Housing Federation found that if the additional funding was distributed equally among every claimant of DLA affected, they would each receive just £2.51 per week—compared to the average £11 a week loss in housing benefit in Scotland.
Families and Separated Parents Due to the outcome of a legal challenge to their proposals, the Government has exempted some families whose children are considered to be disabled. However, this does not cover all families whose children are affected by health problems. Many families who were allocated larger tenancies based on their children’s health problems are now considered to be under-occupying their tenancies. An East of Scotland CAB reports of a single parent of two young children who is affected by the “bedroom tax”. The client lives in a three bedroom tenancy with her six year old son, who has autism, and her daughter who is five years old. The client was allocated the property on medical grounds due to the disruption caused to the client’s daughter when she is sharing a room with her brother. The client receives carers allowance and DLA to look after her son. A number of clients seeking advice on the changes have an extra room so that their children can stay with them on a part-time basis after a separation. The current policy of many local authorities is to allocate an additional room to a parent with overnight access. Under the new provision, separated parents could be forced into smaller properties or shared accommodation where they may be a risk to the child or access removed. A West of Scotland CAB reports of a client who lives in a two bedroomed tenancy as his son stays with him two nights per week. He has been advised that he is under occupying his tenancy and that this will leave him needing to pay £8 per week, which he cannot afford. The client’s son is 11 and has become much closer to the client since he has been coming to stay with him. The client is cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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worried that he will be forced to move to a one bedroom flat and his son will no longer be able to spend nights with him. A West of Scotland CAB reports of a client who was homeless and on the waiting list for a one bedroom flat. After his son was born six months ago, his girlfriend wrote a letter to the local authority asking for the client to be allocated a two bedroom house as he would be caring for the child for part of the week. The client now lives in a two bedroom tenancy with his son staying with him for four days a week. His Housing Benefit notification shows that he now has a reduction of 14% and must pay almost £10 per week in rent. The client is in receipt of ESA and cannot afford the additional amount.
Rural Communities Due to the limited supply of local housing in many small rural communities, there are likely to be tenants affected by the under occupancy changes who cannot move to a smaller property in their community. In these cases, the only option available to tenants would be to seek a transfer to another community, which may be many miles away with limited public transport links. This could remove tenants from friends and family. In Scotland’s remote towns and rural areas, there are an estimated 12,000 households of working age in social housing receiving housing benefit and under occupying their properties. A Central Scotland CAB reports of a 59 year old client affected by the under occupancy changes who has lived in the same house in a village for 51 years. The client has received a letter from the local authority stating that she will have to pay 25% of her Housing Benefit, amounting to £16 per week. The client has lived in the village all her life and considers her neighbours to be her family. There are no one bedroom houses in the village so she will have to leave, which she is finding very upsetting. The bureau calculated that the change would leave the client £25 a week for food and travel after essential costs.
TheImpactSoFar At the time of writing, we are less than two months into the implementation of the under-occupancy changes. At this point, it is too early to see the worst case scenarios which will surely be realised as the months pass. However, case evidence is starting to emerge which shows the financial impact of the changes and also the difficulties that many clients are facing when they try to move to smaller accommodation.
Financial Impact Many of those affected by this change will be unable to make up the shortfall in their rent. The Scottish Government estimates that over a fifth (22%) of tenants affected by the under occupation penalty (over 23,000 households) will need to use over 10% of their residual income after housing benefit to meet the shortfall. It is likely that these households will soon fall into arrears if they do not find a smaller tenancy. Bureaux have seen many clients who are facing significant financial difficulties, including struggling to afford food, as a result of the changes. A West of Scotland CAB reports of a client who was in tears in the bureau as a result of the impact of the “bedroom tax”. The client claims JSA and lives alone in a three bedroom council tenancy. After the additional £34 she is paying in rent per fortnight, plus her gas/electricity charges, she is only left with £10 to live on, some of which must be used to pay for bus fares to the Jobcentre. The client was very upset about the whole issue and was desperate for some sort of help. She claimed not to have been able to afford to eat for the past five days because of the new “bedroom tax” draining her resources. However, the client does not wish to move home as she feels that if she left the village she would never see her grandchildren again, as her son died in 2007 and she is trying to maintain contact. A West of Scotland CAB reports of a client who is struggling to afford food as a result of under- occupancy changes. The client is in receipt of ESA and DLA. She has paid £62 towards her rent this month which is now the difference between her Housing Benefit payments and her rent. As a result, the client is left with no money and will not receive another payment for several days. The client has unsuccessfully applied for Discretionary Housing Payment. The client states that she has no money for food and asked for advice on receiving a food parcel. The client now has a food parcel that will last a week and the bureau has set up fortnightly payments so the client won’t be left without any funds. However, the client is still likely to struggle with her finances. This change comes in a context where benefits claimants are facing significant losses of benefits. Although we are not aware of any analysis of the impact on particular claimant groups, there have been several analyses of the impact of wider welfare reforms in Scotland. The most recent, commissioned by the Welfare Reform Committee at the Scottish Parliament,24 shows that once all the welfare reforms have come into effect, the financial loss will be equivalent to £480 a year for each working age adult in Scotland. The impact for those claiming benefits will be much more severe: in his oral evidence to the committee the report’s author suggested 24 http://www.scottish.parliament.uk/S4_Welfare_Reform_Committee/Reports/wrR-13–02w.pdf cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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that a disabled individual could lose £6,500 a year in disability benefits alone,25 with other benefits losses coming on top of that. The loss of other benefits, such as the ongoing Incapacity Benefit reassessment and the increasing stringency of the sanctions regime, are putting further pressures on claimants. In addition, in the future one of the most significant factors affecting the relative income of benefits claimants will be the 1% cap on benefits increases. All these factors together combine to put significant pressure on household incomes. We would urge the Committee to look in more detail at the impact that welfare reforms will have on the Scottish economy and services, and on equality and poverty in Scotland, including food poverty. We would also suggest that an investigation into the impact on specific groups, particularly disabled people (of whom there are proportionately more in Scotland than in other parts of the UK), and on the implementation of specific aspects of the welfare reforms, such as sanctions.
Difficulties Finding Alternative Accommodation In order to cope with the changes to their benefits, the DWP expect affected householders to either: — Continue to live in the tenancy and make up any shortfall from other income/savings, from moving into work/increasing work hours, or letting out a spare room; or — Move to a smaller tenancy which they are not deemed to be under occupying. Many of those affected by the changes are either in low paid work or receiving JSA. It is therefore possible that some of those affected could find work that covered the shortfall in their rent. However, case evidence shows that some claimants are struggling to find additional work in a tough economic climate. An East of Scotland CAB reports of a client who has “tried every which way” to increase her earnings to enable her to pay the £18 per week shortfall that she will face. The client is deemed to be under occupying her home as she has two extra bedrooms. She has lived in the village for decades and works at the local school on a part-time basis as a cleaner. The client has tried to get another job and regularly visits the Jobcentre. The client is very concerned and stressed that she is going to find herself in debt in the very near future and fears being made homeless. Claimants who cannot make up the shortfall in their rent are being encouraged to move to a smaller tenancy. However, there is often very limited scope for an under occupying tenant subject to the under occupancy penalty to move to more suitably sized accommodation in the social rented sector. Scottish Government analysis shows that while 60% of tenants need a one bedroom property to avoid under occupying their home, only 26% of occupied social rented properties have one bedroom. There is therefore a mismatch between need and supply of one bedroom properties, with the result being that many of those affected will not be able to find alternative accommodation. Many clients are trying to move to smaller and more affordable accommodation, but are encountering barriers in the process. These barriers include the client having rent arrears, chargeable repairs for their existing property, or the local authority reclassifying the number of bedrooms in their home. For many of those affected, the only way to cope with under-occupancy charges is to find more affordable accommodation. Local authorities and social landlords have worked hard to implement policies that help mitigate the impact of the “bedroom tax” for their tenants, so it is important that any barriers to this aim are removed where possible. A West of Scotland CAB reports of a 60 year old client who has been informed that she is under- occupying her three bedroom tenancy. The client therefore applied to be re-housed in a smaller tenancy. However, she has been told that she cannot be re-housed because there are chargeable repairs that would have to be done before she could be placed on the transfer list. The client is in receipt of ESA and does not have any excess income to pay for repairs. She believes that these repairs are minor and have been caused by wear and tear. The adviser contacted the local authority who stated that the cost of the repairs was £140. A North of Scotland CAB reports of a client who lives in a three bedroom tenancy with her two sons under the age of 16. She was told that she is under-occupying the property and she therefore wrote to the housing association to request a downsize. However, she has had a letter back to say that, under their regulations, she should have a three bedroom house and is not entitled to a down size. The client put herself on the transfer list, but has been unsuccessful in finding an exchange. An East of Scotland CAB reports of a client who has been told that he cannot apply for a housing exchange as he is in rent arrears. The client has been told that he is under-occupying his tenancy and has fallen into arrears as a result. The client already has council tax arrears and is awaiting deductions from his benefit payments. He has been told that he cannot swap until his arrears are cleared. A West of Scotland CAB reports of a client who approached the bureau for advice as he had court action pending for rent arrears. He made an arrangement with his Housing Officer to repay the debt, but he has now been affected by the “bedroom tax”. The client applied to move to a smaller tenancy in order to avoid further arrears, but has been told that he will not be allowed a new tenancy 25 Scottish Parliament Welfare Reform Committee Official Report 16 April 2013 http://www.scottish.parliament.uk/ parliamentarybusiness/28862.aspx?r=8064&mode=html cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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agreement as he is in rent arrears. The client is worried that he will be unable to pay the extra amount of rent plus the rent repayments from his JSA payment of £56.25. His gas and electricity supply is currently switched off. An East of Scotland CAB reports of a client and her husband who had organised a mutual exchange of their current three or four bedroom house for a new three bedroom tenancy. Their house is currently classified as a three bedroom property, as a small bedroom was converted to a shower room, but is being re-classified as a four bedroom house. This is causing problems with the proposed house exchange. The couple have two children both of whom have special needs, including an 11 year old daughter with epilepsy and a four year old with autism. They have a letter from the Royal Hospital for Sick Children in Edinburgh backing up the requirement for them to have separate bedrooms for their children.
The Committee has asked for evidence on whether the changes to Housing Benefit will affect the supply of private rented tenancies to claimants. The Government has suggested that many of those affected will be able to move into private rented tenancies, so it is essential that there is a supply that meets this demand. In fact the National Housing Federation has suggested that a family moving from an over-occupied two bedroom house in the social sector to a private one bedroom house in the private rented sector could claim an average of £1,500 a year more in Housing Benefit.26
However, case evidence suggests that private rented sector landlord attitudes towards Housing Benefit claimants are beginning to harden, much in the same way as the “no DSS” mantra affected tenants in years previously, which may mean that the choice of private rented accommodation becomes much more restricted for Housing Benefit claimants. An East of Scotland CAB reports of a client who has been given a notice to quit by her landlord as the flat is being sold. The client lives with her daughter who is at college and her son who has recently started working. The client has tried to rent through letting agencies but has been rejected by them because she receives Housing Benefit. It would appear that all local letting agencies are applying this rule as she has contacted a number of them.
Discretionary Housing Payments
The experience of Scottish citizens advice bureaux is that the majority of clients affected by the bedroom tax are making or have already made an application for Discretionary Housing Payments. Our statistics show that more than 500 Discretionary Housing Payment issues were brought to bureaux in the first month after the start of the “bedroom tax”, compared with less than 100 for April 2012. A recent analysis of 51 local authorities published in the Independent newspaper27 found that Glasgow had received 5,500 applications for DHPs during April 2013, up 283% on the previous year, and North Lanarkshire had seen the biggest rise in the number of applications with an increase of 3,821%. Given the limited funds that are available to local authorities for DHPs, it is likely that the majority of these applications will either be turned down or will be awarded for a very limited period.
Many clients approaching bureaux are in the process of making an application, so it may well take weeks until the outcome of the applications are known and begin to emerge through bureau evidence. It is at this point that many claimants may fall into crisis. Anecdotal evidence regarding DHPs suggests that GPs are being asked to provide written evidence to confirm information in the application. GPs may be unable or unwilling to do this. For example, a group of GPs in Glasgow have now said they will not respond to patients’ requests for letters to support benefit applications, and some GP practices charge significant fees for providing such reports. An East of Scotland CAB reports that the local authority is requesting letters of support from GPs with applications for discretionary housing payments. However, it appears that GPs are resistant to the idea of providing such letters. A client sought advice after he had asked his GP for a letter confirming his medical condition and was told to come to the CAB for the adviser to make a request in writing.
Conclusion
So far, bureaux are seeing clients on the verge of crisis. Many are building up arrears, some are trying to cope through Discretionary Housing Payments, and others are trying to find smaller accommodation. Despite the best efforts of social landlords and advice agencies, many of these clients will reach crisis point in the coming weeks and months. May 2013
26 National Housing Federation (2013) The bedroom tax: some home truths http://s3-eu-west-1.amazonaws.com/ doc.housing.org.uk/News/Bedroom_tax_home_truths.pdf 27 http://www.independent.co.uk/news/uk/politics/revealed-devastating-impact-of-bedroom-tax-sees-huge-leap-in-demand-for- emergency-hardship-handouts-for-tenants-8621666.html cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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Written evidence submitted by James Kempston I would like to point out the unfairness of the “Bedroom Tax” on low income families who have same sex children aged 11–16yrs. (1) Low income families with two children of different sex aged 11–16yrs with three bedrooms have no reduction of Housing Benefit. (2) Low income families with two children of the same sex aged 11–16yrs with three bedrooms now have a reduction of Housing Benefit. (3) This is totally unfair .....and I can only guess that this new Housing Benefit policy is based on an outdated view of sex and sexism. (4) Surely all children should be treated the same..... regardless of their sex. May 2013
Written evidence submitted by Margaret Burgess MSP, Minister for Housing and Welfare, The Scottish Government — The Scottish Government is firmly opposed to the bedroom tax. — The measure is socially divisive and could lead to increased social inequalities. — 105,000 Scottish households are affected and 79% of those contain a disabled adult. — 16,000 families with children are affected. — Justification for its introduction inappropriately cuts across devolved issues. — The measure takes no account of Scottish circumstances. — Funding for Discretionary Housing Payments is inadequate. 1. The Scottish Parliament has devolved responsibility for housing in Scotland. Since devolution, successive administrations have pursued policies and strategies that have developed and enhanced the housing landscape according to the needs of the Scottish people. We in the Scottish Government are committed to delivering a vision where all people in Scotland live in high-quality sustainable homes that they can afford and that meet their needs. 2. The Scottish Government is opposed to the bedroom tax, believing it to be a socially divisive measure that could increase social inequalities across the UK. The policy is penalising tenants in the social rented sector for living in accommodation which is deemed to be too large for their needs. Yet most of those tenants did not choose to under-occupy. 3. The bedroom tax takes no account of circumstances in Scotland. Of the estimated 105,000 households which will be affected, around 78,000 would need to move to one bedroom accommodation in order to avoid the penalty. Last year there were also 23,000 homeless applications which would require one bedroom accommodation under DWP’s criteria. However there are only around 20,000 social lets of one bedroom properties each year. 4. Temporary accommodation provided to homeless people in local authority accommodation is subject to the measure. Most temporary accommodation in Scotland is provided in the social rented sector. As of 30 September 2012, there were 10,546 households in temporary accommodation in Scotland with 48% in local authority owned stock. There are limited alternative options available to Scottish Local Authorities about how to temporarily house homeless households as the private rented sector is not as available in Scotland as it is in England (where it is the main way that English local authorities temporarily house homeless households). The option available for Scottish local authorities, their own stock, will not always “fit” the homeless household in the way dictated in the bedroom criteria. These households in crisis will be liable for the extra rent due without having made a decision to under-occupy the accommodation. 5. Scotland’s share of claimants affected by the bedroom tax is around 16% compared with a GB population share of 8.6%. Furthermore, 79% of households in Scotland affected contain an adult who has a Disability Discrimination Act recognised disability. This compares with 63% for GB. 6. The UK Labour Government in 2008 introduced the Local Housing Allowance (LHA) for claimants of Housing Benefit in the private rented sector. LHA introduced a different way to calculate entitlement to housing benefit and included revised bedroom allowance size criteria. However, LHA was introduced with transition arrangements. For example, it only applied to private tenants who are making a new claim for Housing Benefit; hence, LHA does not apply to tenants who have claimed continuously since before April 2008. In Scotland, there are currently over 15,700 (16% of the total) unregulated private tenancies claiming housing benefit that have not made the transition to LHA. The 2011 and 2012 reforms to LHA also incorporated transition arrangements to help tenants and landlords adapt, with existing claimants being given nine months of transitional protection after the first anniversary of their claim. 7. Social Landlords in Scotland all operate under the same legislative framework. This focuses priority for housing on an applicant’s housing need and circumstances. A mechanism consequently exists to prioritise and cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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direct tenants to properties that are a best fit to their needs at the point of entering into a tenancy or when tenancy arrangements change. If transition arrangements were included with the introduction of the bedroom tax, there could have been a gradual move to the new size criteria. However, tenants who are subject to the bedroom tax have had their housing benefit cut since the start of April regardless of circumstances.
8. The UK Government has stated that the bedroom tax will encourage social mobility and solve overcrowding. These issues in Scotland are the responsibility of the Scottish Parliament. The measure therefore inappropriately cuts across devolved matters.
9. Furthermore, justifying the bedroom tax on the basis that it will solve overcrowding is misguided and disproportionate. Not only is there a lack of available one bedroom properties, only 6% of households are overcrowded whereas the measure affects 18% of households in the social rented sector.
10. Part of the justification for the bedroom tax is that housing benefit is perceived to be out of control. The UK Government has stated that it inherited a Housing Benefit bill which had doubled—from £11 billion to £23 billion—over the last decade. Whilst this is correct, in Scotland total housing benefit expenditure rose from £1.1 billion to £1.7 billion—half the rate of increase in England.
11. Over the last 10 years, in inflation adjusted terms, the increase across GB is 53%—and 93% of this increase is attributable to England, and 31% to London alone. In Scotland, the total cost of Housing Benefit has increased by 21%. In the social rented sector, housing benefit expenditure in Scotland has increased by only 6% during a prolonged and severe recession.
12. The Scottish Government has repeatedly made clear that the savings that will be realised in housing benefit expenditure will be greatly outweighed by the negative social and economic impacts.
13. If no one moves, the policy saves the UK Government £60–65 million in Scotland by removing housing benefit for some of the poorest people in our society. More realistically, the reforms in Scotland will result in the UK Government saving around £53 million per year which will cost the Scottish economy around £55 million per year.
14. Households moving from the social sector to the private sector will tend to cost the UK Government more in housing benefit. There may be continued financial stress for these households, not least because of the changes to Local Housing Allowance. This is likely to be exacerbated by the forced switch from a previously stable, secure tenancy in the social sector to a private sector one that is likely to offer much more uncertainty.
15. There will also be one-off losses of around £87 million in Scotland in 2013–14. This is based on likely administration, re-let and void costs associated with moving tenants plus the costs of tenancy failure including temporary accommodation where moves are not possible. It does not include the moving or other costs of households themselves nor does it consider any wider social costs.
16. The policy will further fail to deliver the projected savings when the full impact unravels and costs are imposed on local authorities and other public services as a result of increased health and social inequalities.
17. DWP has increased Discretionary Housing Payments (DHP) for local authorities to deal with “hard cases” but this is inadequate. Scotland receives only 6.5% of the total DHP budget. Scotland and London have the same numbers affected by bedroom tax but for 2013–14 Scotland will receive £10 million in DHP compared with £56.6 million for London. A recent press report revealed a 338% increase across GB in the number of applications to local authorities for DHPs. Glasgow recorded the highest number with 5,501 people seeking financial assistance.
18. The Scottish Government is taking all reasonable action to mitigate the impact of the housing benefit reforms. Of the additional £7.9 million funding we are providing for advice services to ensure there is support on hand for people affected by welfare reform, £2.5 million is ring fenced for the social rented sector. We have also made available a £590,000 training, guidance and support package to boost the capacity of social landlords and homelessness prevention services.
19. The Scottish Government is firmly of the view that the bedroom tax is a socially divisive and pernicious measure. We are totally opposed to this policy which is why we have said we will revoke it if Scotland votes for independence in 2014. May 2013 cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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Written evidence jointly submitted by the Coalition of Care and Support Providers in Scotland, The Criminal Justice Voluntary Sector Forum and The Housing Support Enabling Unit 1. Introduction CCPS is the Coalition of Care and support Providers in Scotland. Its membership comprises more than 70 of the most substantial providers of care and support in Scotland’s voluntary sector, supporting approximately 270,000 people and their families, employing around 45,000 staff and managing a combined total income of over £1.2 billion, of which an average of 73% per member organisation relates to service provision that is commissioned, purchased or otherwise funded by the public purse. CCPS members provide services right across the spectrum of care and support, including services for older people; children and families; adults with physical and learning disabilities; and people facing a range of challenges in their lives, including mental health problems, addictions and involvement in the criminal justice system. The Housing Support Enabling Unit (HSEU) works with providers of housing support across Scotland across the voluntary and private sectors and has done so since 2004. The Criminal Justice Voluntary Sector Forum (CJVSF) aims to promote the role of the voluntary sector within criminal justice and to support voluntary sector providers working in the field of criminal justice in Scotland to increase the impact of their activities.
2. Summary Vulnerable people across Scotland face growing difficulties accessing and sustaining the housing and support they need due to the cumulative impact of welfare reform. Providers of housing and housing support have concerns about the following aspects of welfare reform: — the impact of the under-occupation restriction (the “bedroom tax”); — lack of availability of one bedroom properties in the social rented sector; — payments for rent being paid direct to individuals rather than landlords; — some supported housing not qualifying for exemptions from certain aspects of welfare reform such as the “bedroom tax”; — the impact on those using criminal justice services; and — increasing use and pressure on services provided by the voluntary sector.
3. The impact of Housing Benefit reforms in Scotland 3.1 Direct payments of rent to individuals The direct payments demonstration projects have highlighted an increase in rent arrears. Arrears across the demonstration projects ranged from 3% to 12%. Three leading RSLs were concerned about the impact that direct payments will have on rental income. In addition, Dunedin Canmore, the demonstrator project in Scotland, has found that “engagement, advice on budgeting and financial inclusion will involve markedly more intense housing management resource commitment and staff liaison than has traditionally been the case”. This could have significant cost implications in terms of housing management at a time when rental income is under increasing pressure.
3.2 Supported Housing Supported housing will be dealt with separately from the Universal Credit system initially but a new system will be developed in the future (2014 onwards) and it is likely that the Westminster Government will devolve funding to Scotland for supported housing. The future funding of supported housing for those who require assistance to meet housing costs is uncertain. There is particular concern about the future financial stability of supported housing in respect of: — the removal of individual entitlement to assistance to pay housing related costs; — the possibility that assistance with housing related costs will be subject to un-ringfenced funding at a local level; and — the level of any future devolved budget and the risk that it may not fully reflect the current cost of supported housing. 3.4 In the meantime some supported housing in Scotland appears to be subject to aspects of welfare reform such as the “bedroom tax”, despite the Westminster Government’s stated intention to exempt supported housing from them. The reason for this lies with the decision to restrict the definition of supported housing to that of Supported Exempt Accommodation (SEA). Unfortunately SEA: — does not include supported housing owned and let by local authorities; and — lacks clarity about situations where the landlord is not also the support provider. cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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3.5 A joint survey1 undertaken by the HSEU, the Scottish Federation and Housing Associations and Homeless Action Scotland in March 2013 found that many supported housing providers anticipated difficulty in gaining exemptions from aspects of welfare reform, such as the bedroom tax, because of the criteria associated with Supported Exempt Accommodation. The survey found that: — 42% of respondents (13 respondents) thought that some or all of their supported housing services would not fall within the definition of SEA. This could mean that some vulnerable people in Scotland will not be able to meet housing related costs associated with supported housing. — Most types of supported housing appeared to fall outside the definition of SEA to some extent. Supported housing aimed at people with mental health problems; people with learning disabilities; people with physical disabilities and homeless resettlement projects appear most likely not to meet the criteria for SEA.
3.6 Whilst it is too early to assess the full implications of the “bedroom tax” there are already indications that supported tenancies are being put in jeopardy. In one case a local authority is still to decide whether or not supported housing, provided through a core and cluster model involving a registered social landlord and a voluntary sector organisation, is going to be treated as SEA. If it is decided that it does not meet the criteria for SEA, tenants with learning disabilities may face financial hardship because of the bedroom tax. As one such tenant recently stated “I didn’t ask for a two bedroom house. This was what I was offered.” That same tenant has expressed grave concern at the thought of having to move but realises that a drop in benefit entitlement due to the “bedroom tax” would severely curtail activities he can undertake. This would include curtailing some of the voluntary work he is currently involved in.
3.7 Scottish Womens Aid has surveyed its own members and found that that 30% of refuge accommodation is owned by local authorities and as such does not fall within the definition of SEA. Accommodation for refuge services needs to be flexible in terms of size to ensure that women and their children can be offered shelter when the need arises. On occasion this will inevitably mean a degree of under-occupation and will therefore be subject to the bedroom tax (if the refuge does not meet the SEA criteria).
3.8 The “bedroom tax” is already limiting the options for people facing homelessness and could impact on the availability of supported accommodation provided through the “Housing First” model which is being piloted in Glasgow by Turning Point. Under this model, people facing homelessness avoid using temporary accommodation whilst accessing the support they need.2 The “bedroom tax” could severely restrict available accommodation for single people and couples facing homelessness, and result in greater demand being placed on temporary accommodation.
3.9 Whilst local authorities may decide to prioritise some assistance for supported housing services that do not meet the SEA criteria through the Discretionary Housing Payments (DHP) this can only be regarded as a short term solution given the intense pressure on DHP. Already the number of applications for Discretionary Housing Payments have increased. Glasgow City Council, for instance, received 5,501 applications for DHP in April 2013 compared with just 1,437 in April 2012.3
3.10 Criminal Justice practitioners
Criminal justice practitioners have highlighted a number of ways these reforms were impacting (or were expected to impact) on their service users. Practitioners reported particular concerns that service users were struggling to meet their day-to-day living costs and many were unable to afford any increase in housing costs arising from the “Bedroom Tax”. At the same time, a lack of alternative housing available locally meant that the individuals concerned did not have the option to move to a smaller property and were therefore facing rent arrears.
3.11 Practitioners also anticipated that the “Bedroom Tax” could impact on families that have a family member going to prison. An individual is eligible for housing benefit when they are in prison: — up to 52 weeks awaiting trial or sentence; and — up to 13 weeks if sentenced and likely to return home within 13 weeks.
If an individual is in prison for longer than these periods, then they will not be eligible to claim housing benefit and the “Bedroom Tax” could apply to the family.
3.12 The “Bedroom Tax” will also affect single parents who are not primary carers, since they will not be eligible for additional bedrooms to accommodate their children. Practitioners raised concerns that, if they had to move to a smaller property, this would impact on quality family time since there would be no space for the children to stay in the home overnight. This was particularly a concern in the case of ex-offenders where strong family links have been shown to reduce the risk of reoffending. cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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4. Whether the Housing Benefit policy is coherent and enables access to homes in Scotland
4.1 Shortage of appropriate housing to mitigate against the Bedroom Tax
There are concerns about the level of access for single-bed properties in Scotland for those who are subject to the under-occupation subsidy, as there is a general shortage of this type of accommodation. For example, there are 3,200 single-bed households in City of Edinburgh Council area currently seeking housing & only approximately 900 tenures available from local authority and registered social landlord allocations. During week beginning 20.05.13 we noticed that 32 one bedroom social rented properties were advertised in Edinburgh, with an average of 121 bids per property through its choice based lettings system. Of these 32 properties: — Four were sheltered housing. — Four were amenity properties or had some sort of age restriction (usually 55 and over). — Eight were on the ground floor.
Of the 16 remaining properties there was an average of 149 bids per property. This highlights the particular challenge that working age single people or couples may face in obtaining one bedroom accommodation. This could be a particular issue for ex-offenders seeking to find settled accommodation; this is known to be an important factor in reducing the risk of re-offending.
5. What powers the Scottish Government, Councils, social landlords and others have to mitigate the impact of the reforms, and whether these are being used effectively
5.1 Whilst there is evidence4 that registered social landlords are working hard to mitigate the impact of the “bedroom tax” by making changes to their allocations policies, by providing information and advice to tenants and by facilitating moves to smaller properties wherever possible, the fact is that there are insufficient one bedroom properties in the social rented sector as outlined above. This means that tenants will be forced into greater poverty and hardship. There is evidence that households containing a disabled person will be disproportionately affected for two reasons: — 79% of households affected by the “bedroom tax” contain a disabled person5; and — the biggest financial impact of welfare reform in Scotland will come through incapacity benefits.6
Voluntary sector organisations in Scotland have been facing increased pressure on services as they respond to the needs of vulnerable people across the country.7 In a recent survey carried out by the Scottish Council for Voluntary Organisations, 72% of respondents reported an increase in demand for their services last year as a result of welfare reform and 88% expect a further increase in demand this year. It is particularly disturbing to realise that the demand for and use of foodbanks has seen a sharp increase. The Trussell Trust recently reported an increase of 150% over the last year.8 June 2013
Written evidence submitted by Shelter Scotland
Summary — The changes to housing benefit introduced by the Department of Work and Pensions (DWP) since 2011 will have a significant impact on many households in Scotland. The under occupancy reforms specifically, will put many tenants into rent arrears, risking eviction and even homelessness, with around 3,000 tenants potentially facing a reduction in their housing benefit entitlement of £20 per week.28 — Shelter Scotland welcomes the opportunity to submit evidence to the Scottish Affairs Committee on the impact of these reforms. Our response primarily focuses on the impact of these changes on those claiming housing benefit, but also takes into account the financial consequences for local authorities as housing providers and other social landlords. — The biggest danger of these reforms, particularly the changes which relate to under-occupancy in the social rented sector, is that tenants build up rent arrears and through no fault of their own, face eviction and potential homelessness. This is clearly grossly unfair and will have a devastating impact on many households across Scotland. 28 Para. 5, Scottish Government, “Impact of Planned Housing Benefit Changes in Scotland: Reducing the Housing Benefit of Households of Working Age in Social Housing Under-Occupying a Property”, February 2013 cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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— The under occupancy policy is ill thought out in that there simply are not enough one and two bedroom houses required for “under-occupiers” to move into. For example, 60% of those affected by this policy require a one bedroom house to avoid a benefit reduction, however, one bedroom houses make up only 26% of overall housing stock in the social rented sector.29 Moreover, a move into the private rented sector for a housing benefit claimant in Scotland would actually involve an increase in cost to the taxpayer, even after taking into account down-sizing.30 — In a Scotland-specific context, the inclusion of council-owned temporary accommodation in the under occupancy rules will have a disproportionate impact on a very vulnerable client group, with some shortfalls being as high as £100 per week. This change impacts most significantly in Scotland because around 50%31 of temporary accommodation is council owned (this figure is much lower outside Scotland). — As Shelter Scotland called for, a coordinated approach across all social housing providers led by the Scottish Government is required to effectively mitigate the effects of these reforms. For example, a common approach to arrears which is clearly communicated to tenants with the Scottish Government providing housing providers with a financial safety net to ensure no social landlord is made bankrupt by these reforms. — Discretionary housing payments (DHPs) should be used wisely and the DHP budget added to by local authorities where possible. However, the scale of the cuts means that DHPs cannot fully mitigate the impact of housing benefit reform. — The combined impact of reductions to the housing benefit paid to private rented sector (PRS) tenants has made parts of the sector more unaffordable. This in turn has increased the likelihood of arrears, eviction and potential homeless amongst private tenants.
The impact of housing benefit reforms in Scotland 1. In Scotland it is estimated that 105,000 will be affected by the under occupancy changes—equating to roughly 39%32 of all social tenants. The Convention of Scottish Local Authorities (COSLA) estimates that 40% of these will fall into rent arrears because they will not have enough money to pay for the cut to their housing benefit. 2. The application of the under occupancy reduction to council-owned temporary accommodation will have a disproportionate effect on homeless households in Scotland. Under the Housing (Scotland) Act 2001, local authorities have a statutory duty to provide temporary accommodation to households who are statutorily homeless. Around 50%33 of temporary accommodation in Scotland is council-owned and it is mostly made up of two or three bedroom family-size housing, meaning the availability of one bedroom temporary accommodation is severely limited. Those under-occupying their temporary accommodation will have their housing benefit reduced significantly, with some reductions totalling up to £100 per week. Those living in temporary accommodation provided by the private sector or leased from a registered social landlord will not be affected by the under-occupancy reduction as their rent is covered by different subsidy arrangements. Given the client group affected by this change, such a shortfall will more than likely exceed the total remaining household income for those living in council-owned temporary accommodation. This will have a significant impact on local authority budgets, with one local authority predicting an annual loss of £3.5 million. 3. The benefit cap could reduce welfare payments in Scotland by around £14 million per year spread between 4,600 claimants.34 Those in temporary accommodation are likely to be one of the groups most affected by the benefit cap, given the high rental charges for this type of accommodation. For a single person to be affected by the cap, rental payments would need to be around £200 per week;35 this is often case in council-owned temporary accommodation. It is unrealistic to expect this particular client group to make up any shortfall in their rental payments. Around 60% affected by the cap live in the social rented sector. Those with large families have also been identified as being affected by the cap on benefits. As the cap is applied, at first, by a reduction to the claimants’ housing benefit (later through universal credit) there will be a shortfall in rental payments to make up, should a household be affected by the cap. If the claimant cannot make up any shortfall they will fall into arrears, risking eviction and potential homelessness. Given that many affected by the cap will already be in temporary accommodation as a result of having been made homeless, this would only serve to compound already existing issues for very vulnerable claimants. 29 Para.14, Scottish Government, “Impact of Planned Housing Benefit Changes in Scotland: Reducing the Housing Benefit of Households of Working Age in Social Housing Under-Occupying a Property”, February 2013 30 Shelter Scotland campaign: “The Bedroom Tax is ill-thought out and we oppose it” 31 Scottish Government, Operation of the Homeless Persons Legislation in Scotland: Quarterly Update (October-December 2012)— Excel Tables Supporting this publication 32 Para. 4 Scottish Government, “Impact of Planned Housing Benefit Changes in Scotland: Reducing the Housing benefit of Households of Working Age in Social Housing Under-Occupying a Property”, February 2013 33 Scottish Government, Operation of the Homeless Persons Legislation in Scotland: Quarterly Update (October-December 2012)— Excel Tables Supporting this publication 34 Scottish Government, “The Benefit Cap—Assessment of impact in Scotland”, February 2013, http://www.scotland.gov.uk/Topics/ Built-Environment/Housing/supply-demand/chma/Benefitchanges/Thebenefitcap 35 Scottish Government, “The Benefit Cap—Assessment of impact in Scotland”, February 2013, http://www.scotland.gov.uk/Topics/ Built-Environment/Housing/supply-demand/chma/Benefitchanges/Thebenefitcap cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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Whether the housing benefit policy is coherent and enables access to homes in Scotland
4. Tenants who are willing to downsize to avoid having their housing benefit cut may not be able to do so as there simply is not the one or two bedroom housing stock available for them to move into. Moreover, if affected tenants are able to find a suitably sized property in the private rented sector, and then claim local housing allowance (LHA), this would result in a higher overall cost to the taxpayer, given that rents are higher in the private rented sector than the social sector in Scotland, even after taking into account downsizing.
5. Modelling has also shown that for someone in part-time low income work affected by under occupancy, simply increasing hours to make up the difference between their housing benefit and their rent is not realistic. By increasing their hours at work they would in turn reduce their eligibility for housing benefit, meaning that they would need to nearly double their hours at work to make up the cut.36
What powers the Scottish Government, Councils, social landlords and others have to mitigate the impact of the reforms, and whether these are being used effectively
6. Shelter Scotland drew up a petition calling for the Housing and Welfare Minister in the Scottish Government to coordinate a Scotland-wide response to the under-occupancy changes by arranging an emergency summit of social landlords. We suggested a three point action plan for the Scottish Government to take forward, which included: a guarantee that no-one is evicted for under occupancy arrears, confirmation that no-one will be made intentionally homelessness as a result of an eviction stemming from under occupancy arrears, and that £50 million be set aside to mitigate for the financial impact of the reforms.37 Our petition has gathered 1,142 signatures. It is unfortunate that our recommendations have not been taken forward by the Scottish Government (discussed in detail below).
7. In terms of under occupancy evictions social landlords have the power not to evict tenants who are forced into arrears purely because of cuts to their benefit entitlement. Shelter Scotland believes that eviction should always be an option of last resort. It often compounds the financial difficulty people are in and can lead to homelessness, hence our call on the Scottish Government to guarantee that no under occupancy evictions take place. Some local authorities have made pledges along these lines, however, the picture is not the same across the whole of Scotland and these commitments contain carefully worded caveats.38 Moreover, current commitments by social landlords do not extend to every social tenant in Scotland. The result is a mixed picture for tenants affected by the under occupancy rules, both across Scotland in general and within local authority areas. For example, local authority tenants in an area may feel secure in the knowledge that they won’t be evicted if they do all they can to make up any shortfall between their rent and housing benefit , while housing association tenants in the same area may not have this security. While Shelter Scotland welcomes any commitment to not use eviction in the case of under occupancy arrears, a clear and consistent policy across all social landlords in Scotland, actively coordinated by the Scottish Government, would best benefit those affected—as we set out in our petition.
8. It would also be grossly unfair if tenants with under-occupancy arrears, who are evicted and made homeless, be deemed intentionally homeless by their local authority, consequently denying them the right to a permanent home. To mitigate the impact on homeless applicants, it would be beneficial to confirm across all Scottish local authorities that no-one will be deemed “intentionally” homeless due to under occupancy arrears. We suggested that this be led by the Scottish Government. Again, we regret that our suggested course of action has not been pursued.
9. To mitigate for the financial risk to social landlords due to welfare reform, the Scottish Government could set aside funds to protect landlords from bankruptcy resulting from arrears built up by the under-occupancy policy. In our petition we called for £50 million to be set aside by the Scottish Government for this purpose.
10. Planned use of discretionary housing payments (DHPs) is a key factor to mitigate for the effect of under occupancy reductions, and other housing benefit reforms. The UK government added £30 million to the pot of money available for tenants affected by under occupancy. However, DHPs are limited in that they cannot cover the shortfall for all tenants affected by housing benefit reductions. And even if they do, it is likely that they will only cover shortfalls for a limited period of time. Local authorities can add to their DHP allocation by up to 150%. As the financial impact of the under occupancy changes on local authorities is likely to be significant, both in respect of their own tenants and other pressures on their homeless services from tenants of other landlords, it is worth considering whether they are in a position to add to their DHP allocation from their own resources. 36 Hilary Burkitt, Head of Strategic Research, Affinity Sutton, “Escaping the bedroom tax” http://www.affinitysutton.com/news_ and_resources/public_affairs/policy_positions/our_opinions/bedroom_tax.aspx 37 Shelter Scotland campaign: “The Bedroom Tax is ill-thought out and we oppose it” http://scotland.shelter.org.uk/get_involved/ campaigning/bedroom_tax 38 See Highland Council’s commitment: “Council amend rent arrears policy to assist tenants affected by Bedroom Tax”, 11 April 2013, http://www.highland.gov.uk/yourcouncil/news/newsreleases/2013/April/2013–04–11–02.htm and Dundee City Council’s commitment: Scottish Government, “Advice for landlords on ‘Bedroom Tax’”, 18 April 2013, http://www.scotland.gov.uk/News/ Releases/2013/03/advice-for-landlords-on-bedroom-tax18032013 cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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Whether benefit reform is in danger of driving private landlords out of the low income rental market, thereby increasing shortages of rented accommodation 11. The combined impact of the various changes to local housing allowance (LHA) since 2011 has made private rented housing more unaffordable for tenants claiming housing benefit. Taking the example of the changes to the way LHA rates are set; previously they were based on the 50th percentile of rents in an area, this was reduced to the 30th percentile in 2011, rates were frozen in 2012 and uprated by the Consumer Price Index in April 2013 and will be uprated by only 1% in April 2014. Put simply, before the reforms were implemented around one in two properties in any area should have been affordable to a tenant claiming LHA. Now, this figure is around one in three properties at most. Furthermore, as the link between local rents and the LHA paid has effectively been broken, the protection for tenants from a potential spike in rents has been significantly weakened (there is an exemption from the 1% uprating for the most unaffordable areas, however, it is unclear how this will work in practice). Essentially, tenants claiming LHA in the private rented sector, whose rent is in the top two thirds of rent in their area are likely to fall into rent arrears. May 2013
Written evidence submitted by Carers Scotland 1. Carers Scotland is a charity set up to support the thousands of people who care for an elderly partner, sick friend or disabled family member. Carers Scotland is the Scottish nation office of Carers UK. Caring is part of life. Three in five of us will provide unpaid care for someone at some point in our lives. However, without the right support the personal cost of caring can be high with many carers experiencing poor health, poverty and disadvantage. Carers Scotland helps carers and campaigns to make their lives better.
2. Introduction and Background 2.1 Carers Scotland welcomes the opportunity to provide evidence to this Inquiry. The last year has seen major changes and carers and disabled people from across Scotland are starting to see the impact of the Welfare Reform Act 2013. Changes to financial support with housing alongside the cost associated with the economic downturn—a squeeze on wages, increasing costs of essentials like food and heating, increase charges for care services are all making it more difficult for carers to manage. — There are almost 660,000 carers in Scotland (six million in the UK) of which 375,000 are of working age. — 178,000 people become carers every year, with the same proportion ceasing their caring role. The population of carers is an ever changing one. — 110,000 people provide over 50 hours of care per week — People from lower socio-economic backgroundsi and in areas of multiple deprivationii are more likely to need and to provide care. — Unpaid carers and young carers are more likely to suffer poor physical and mental health, particularly those who are providing intensive levels of care. This affects their ability to care.iii — The role of carers is significant in the delivery of care and support. Currently the cost to replace the care provided by carers in Scotland would be more than £10 billion each yeariv (£119 billion in the UK). Carers are critical in enabling older and disabled people to live safely in their own homes and communities. — With a growing ageing population, the need for unpaid care will also increase. It is estimated that by 2037, there will be one million carers in Scotland.v — The main carers’ benefit is worth just £59.75 for a minimum of 35 hours. — One in five carers have given up work to care. Over half (60%) of carers who gave up work to care spent or have spent over five years out of work as a result.vi — Over half (58%) of carers are fuel poor and over a third (36%) are struggling to afford utility bills. 46% report cutting back on food and 48% have been in debt as a result of caring.vii
3. Carers and the Bedroom Tax 3.1 Changes to the size criteria in Housing Benefit are impacting on carers and families for whom an extra bedroom is essential. At this point in time, as the Committee indicated, evidence of the impact is limited but, anecdotally, carers have reported that they are already in arrears or are meeting the additional costs through benefits intended to support disability and caring costs such as disability living allowance and carers allowance, or through cutting back on essential as such as food and heating. 3.2 We do not, at present, have sufficient information to be able to assess exactly how many carers are affected. Census figures for Scotland may give us a better picture when information is published on the number of carers in Scotland and information on social housing tenure. These are expected in Summer and Autumn 2013. However, we do know from Scottish Government estimates that the size criteria will affect 105,000 cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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households in Scotland, 79% of which will have at least one adult with a recognised disability. A proportion of these households will have someone providing unpaid care. 3.3 Carers caring full-time for a severely ill or disabled partner often report that because of their condition or disability, a separate room for a carer to have a decent night’s sleep is vital. Affected families may also require additional rooms for storage of equipment or for care staff, such as personal assistants to utilise as office space. A room for an overnight carer is exempted but for many this is needed on a less frequent basis eg to provide care when less services are available over weekends, to be able to provide adhoc overnight care to someone with a fluctuating condition including mental ill health or for another family member or care worker to give the carer a break. “I have a severe mental health illness. When I did take ill, my mother would care for me in her own home until I was well again. My mother has since died and I have no longer any contact with other family members. If I was to take ill I would need my daughter to come and stay at my house to look after me until I made a recovery. I wouldn’t have the support of my daughter and grandchildren being able to come and stay overnight if I need care and support. I would probably end up having to be admitted to hospital costing more than it would to pay the bedroom tax.” “Because we are married, or if we lived as a married couple, common law etc. If he had a carer coming, that needed to stay overnight, then, and only then, would we be exempt.” “My son is autistic with mild learning difficulties. I am 78 years old and am his main carer. My son’s autism makes him ultra sensitive to sound, especially that of neighbours. After 20 years of anxiety and depression because of unsatisfactory accommodation, he has been very happily housed for 9 years in the perfect flat. It has a very small extra room for the added supported he needs on occasion and certainly when he loses me. The threat of him having to move if he can’t afford the increased rent is making him anxious. I dread a return to his former deeply distressing mental state.” 3.4 Whilst exemptions have been made for those with disabled children, many thousands of carers and disabled people now face extra costs for this essential accommodation. Forcing them to move is simply wrong. For families already struggling to make ends meet it could have devastating consequences. 3.5 Exemptions and discretionary housing payments will protect few of these families. For example, Carers UK analysis shows that the extra funding from Government to provide these “discretionary payments” to families hit by the policy will only protect 10% of the disabled people and their carers affected. “We are in sheltered housing which has been adapted. We have to pay £10 per week. All disabled people and carers should be exempted. This is putting a huge impact on our lives… will break up families and homes. We can’t cut back on food and heat.” “I am wheelchair dependent with a lot of health problems and my husband is going blind and has long standing foot problems. We need a room each and have to pay £10 per week. We never got a DHP. We can’t be in one bedroom—impossible.”
4. Tracking Impact 4.1 Carers Scotland and Carers UK are currently undertaking an exercise to track impact, asking carers about the “bedroom tax” and its impact on them. As noted by the Committee, the policy it is at early stages and therefore this evidence is currently being analysed. We shall provide a copy of this to the Committee as soon as it is available. However, to offer the Committee an early picture of some of these impacts, within this response, we have used some quotes from carers in Scotland who have written to tell us about their experiences.
5. Carers must be Exempted 5.1 Carers UK, along with a number of national charities wrote to the Chancellor to argue for exemption for carersviii setting out arguments that the policy did not recognise the nature or value of caring. Suggestions provided by the Government to those affected to respond to reductions in their housing benefit make little sense for carers.
5.2 Employment The UK Government has made it clear it does not want to force families to stop caring and into work—a situation that would place significant extra pressures on carers and would bring huge additional bills to local councils who would have to step in to provide care. However, presuming even a few additional hours of work were available, carers would require support from social care services which at this point in time are often only available at times of crisis or to those with critical care needs. Indeed, a quarter of carers already report the service available to them as being not flexible enough or not reliable enough to juggle work and care.ix
5.3 Moving to a smaller property 5.3.1 Government suggestions that carers and disabled people should simply move to a smaller property fail to recognise firstly, the additional space is essential and not “spare” so a smaller property would be unsuitable and that many carers have systems of family, friends and community supports in their area that help support cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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caring (whether they live with the person they care for or not). Moving away from these systems will result in carers facing a lack of natural supports, risking social isolation and a breakdown in care. Caring already has a significant impact on physical and emotional health for most carers. In our most recent study of carers,x 81% of carers in Scotland said that caring had a negative impact on their health and nine in 10 said that their mental health had been affected. Being forced to move, already a stressful life event, will only exacerbate the burden of care. I am full time carer for my wife. I am also registered disabled. We have to pay £151.92 on top of our housing benefit. Moving somewhere cheaper is not viable because of my wife’s mental health condition. We moved here to escape a hostile environment. Both myself and my partner look after our daughter who had cerebral palsy. She is unable to walk or talk and also barely sleeps at night. The spare bedroom is for either my or my partner to take turns each of getting up and down with our daughter as we have other kids in the house to care for so at least one parent is getting a proper night’s sleep. We are unable to work as our daughter needs 24/7 care. 5.3.2 Notwithstanding the personal emotional cost, there are costs involved in moving home for both the individual and the state. For example, if an individual is not on qualifying benefits for the Scottish Welfare Fund, there may be no source of financial help to assist with these costs, pushing carers who are already living on low incomes falling further into debt. This is deeply concerning, particularly as often those on the lowest incomes may have least access to affordable lending. 5.3.3 In addition, it is clear that there is simply a lack of smaller accommodation in the social rented housing sector in Scotland. For example, Inverclyde reported that 1,100 households would need to move into one- bedroom homes—of which just 96 had been free to rent last year.xi 5.3.4 This leaves few options open to carers apart from moving to privately rented accommodation. Yet this is not without additional cost to carers and local authorities. — Carers will face less security of tenure. — Carers will face additional barriers in managing their caring role safely, for example, ensuring that suitable equipment and minor adaptations such as stairlifts, handrails etc. are available in the property. Local authority social work departments will in general provide these but there are costs for assessment, supply and fitting and, it is likely that for some items, there may be a waiting list for supply. 5.3.5 Furthermore, the housing benefit costs for privately rented housingxii are more than that of average social housing rent (even without a deduction for under-occupancy). For example, in Glasgow local housing allowance (LHA) for a one bedroom flat is £91.15 per week whilst average rent for a two bedroom Glasgow Housing Association property is £60.07 per week. This is reflected across Scotland, for example: — Aberdeen LHA for a one bedroom property £121.15 per week. Average social housing rent for a two bedroom property is £69.30 per week. — Forth Valley LHA for a one bedroom property £84.23. Average social housing rent for a two bedroom property is £63.66 per week. — Highland LHA for a one bedroom property is £90 per week. Average social housing rent for a two bedroom property is £69.19 per week.xiii We do not have a full calculation of the potential costs of moving families from social to privately rented housing, however the following illustrates that for one family this would cost more than paying full rent for the social rented property. A carer and the person they care for in Aberdeen are being penalised by £8.45 per week for under- occupying their 2 bedroom house. Housing benefit paid is therefore £52.85 per week (£2,748.20 p.a.). Their actual rent is £3,603.60 per annum. They family moves to a 1 bedroom privately rented flat also in Aberdeen and are paid housing benefit equivalent to the average local housing allowance rates. Notwithstanding moving costs for the family and any adaptions required the cost per annum, housing benefit paid would now be £6,299.80 per annum. Rather than making a saving to the housing benefit budget, this would in fact cost an additional £3,821.60 each year (£2,686.20 if full housing benefit was paid).
5.4 Taking in a lodger 5.4.1 We have concerns over the suggestion that disabled people and their carers should take in lodgers to offset the amount lost because of under-occupancy. We believe that in many situations this would be completely inappropriate. By the nature of their disability or illness, a proportion of those receiving care would be described as vulnerable and those working with them, for example, in health or social care are expected to be checked by Disclosure Scotland and/or the Protection of Vulnerable Adults Scheme. Yet, there appears to have been no recognition of protecting vulnerable adults, or indeed children, in the under-occupancy policy. For example, would potential lodgers be expected to provide appropriate disclosure and, if so, who would organise and pay for this? cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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5.4.2 Furthermore, it is unclear what effect rental income received by the tenant would have on their existing benefits nor whether local authority or housing association rules would allow for sub-letting or whether tenants would be in breach of their tenancy.
5.5 Discretionary Housing Payments As noted earlier in this response, discretionary housing payments are limited and likely to meet only a fraction of need. In addition they are time limited, only guaranteeing carers and disabled some respite from worries for a period of up to a year. In 2014, or earlier, they will have to reapply and face the same concerns again.
6. The Worst is yet to Come 6.1 The main benefit for carers, Carer’s Allowance, is linked to the benefits of those they care for—currently Disability Living Allowance, which is to be gradually replaced by Personal Independence Payment (PIP) from April. Previous indications from Government were that, despite a planned 607,000 cutxiv to the numbers of disabled people receiving financial support in the UK, the introduction of Personal Independence Payment “will not affect” numbers entitled to Carer’s Allowance.xv However, the last minute publication of a Department for Work and Pensions assessment in February 2013xvi showed that 10,000xvii fewer carers in the UK will be entitled to Carer’s Allowance by 2015. 6.2 In the current year, some carers and disabled people may be able to find the difference between their housing benefit and actual rent or, as noted earlier, receive a discretionary housing payment for up to a year. However, many simply cannot do so and are stretched to their limit. Carers already report cutting back on food (46%) and heating (48%) as a consequence of the costs of caring prior to cuts to housing benefit. “Losing this amount of money every month is having a huge impact on our household budget. My wife’s medical conditions dictate that she should follow certain dietary controls which we’ve all but had to abandon as to adhere to them would prove too costly.” “I now have to pay a third of my carers allowance in order for me to have bedroom in which I can get a good night’s rest so I can continue to save the Government in excess of £100 billion every year.” 6.3 Furthermore, the costs of living have increased above inflation and there is no sign of this slowing. Although disability and carer benefits are not capped, other household benefits such as income support will be capped below inflation. Taken together, carers will not be able to continue to reduce expenditure on food or heating or use funds intended for care support to fund housing costs in the long term. 6.4 Moreover, further implementation of welfare reform is projected to result in a huge loss of income to thousands of disabled people and their carers in Scotland. Taken alongside increased charges for care services, increases in the cost of living and reductions in housing benefit, the cumulative effect will be devastating for families.
7. Conclusion 7.1 Carers Scotland believes that the changes to housing benefit are deeply unfair to carers and those they care for. We believe that these changes are unsustainable for families and instead of providing savings, as outlined above, have the potential to increase financial costs to the state. The costs to carers and disabled people will be far greater however, with impacts on health, wellbeing and sustainability of unpaid care. 7.2 Replacing the care provided by just one carer will cost the state £15,151 each yearxviii—far more than any under-occupancy charge. Worryingly, if even a third (5%) of the 17% who reported that they will give stop caring because of the bedroom tax, actually give up care, this may cost the state in Scotland over £400 million per year to replace. A full impact assessment considering all changes for carers and disabled people, including devolved issues such as care availability and charging for services, and their unintended consequences is essential.
References i EHRC, How Fair is Britain (2010) ii Scottish Government & CoSLA, Caring Together—The Carers Strategy for Scotland (2010) and Scottish Household Survey iii Carers Scotland & Carers UK: Carers in Crisis (2008) iv Carers UK: Valuing Carers (2011). In the UK as a whole the cost to replace care provided by carers would be £119 billion. v Carers UK: It Could Be You (2001) vi Carers UK: State of Caring (2013)—Figures for Scotland vii Carers UK: State of Caring (2013)—Figures for Scotland cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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viii http://www.carersuk.org/newsroom/item/3001-government-must-exempt-carers-from-%E2%80%98bedroom- tax%E2%80%99 ix Carers UK, 2013: State of Caring 2013 x Carers UK, 2013: State of Caring 2013 xi False Economy, 27 May 2013: www.falseeconomy.org.uk xii LHA’s in Scotland are considerably less than those in, for example, London. For example, one bed in Central or Inner London is £244.50 per week. xiii A study by the National Housing Federation, which represents housing associations, warned ministers that families unable to get a one-bedroom social home all moving to the private rented sector could increase benefit claims by £143m a year—despite government claims the policy will save money. xiv Personal Independence Payment: Reassessments and Impacts (December 2012). Department for Work and Pensions—shows that, by 2018, the introduction of Personal Independence Payment will result in a fall from 2,182,000 (under the current system of Disability Living Allowance) to 1,575,000 (under Personal Independence Payment) in the number of disabled people entitled to support. xv Disability Living Allowance Reform: Impact Assessment (May 2012). Department for Work and Pensions xvi a) The Impact Assessment published on 8th February is available at www.dwp.gov.uk/docs/pip-briefing- carers-allowance.pdf. It shows that: Of 76,000 Carer’s Allowance claimants attached to Disability Living Allowance claims being reassessed by 2015—50,000 will retain Carer’s Allowance; 25,000 will no longer be entitled to it and it is expected that 20,000 would become entitled to it. This leads to a net reduction of 5,000. When new claims are taken into account the Impact Assessment shows that under the current system, Disability Living Allowance, in 2015 297,000 carers would be entitled to receive Carer’s Allowance but under the replacement benefit Personal Independence Payment the Government estimates this will be 287,000. A 10,000 net reduction. b) As an ageing population and people living longer with disabilities means increasing numbers of families need to provide care, year on year the numbers needing Carer’s Allowance have risen since the introduction of the benefit. The average increase since 2003 has been 21,000 each year, yet these new figures show that, by 2015 10,000 fewer will receive support. c) The Government’s assessment that 10,000 fewer people being entitled to Carer’s Allowance amounts to the loss of the benefit at £59.75 a week, £3,107 a year; a total reduction of £31,070,000 in spending on Carer’s Allowance. xvii The 10,000 figure consists of families losing Carer’s Allowance and new claims by carers who would be entitled under the current system of Disability Living Allowance but who would not be entitled to Carer’s Allowance under Personal Independence Payment. xviii The estimate of the value of carers’ contribution is based a unit cost of replacement care as £18 per hour. Unit cost for adults and older people receiving home care—NHS Information Centre, PSS EX1 Return for 2009–10 May 2013
Written evidence submitted by Parkinson’s UK 1. Summary 1.1 Parkinson’s UK is extremely concerned by the growing evidence that the bedroom tax and other changes to housing benefit will disproportionately affect people with Parkinson’s and calls on the government to exempt disabled adults and their carers. 1.2 Parkinson’s UK notes the Committee’s calculation that four in every five Scottish households affected by the bedroom tax include someone with a recognised disability. The recent report published by the Scottish Parliament’s Welfare Reform Committee, The impact of Welfare Reform in Scotland, recently confirmed not only that households containing disabled people were more likely to be affected by the bedroom tax, but that the same individuals were simultaneously at risk of losing disability benefits such as Disability Living Allowance/Personal Independence Payment and Incapacity Benefit/Employment Support Allowance. The report calculates that an average individual adversely affected by changes to DLA/PIP in addition to IB/ESA and also affected by the bedroom tax will lose in the region of £7,500 each year. 1.3 We also note the recent work by Carers UK, which highlights that 10,000 UK carers will lose their entitlement to carers’ allowance as a result of the transition from DLA to PIP. 1.4 The emerging picture is that some households containing disabled people, including people with Parkinson’s, will lose significant amounts of benefit income at the same time as being asked to find additional money to meet the new housing charges. cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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1.5 In addition, the change to paying housing benefit directly on a monthly basis under Universal Credit will place some people with Parkinson’s at significant risk of getting into arrears. 1.6 Parkinson’s UK believes that this demonstrates the need for HM Government to undertake a Cumulative Impact Assessment of Welfare Reform.
2. Underoccupancy Charge 2.1 People with Parkinson’s tend to be older, and include people who are still of working age who have larger properties because they’ve brought up their families and the children have since “flown the nest”. We are also aware of cases in Scotland where people had bought their property some years previously, but have had to sell it back to the local authority when they became unable to meet their mortgage commitments because of financial hardship due to their Parkinson’s. Some people have had expensive adaptations made in order to render their homes accessible, safe, and future-proofed in light of their progressive condition. 2.2 Many people would be prepared to move, but there are no smaller properties available in their local area. We are hearing from people who will be financially penalised because they cannot move for reasons beyond their control—because of housing stock supply, or for reasons related to their Parkinson’s. 2.3 The recent announcement by the Department of Work and Pensions that would exempt disabled children from incurring this penalty was extremely welcome. However, the issues that affect disabled children can also affect disabled adults. Parkinson’s UK would like to see this exemption extended to disabled adults and their carers. 2.4 We welcome the decision of some councils to adopt “no eviction” policies for people who have accrued arrears due to the bedroom tax. However, we are concerned that: — there is no national policy in place; — some policies are time-limited (eg Dundee City Council is limited to one year); — local authority tenants living in areas where the council has not adopted such a policy have no protection; and — no housing association tenants will be protected.
3. Shortage of Discretionary Housing Payments 3.1 It is becoming very clear that the amount of money allocated by local authorities in Scotland for discretionary payments is insufficient to meet the need of individuals and families who are unable to move home. 3.2 We are hearing that local authorities are using stringent criteria to allocate these limited monies to those in crisis. In practice, those receiving disability benefits such as DLA are being expected to allocate these to meet the underoccupancy charge, despite the fact that the DLA is intended to meet other additional costs associated with the recipients’ disability.
4. The Impact on Caring 4.1 The current regulations stipulate that a spare room is exempt if it is used by an overnight carer coming to stay on a regular basis. The exclusion of those who need a spare room for their cohabiting carer is deeply unfair. 4.2 One of the more common symptoms of Parkinson’s is difficulties with sleeping. This can include both vivid nightmares, which can cause the person to lash out in their sleep, and also involuntary movements, such as kicking or hitting out. 4.3 This can cause difficulties for partners and we have been told of accounts of people with Parkinson’s inadvertently punching or kicking their partners in their sleep. As a result, a spare bedroom can represent a vital reprieve from this situation. As many people with Parkinson’s receive care from their partners, a good night’s sleep is vital for both parties. 4.4 Similarly, for those that live alone, they may wish to have a spare bedroom for paid carers to stay overnight if needed or for friends or family who may provide occasional support at night. They may fall foul of the rules because they are not doing so on a “regular basis”, although the government has not clarified what is meant by “regular basis”. 4.5 Case study 4.5.1 Parkinson’s UK in Scotland has recently been approached by a couple, where the wife has given up work to provide full time care for her husband who has had Parkinson’s for 18 years. They moved to their two bedroom, ground floor flat a couple of years ago because their occupational therapist advised them that they needed a wheelchair-adapted home because of the husband’s mobility needs. cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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4.5.2 The wife typically gets up several times in the night to meet her husband’s care needs, but usually uses their spare bedroom to avoid additional disturbance to her sleep from her husband’s Parkinson’s symptoms. 4.5.3 The couple were assessed by their local council and advised that they would not qualify for a discretionary payment to meet the cost of the underoccupancy charge. They are appealing the decision. 4.5.4 The couple feel that this policy is cruel. They believe that effectively penalises them for being together, and the wife providing unpaid care for her husband. They believe that it is perverse that if they were to separate, the husband would be able to stay in their home without incurring the bedroom tax because the “spare” bedroom would then be needed to enable a paid carer to stay overnight. 4.6 The policy sends a clear message that HM Government does not value carers—despite the money that unpaid carers save the economy, and the individual sacrifices they make to do so, which often include giving up work and the salary and job satisfaction that go with it. In the worst case scenario, it could result in couples splitting up, and in some cases the person will need additional paid care as a result. In some cases this could mean an expensive admission to a care home. 4.7 It is not enough for HM Government to say that discretionary housing payments provide the reassurance needed for carers, given that the amount allocated is insufficient to meet demand, and that the payments are made on the basis of councils’ discretion rather than assessed need against transparent criteria.
5. Adapted Homes and the Under-occupancy Penalty 5.1 Another issue that may arise is where people have had their homes adapted—for example installing step- in showers or baths. If people who have had their homes adapted then decide to move rather than incur this penalty, the new home would then require these adaptations to be reinstalled. This cannot be seen as an efficient way of spending time and resources to move people out of homes which meet their needs into new homes which do not and subsequently have to also be adapted.
6. Working Age/Pension Age Couples 6.1 For couples where one is of pension credit age and one is of working age, it is helpful that HM Government has confirmed that their household will be exempt from the rules as of April 2013. However Universal Credit rules which are introduced in October 2013 cause complications, as for mixed age couples the household is treated as working age, and so appear to “fall back” under the rules for under-occupancy. The UK Government has said that those at risk will be exempt but appeared to say it would be those where one of the couple is already in receipt of pension credit, rather than simply being of pension credit age.
7. Preparing for the Future with Parkinson’s 7.1 Parkinson’s is a degenerative condition, for which there is currently no cure. 7.2 People with Parkinson’s have raised significant concerns with us about how their future needs will be able to be met in a different property, for example: — people who currently live alone, but who expect to need overnight care as their condition progresses; — people who do not currently use a wheelchair but who are likely to do so in the future; — people whose home is likely to require future adaptations; — people who currently receive unpaid care from non-resident family, neighbours and friends, who may not be able to provide this care if the person is no longer close by; — people who have planned to live close to family and friends who can provide unpaid care as their needs increase; and — people who receive support to live well with Parkinson’s from locally based health and care professionals who understand , such as GPs, specialist nurses, community health and social care workers and pharmacists. Moving home could mean having to build a new set of relationships with professionals which is unhelpful when dealing with a complex and very individual long term condition like Parkinson’s. 7.3 Case Study 7.3.1 Man with Parkinson’s, Southern Scotland 7.3.2 “I recently separated from my partner of nearly 20 years, partly because of the stress that Parkinson’s has put on my family life and relationships. It has been a very difficult time for all of us, but we have maintained regular contact and my ex-partner and I continue to share the parenting of our children. It has been made worse by the fact that I have had to apply for some different benefits, and in particular the underoccupancy charge/ bedroom tax...” cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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7.3.3 “I have lived in my home for 25 years. We had to sell it back to the council because of financial hardship.” 7.3.4 “I was shocked when a council employee phoned and told me that my housing benefit would be cut to the equivalent of a one bedroom home and that I would have to find the additional money from my benefits to pay for two bedrooms. I was stressed enough about how I was going to pay for my heating, food, transport and other necessities, and this information floored me.” 7.3.5 “When I asked for more information, the council employee told me that I had three options: (1) The council could look at re-homing me in a one bedroom flat. There are very few of these in my home town, so I might be relocated somewhere else, which could be many miles away. This would put me away from my support system—including my friends and family, and the health centre that deals with my day-to-day health needs, where the staff know me and are able to give me the help I need. And I might not even be able to access a one bedroom flat in another town as there are lots more people needing one bedroom homes than there are flats available. (2) They could also look at house sharing with someone else who was on benefits. This would mean sharing my home with a stranger whose background I didn’t know, and possibly exposing my children and myself to risks. (3) That if I did stay in my house I would have to find the shortfall in the rent myself from my other benefits.” 7.3.6 “I asked the person on the phone about how I could have my daughter (and expected grandchild) or my disabled son to come and stay with me if I moved to a one bedroom flat, or shared my home. I asked where were they were expected to sleep, and was told ‘have you never heard of inflatable beds?’ This took my breath away. I was literally speechless that the love and support of my children and their need to spend quality time with their father could be so casually dismissed.” 7.3.7 “I also enquired about what happens when my Parkinson’s gets worse—as Parkinson’s is an incurable degenerative disease, I will progressively become more disabled and I am likely to need more support over time. Because I am no longer with my ex-partner, I may need a live-in carer to support me. I asked where a carer would stay. The reply was ‘we can cross that bridge when we come to it.’ So I may now be unable to make any plans for the future until I am really unwell when I might not be able to access the type of accommodation I would need.” 7.3.8 “I was stunned by the lack of sympathy and understanding for people in my position. I am so anxious about the whole situation, and I am concerned about the effect that this is having on my Parkinson’s.”
8. Issues Around Universal Credit, Budgeting and Rent Arrears 8.1 Under Universal Credit, people will be paid their housing benefit directly on a monthly basis along with other benefits. 8.2 Disabled people, including those with long term conditions such as Parkinson’s, typically have much higher living costs than non-disabled people, and it is common for people to struggle to apportion their spending when budgets are tight. 8.3 Although many people with Parkinson’s are as able to budget and plan as people without the condition, some people with Parkinson’s are at particularly high risk of budgeting problems. This is because mental health, cognitive and behavioural issues are common in Parkinson’s. Issues can be caused by the condition itself and the medication used to treat it. All of these can have a very significant negative impact on people’s ability to budget and plan. 8.4 Mental health symptoms such as depression, anxiety and mild psychotic symptoms typically affect up to 50% of people with Parkinson’s at any given time. 8.5 One in three people living with Parkinson’s have dementia. In Parkinson’s dementia, people’s executive planning functions (which are needed to budget and think ahead) are significantly affected from the start, often long before cognitive issues are diagnosed. 8.6 Impulsive and compulsive disorders are also common. An estimated 17% of people who take dopamine agonists to treat their Parkinson’s, and 7% of those using other Parkinson’s medication, develop compulsive shopping, gambling, hypersexuality or overeating. 8.7 Evidence from the DWPS pilot projects suggest that monthly housing benefit payments have led to huge increases in housing arrears—the BBC reported in March that in the Edinburgh pilot the arrears rate rose by 30%, and in Wales there was a 50% increase in households in arrears. cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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8.8 Parkinson’s UK believes that it will be very hard for local authorities and housing associations to separate bedroom tax-related arrears from rent arrears in general. This may undermine “no evictions due to bedroom tax arrears” policies in the councils that have adopted them. 8.9 In addition, for people who are already struggling to make ends meet, having a poor credit rating as a result of rent arrears is very likely to drive vulnerable people into dangerous levels of additional debt through payday loans and loan sharks.
9. About Parkinson’s 9.1 About 10,000 people in Scotland people have Parkinson’s. 9.2 Parkinson’s is a progressive, fluctuating neurological disorder, which affects all aspects of daily living including talking, walking, swallowing and writing. People with Parkinson’s often find it hard to move freely. Their muscles can become stiff and sometimes they freeze suddenly when moving. There are also other issues such as tiredness, pain, depression, dementia, compulsive behaviours and continence problems which can have a huge impact on peoples’ day-to-day lives. The severity of symptoms can fluctuate, both from day to day and with rapid changes in functionality during the course of the day, including sudden “freezing”. There is no cure. 9.3 Parkinson’s affects people from all social and ethnic backgrounds and age groups. The average age of onset of Parkinson’s is between 50–60 years of age, and the incidence increases with age. One in seven people with Parkinson’s will be diagnosed before the age of 50 and one in twenty are diagnosed before the age of 40.
10. About Parkinson’s UK 10.1 Every hour, someone in the UK is told they have Parkinson’s. Because we’re here, no one has to face Parkinson’s alone. We bring people with Parkinson’s, their carers and families together via our network of local groups, our website and free confidential helpline. Specialist nurses, our supporters and staff provide information and training on every aspect of Parkinson’s. As the UK’s Parkinson’s support and research charity we’re leading the work to find a cure, and we’re closer than ever. We also campaign to change attitudes and demand better services. Our work is totally dependent on donations. 10.2 In Scotland, we have a dedicated staff team and more than 40 volunteer-led local groups supporting people affected by Parkinson’s. 10.3 Find out more about us at parkinsons.org.uk June 2013
Written evidence submitted by Renfrewshire Council 1. Key Issues Impact of the Welfare reform and is the policy coherent and enable access to housing? 1.1 Renfrewshire Council continues to express concerns that the reforms, in particular the reforms to support for housing costs being considered by this inquiry, will exacerbate poverty for the most vulnerable individuals and families. 1.2 The Renfrewshire area includes the Ferguslie area of Paisley, the single most deprived datazone in Scotland (see the Renfrewshire context—Appendix 1, A). This area and other more vulnerable communities in Renfrewshire already face significant challenges and the measures being introduced by the UK Government will lead to increased financial stress for households and create additional service pressures arising from demand for welfare, debt and money advice, additional family distress and increased homelessness presentations. 1.3 From the Council’s perspective there are clear financial risks relating to the management and sustainability of the Housing Revenue Account (HRA). These are linked to increases in rent collection costs and bad debts associated with an increasing requirement to collect rent as a result of reducing benefit levels available to tenants and proposals for housing benefit payments to made directly to the claimant under the proposed Universal Credit system. 1.4 Additionally, the Council is concerned that the make up and availability of housing stock at local authority level does not appear to have been taken into account when introducing the under occupancy reduction. (Appendix 1, B) refers. This places significant challenges for social landlords, including Renfrewshire Council where there is a mismatch between the housing requirements of tenants affected by the under occupancy reduction and the benefit cap and the availability of suitably sized stock. 1.5 Renfrewshire Council anticipates a number of potential impacts on its statutory duty in relation to homelessness as a result of the Housing Benefit changes. In particular, the application of the under occupancy reduction to local authority owned stock used to temporarily accommodate people presenting as homeless, while exempting other tenures of property used, does not recognise the effective use that is made of LA owned cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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accommodation to meet such emergency accommodation needs. The loss of housing benefit and the resulting increase in rent arrears may ultimately lead to increased housing benefit costs as the council may be forced to consider greater use of the private sector provision, where rent levels may prove to be higher, in order to meet its statutory duties in relation to homelessness and protect against financial loss to the Council. 1.6 The proposed introduction of direct payment of housing costs within Universal Credit is expected to lead to greater financial stress for households and individuals and will place extreme financial pressures on the long term sustainability of social housing where households are unable to budget appropriately and manage the ongoing responsibility of sustaining their rent payments.
Powers available to mitigate and are they being used effectively? 1.7 Renfrewshire Council has deployed significant additional resources of £1.3 million in 2013–14 and beyond to provide the Council with the best opportunity to prepare for and manage the anticipated increase in demand for services. Much of this investment is directed towards advice and support to ensure the Council is well placed to both support the tenants and their families manage the impact of welfare change but also to seek to pro-actively protect the financial position of the Council’s housing function, in particular the sustainability of its rental stream during this transition. 1.8 Renfrewshire Council has formally recognised that where tenants subject to the under occupancy reduction are actively engaged with the Council and are taking reasonable steps to maintain a rent repayment arrangement the council will continue to pursue rent due without resorting to eviction. However, it needs to be recognised that increasing rental arrears ultimately places significant financial pressures on the Council’s Housing Revenue Account which will in turn increase the associated future rental costs for social housing within Renfrewshire. 1.9 In recognition of this, the Council has in addition, agreed to set aside £850,000 from the Housing Revenue Account (HRA) for 2013–14 to help mitigate the impacts of welfare reform on Council tenants, part of which will be targeted at providing a scheme of financial support for tenants experiencing hardship. Given the close links with the Department for Work and Pensions (DWP) Discretionary Housing Payment (DHP) scheme, options for criteria for the HRA financial hardship support scheme are being developed taking account of the circumstances and outcomes of applications made by tenants for DHP. However, it is recognised that both schemes will provide only temporary support and relief for affected tenants. 1.10 The integration of housing officers to neighbourhood area housing teams has also been taken forward by the Council in order to support ongoing tenancy management activities, focus on arrears prevention and recovery activity and respond to the anticipated increase in demand for housing related advice and assistance that will be required as a result of the emerging changes. 1.11 In addition, Renfrewshire Council has increased its top up funding to DHP resources by 150% by allocating an additional £150,000 to the DHP fund for 2013–14 in recognition that the DWP resources are insufficient to provide the necessary short term support to affected citizens across Renfrewshire. The enhanced fund will help defray the loss of Housing Benefit and provide tenants with short term support that will allow them to meet their rent obligations while considering other options. 1.12 Renfrewshire Council also continues to take a proactive approach to managing the introduction of the welfare changes and is engaged at officer level with COSLA and Scottish Government on preparing and responding to emerging issues. Additional funding streams in relation to the provision of advice services has been released by Scottish Legal Aid Board (SLAB) and Renfrewshire Council seeks to work with partner organisations to maximise the funding for advice support in Renfrewshire
Impact on private landlords and availability of rented accommodation 1.13 Both local authority and RSL housing stock is in significant demand as evidenced by the waiting lists, owner occupation is very difficult to access at present due to high purchase prices, the requirement for large deposits and the lack of availability of mortgage finance. The Council is already aware that tenants impacted are Housing Benefit claimants and this is unlikely to be an option available to them. 1.14 In Renfrewshire a Housing Options approach is in place; as part of housing advice services, tenants and applicants are given an overview of all housing options available to them, including discussions around alternative tenures including the private rented sector. 1.15 The private rented sector is relatively smaller compared to other tenures and wider welfare reforms will also make this sector more difficult to access. Tenants leaving their current homes may end up staying with family or friends or present as homeless putting greater pressure on existing services. 1.16 Shelter Scotland, have indicated that people judged to be under-occupying in the social sector and who can’t afford the shortfall, will be forced with the choice to downsize or run up arrears. Due to the widely recognised chronic shortage of one-bedroom social houses, the charity says many will have to turn to the private rented sector. In Renfrewshire the existence of the required number of one bed room private rented properties is questionable. cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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1.17 As highlighted in tables 1 and 2 in Appendix 1, rent for a one-bedroom property in the private sector is on average higher than rent for a two-bedroom social property. Tenants electing to transition to a private tenancy as means to alleviate the impact of under occupancy rules on a social tenancy, would qualify for full Local Housing Allowance (LHA) as they would no longer be assessed as under-occupying—perversely this would be costing the public purse more in terms of providing housing costs support than it would to provide full benefit support for a social rented property without any associated under occupancy reduction..
2. Impact of Specific Welfare Reform Measures Under occupancy reduction 2.1 The removal of the spare room subsidy, under occupancy reduction, as it is more commonly known, has introduced deductions from housing benefit on tenants who are deemed to have more bedrooms than they need. As referred to earlier, options for tenants in this situation are limited as the housing stock in the area does not match the associated demand for smaller one bedroom properties and with many affected tenants advising the Council that they have no way of making up the shortfall. 2.2 At the point of implementation of the under occupancy reduction, a total of 1,960 Council tenants lost £1.2 million a year in housing benefit (as detailed in table 3, Appendix 1) and 1,100 Housing Association tenants lost £0.6 million a year in housing benefit. It is anticipated that a major component of this loss in benefit will lead to a reduction in rental income for both the Council and Registered Social Landlords (RSLs). 2.3 Based on data from April 2013, the first month post implementation of the under occupancy reduction, only 25% (493) of households affected by the changes have no rent arrears. The increase in rent arrears since the start of the financial year and introduction of the under occupancy reduction is £54,000. This is despite the proactive attempts of the Council to inform and support tenants through the changes and places significant financial risks on the potential to recover unpaid rent going forward. 2.4 The 2013–14 HRA Business Plan includes an anticipated increase in the level of budgeted bad debt provision from 2.5% to 3.5% (c£400k increase) and 5% (c£600k increase) thereafter. In addition, previously anticipated staffing savings of £300k in 2015–16 and £200k in 2016–17 have been removed from the HRA Business Plan to reflect the anticipation of increasing service pressures to support tenants and address growing rental arrears. In addition to this, further budgeted resources of £331,000 per annum have also been built in for 2013–14 and moving forward to provide the necessary staffing resources that are anticipated, as best can be at this point, to be required to provide these additional services and manage the additional service pressures. Any increased costs or reduction in income for 2014–15 to 2017–18 will be built into future Business Plans once increasing certainty is established over the emerging impact of the under occupancy reduction and the wider reform agenda. 2.5 Housing Benefit paid to tenants in the private rented sector is based on Local Housing Allowance (LHA) rates. The LHA rates in Renfrewshire are higher for all property sizes than in the social rented sector. As referred to above, it is anticipated that a counter-productive consequence of the under occupancy rules will see some tenants under occupying in the social sector, electing to move to the private sector and receive an increased amount of housing benefit for a smaller sized property. 2.6 Renfrewshire Council also expects a number of possible impacts on homelessness generally which are anticipated to emerge as a direct result of the HB changes. These include pressure on the proportion of lets to homeless applicants due to an increase in transfer requests from existing tenants in receipt of housing benefit who are under-occupying their homes—this may in turn lead to an increase in the length of time taken to complete the local authorities duty to house those who are unintentionally homeless, and an increase in the need to provide (and fund) temporary accommodation—it should be noted that even those who are deemed to be intentionally homeless can require to be provided with temporary accommodation. 2.7 Renfrewshire Council has always recognised the housing circumstances of Council tenants and tenants seeking to transfer are given a proportion of available lets within the current allocation policy. While no decisions have yet been made, the Council is currently considering the options in relation to varying this policy to further recognise the needs of tenants arising from the UK Government reforms. Other considerations include the promotion of mutual exchange, property classification and the protection of limited supply.
3. Benefit Cap 3.1 While numbers affected by the benefit cap within Renfrewshire are low (29), for the affected larger families this poses significant concern. The annual reduction in housing benefit paid to these households is currently estimated as £106,384. Input from DWP and other agencies, including the Council will be required to provide support to the families in relation to employability and housing options.
4. Support and Exempt Accommodation 4.1 Discussions have commenced with the Council’s commissioned housing support providers to look at current service specifications; current housing support provision; current housing management provision to determine what changes need to be considered when developing new tenders for these commissioned services. cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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In the future housing support and housing management must be much more clearly aligned within service contracts to ensure supported accommodation projects are sustainable. While the DWP has indicated that they wish to better understand the supported housing sector and the impact of housing benefit in the sector in order to protect existing provision from the unintended consequences of welfare reform, until this work is concluded risks remain in relation to supported housing provision.
5. Temporary Accommodation 5.1 Under occupancy restrictions are being placed on HB recipients placed in Council owned temporary accommodation. This is not the case where tenants are placed in privately sourced/leased accommodation used for this purpose. In Renfrewshire 88% or 147 out of 167 properties used to house people presenting as homeless are council owned therefore this potentially places an additional burden. The majority of households living in temporary accommodation receive housing benefit and are placed in accommodation arising from an urgent need rather than a strict adherence to size criteria. 5.2 Renfrewshire Council recognises its duty to minimise homelessness and protect the vulnerable. In the short term, the impact of the HB reduction will in effect create a benefit gap which is unlikely to be passed on to homeless people temporarily lodged in accommodation. This is a new burden and a form of cost shunting from the DWP to local authorities which has the direct impact of diverting already stretched Council resources away from other priority areas in order for the Council to protect the most vulnerable of clients from what is seen as an unintended consequence of welfare changes. However, it is recognised that this action taken by the Council will not be sustainable in the long term and addressing this unintended and unfair consequence of the reforms on the most vulnerable of individuals is something which the Council continues to lobby the DWP for through a range of routes. 5.3 In addition, it is intended that housing costs for short stay tenants will be included in Universal Credit at LHA rates and paid direct to tenants. There will also be a management element, or overhead, however the method to be applied has yet to be determined. The Council has significant concerns over the underlying logic of this approach which is expected to place significant pressure on already extremely vulnerable clients and it is fully anticipated that a very high level of non payment of associated rent will occur as a consequence. An estimated non-recovery of £581,000 in annual rental income relating to the direct payment of the Housing Benefit element to short stay tenants through Universal Credit is expected to have an impact on the Council’s ability to provide Short Stay, temporary accommodation. 5.4 Work is ongoing to look at the current modelling of temporary and supported accommodation to determine the future viability of the current model of service delivery, which at present proves to be highly effective at meeting the immediate needs of vulnerable individuals and families. The Council is also looking at developing other options within the private sector to ensure single households have sustainable and affordable temporary housing options in accommodation that is the correct size and meets their needs. The Council is currently carrying out scoping exercises of empty buildings and cost analysis on buildings that could potentially meet the Council’s requirements moving forward. However, it is recognised that such potential re-modelling of service delivery comes with the risk that what is subsequently put in place fails to deliver an equivalent level of service, impacting once again on some of the most vulnerable in our society.
6. LHA Changes 6.1 During 2012–13 the Council supplemented the DHP fund by giving a total of £168,000 and over the last year Renfrewshire Council actively supported private sector tenants impacted by the LHA changes. Tenants were contacted and invited to apply for a Discretionary Housing Payment as a means of providing short term support to allow them time to consider their options or seek alternative accommodation. Overall £104,000 was awarded to tenants in private rented accommodation with £26,000 of this arising from the direct contact made by council staff to tenants affected by the LHA changes. The Council continues to support these customers however with the scale of the changes for social sector tenants the DHP fund is expected to be under significant pressure as the year progresses therefore it is anticipated that there will be less scope to provide a similar level of assistance to affected tenants.
7. Changes to Non-dependant Deductions 7.1 The Council recognises that non dependent adults living in a property are expected to make a contribution to housing costs, based on income. The increase in non dependant deductions over the last two years places additional pressures on landlords in collecting the balance due from non dependants and with the introduction of the under occupancy means that the presence of a non dependant can lead to the need for detailed benefit advice. Households with non dependants have been beneficiaries of DHP payments over the last year.
8. Discretionary Housing Payments 8.1 Discretionary Housing Payments (DHP) provide claimants with additional financial assistance with housing costs, in addition to any welfare benefits, where a local authority considers that further help is required. The DWP allocate the fund to councils and councils can, under the legislation, consider adding to this fund up cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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to a maximum of 2.5 times the DWP allocation. In short to medium term a DHP award is likely to be one of a limited number of options open to support tenants. 8.2 The UK Government increased the overall DHP fund to help mitigate some of the short to medium term impact of the Housing Benefit changes. The Renfrewshire allocation has increased from £74,464 in 2012–13 to £251,000. The DWP has advised that this increased level of discretionary funding is to be targeted at mitigating the impact of the under occupancy reduction, the benefit cap and the impact on temporary accommodation after the introduction of Universal Credit. 8.3 In the last two financial years the Council has approved additional top up DHP funding of £60,000 in each year. The UK Government allocations were £52,314 in 2011–12 and £74,464 for 2012–13. 8.4 In addition to the DWP allocation for 2013–14 of £251,000 the Council has approved additional top up support for the DHP fund by £150,000 (150% of previous year) from its own resources bringing the total support available to £401,000 to provide tenants with short term support that will allow them to meet their rent obligations while considering other options. While the Council took this necessary step it is recognised that this will not address the loss of benefit of £1.9 million across all housing providers in relation to the under occupancy alone. 8.5 Early data on DHP awards since April 2013 highlight that 92% of the awards are being made to tenants affected by the under occupancy reduction, with households unable to move for health reasons and families where an extra room is required for access to children benefiting most.
9. Universal Credit—Direct Payment of Housing Support Costs 9.1 While it is noted that the main focus of this inquiry is in relation to HB changes, Renfrewshire Council would like to take the opportunity to draw the Scottish Affairs Committee’s attention to another significantly concerning aspect of the UK Government welfare changes linked to the introduction of Universal Credit— direct payments. The Council view this proposal as the biggest single financial risk to the long term sustainability of housing services within Renfrewshire. It breaks the existing arrangement of housing benefit support being paid direct to the landlord and places responsibility on individual tenants to manage their overall finances and sustain on an ongoing basis payment of their rent. It is the Council’s view that although many tenants will, with appropriate support from the Council, transition to this new arrangement, a large number will struggle which will inevitably lead to a significant increase in rent arrears, placing increased financial pressures on social landlords and longer term rental levels. 9.2 Emerging findings from the DWP Demonstration projects highlights the increase in the level of non payment of rent and where rental income is being recovered, this is at a significant cost to the social landlords involved—a cost that DWP do not at this stage appear willing to support. Given the limitations of the demonstration projects concerns remain over the long term impact of direct payment and the cost of supporting tenants to make payment and the impact on household incomes and social landlord revenue streams where conflicts arise. Using Council data, if 10% of tenants do not pay rent the loss of rent income per year will amount to £2.6 million a year and this loss rises to £5.2 million if non payment rises to 20%. 9.3 Projected losses in rental income of this order will cause significant challenges in relation to the funding of maintenance programmes and long term investment in housing provision. The Council and social landlords in general will be required to review the affordability of existing funding streams and consider the impact on rent levels for all tenants as a consequence of the significant financial pressures that are anticipated.
10. Renfrewshire Council Response to the Introduction of the Welfare Reforms 10.1 Renfrewshire Council has developed and implemented a wide ranging corporate wide programme of work to ensure the Council is effectively mobilised and plans to manage as far as possible the impact of the welfare reform changes. 10.2 Programme activities through 2012–13 have focused on raising awareness of the changes and engaging directly with those affected, in particular with tenants. A corporate training programme has been developed and delivered to staff and communications tools such as video and a range of print materials have been developed and shared with partner organisations across Renfrewshire. The Council and partner RSLs have engaged directly with tenants with 85% (1662) of council tenants receiving direct contact prior to 1 April 2013. 10.3 To further recognise the needs of tenants, Renfrewshire Council is actively considering a range of options including; reclassification of a property where it can be evidenced that a bedroom is stated as being required to meet disability or medical needs, and no other suitable alternative is available; re-designation of any room found to be less than 50 square feet as a “box room” and not a bedroom; examining options around restrictions in Right to Buy for properties in short supply and amendments to the allocations policy to enhance exchange options. 10.4 In addition to supplementing the DHP funding outlined at paragraph 9.4 the Council has approved £1.3 million in additional resources for 2013–14 to support tenants and citizens affected by the welfare changes, including the Housing Benefit changes. This has resulted in the deployment of a 45 strong team across a range of services, including Housing Services, Advice Services and the Benefits Service to provide help and support. cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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10.5 Welfare reform represents a major financial risk to the Council Housing Revenue account (HRA) over the medium term as a range of welfare changes take effect over this period. The Council has planned for and responded to predicted increases in customer demands, needs and also to pro-actively protect the financial position of the HRA. Resources involved in rent collection have increased as part of proactive measures outlined earlier. Twelve temporary posts were funded by the Housing Revenue Account at a cost of £0.080 million in 2012–13 with a full year recurring cost of £0.331 million moving into 2013–14 to supplement existing resources in Housing Services. The underlying objective of this investment is to both, support the tenants and their families manage the change but also to seek to pro-actively protect the HRA rental stream during this transition. 10.6 The Council’s Benefit Service is proactively managing requests for review and disputes in relation to application of the under occupancy reduction in accordance with the Housing Benefit legislation and guidance. When additional information is provided by the customer that supports removal of the reduction, the housing benefit decision is revised. Where the decision upheld, a submission is prepared and submitted to HM Courts and Tribunal Service for consideration. 10.7 A welfare reform summit was held in Renfrewshire in December targeting support and awareness at Third sector organisations operating in Renfrewshire and the Council has recently supported a Third sector Welfare Reform event led by the Third sector interface organisation in Renfrewshire. 10.8 An Employability Conference is also planned for June 2013 targeting employability and business development practitioners from across Renfrewshire. Information on Welfare Reform will be shared and discussions will focus on planning and partnership working.
11. Oral Submission 11.1 Renfrewshire Council is willing to present oral evidence to the Scottish Affairs Committee in relation to this inquiry into the impact of the under occupancy reduction and other changes to Housing Benefit in Scotland.
APPENDIX 1 A. Renfrewshire—Context The Scottish Index of Multiple Deprivation (SIMD), the Scottish Government’s official tool for identifying those places in Scotland suffering from deprivation, published in 2012 notes that Renfrewshire’s overall share of the number of datazones showing the worst deprivation in Scotland has increased and the single overall most deprived datazone in Scotland is located in Ferguslie, Paisley. In SIMD 2012, 14.7% of Renfrewshire’s population (25,030 people) is income deprived, compared to a Scotland average of 13.4%. In terms of employment deprivation, 15% of working age Renfrewshire residents (16,070) are employment deprived, compared to 12.8% in Scotland as a whole. Between SIMD 2009 and SIMD 2012, Renfrewshire had the largest increase in the percentage of working age people who are employment deprived (2.4%). Renfrewshire has the 7th largest share in terms of the 15% most deprived areas in Scotland. There are approximately 75,000 households in Renfrewshire. 34% of Renfrewshire households rent their home in the social rented sector. Renfrewshire Council is a social landlord and retains 12,540 council houses with 68% of the households receiving Housing Benefit to assist them with meeting their housing costs. There are also approximately 7200 social rented properties managed by Registered Social landlords in the Renfrewshire area, with 69% receiving Housing Benefit. The number of households renting in the private rented sector in Renfrewshire is estimated at 8,200. Of these around 3,400 receive Housing Benefit (LHA). 17,311 households in Renfrewshire were in receipt of Housing Benefit, totalling £63.8 million as at 31 March 2013. Of this, £28.5 million was paid to Council tenants and £35.3 million was paid to tenants of Registered Social Landlords and private landlords. 1,960 council tenants are affected by the under occupancy reduction. A total of 1,657 tenants under occupy by one bedroom, while 284 under occupy by two bedrooms and 19 under occupy by three bedrooms. The total income at risk of non payment at this time is £23,500 per week, or £1,218,000 per annum.
RENFREWSHIRE—DATA B. Renfrewshire Council Property Breakdown — 12,540 properties (excluding void properties). — 68% of tenants receive Housing Benefit. — 33% of the stock, 4,111, are one bed room properties. — 49% of the stock, 6,098, are two bedroom properties. — 17% of the stock, 2,110, are three bed room properties. cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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— 2% of the stock, 220, are four or more bed room properties. — 1,286 properties became void during 2012–13.
Table 1 RENFREWSHIRE COUNCIL RENT LEVELS 2012–13 Size/property House Own Door Flat Maisonnette Flat Multi storey 0 bed £ 61.54 £ 60.11 £ 58.68 £ 56.53 £ 55.82 1 bed £ 68.70 £ 67.27 £ 65.84 £ 63.69 £ 62.97 2 bed £ 76.57 £ 75.14 £ 73.71 £ 71.56 £ 70.85 3 bed £ 83.73 £ 82.20 £ 80.86 £ 78.72 £ 78.00 4+ bed £ 89.45 £ 88.02 £ 86.59 £ 84.44 £ 83.73
Table 2 LOCAL HOUSING ALLOWANCE RATES MARCH 2013 category Mar-13 A 1 shared room £ 65.00 B 1 bed room £ 80.77 C 2 bed rooms £ 102.69 D 3 bed rooms £ 123.46 E 4 bed rooms £ 184.38
Table 3 IMPACT ON COUNCIL TENANTS AT DIFFERING LEVELS OF UNDER OCCUPANCY Level of Under No. of affected Loss of Housing Loss of Housing Occupancy tenants Benefit (weekly) Benefit (annual) 1 bed 1,657 £17,400 £903,000 2 bed 284 £5,700 £294,000 3 bed 19 £400 £21,000 Total 1,960 £23,500 £1,218,000
June 2013
Written evidence submitted by the Western Isles Forum of Tenants and Residents’ Associations (WIFTRA) The Punitive effect of the Bedroom Tax The savings to Housing Benefit from the spare room supplement being abolished in the Western Isles are far less than the cost to tenants. If this was just an abolition of the supplement then surely the bedroom tax should be equal to the difference in rent between a one bedroomed and a two bedroomed etc. Same area Weekly Current Current No Weekly Rent Address Bedrooms rent % BT Ded deduction Bedrooms Rent difference Nicolson Road, Stornoway, 3 69.90 25 17.48 2 63.24 6.66 Isle of Lewis Springfield Road, 3 69.90 14 9.79 2 67.03 2.87 Stornoway, Isle of Lewis Vatisker Park, Back, Isle of 2 67.03 14 9.38 1 60.11 6.92 Lewis Cearn Bhoraraidh, 2 67.03 14 9.38 1 60.11 6.92 Stornoway, Isle of Lewis Geilear, Upper Bayble, Isle 3 72.99 14 10.22 2 67.03 5.96 of Lewis Buaile Dubh, Eochar, Isle 2 62.28 14 8.72 1 57.99 4.29 of South Uist
The above table shows the differential in rental income between the highest and lowest rents of properties belonging to Hebridean Housing Partnership. As you can see from the table even at the maximum differential cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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the savings in housing benefit are nowhere near the bedroom tax amounts. This means that there is a punitive element to the bedroom tax in the Western Isles.39
Its Effect on the Homeless Even amongst the most vulnerable of HHP’s tenants the bedroom tax is causing massive problems. Homeless people who are desperate for housing have been forced to consider refusing housing as they will be deemed to be under-occupying. Whilst talking to the project workers at the Lewis street hostel it became apparent that many of the homeless people who are in temporary accommodation there, are having to stay there because of the shortage of one bedroom accommodation.
Case Studies Homeless one Mr Mrs K applied for housing in February 2012. They were assessed as homeless and offered temporary accommodation, this accommodation was two bedroomed social rented from the council’s homeless service. In April 2013 they became liable for the bedroom tax, Mr K has severe asthma and sleep apnoea Mrs Kay has been sleeping in a separate room. They applied for DHP in April 2013 and were at first refused with the help of the HHP they successfully appealed and were granted DHP for 26 weeks. In June 2013 Mr and Mrs K were offered permanent accommodation with HHP. This accommodation however was two bedroomed and they would have lost their DHP if they accepted it and would have to reapply and to be eligible they would have to on the transfer list for a one bedroom property.40
Homeless two Mr S was assessed as homeless in December 2012 he was given temporary accommodation in the Lewis street hostel. He was seeking accommodation in the south lochs area due to family and friends being able support him. The only accommodation became available was a two bedroom property Mr S was desperate to be rehoused but could not accept the property as he would be liable for the bedroom tax. He could not afford to pay the bedroom tax and did not want to go into arrears immediately.41
Homeless three Miss T presented as homeless in October 2012 after having been evicted from privately rented property. She was offered a place in the Lewis street hostel, this proved to be very difficult for her as she was a vulnerable adult. She was originally from the Isle of Harris and was seeking a property there, she was offered a two bedroom property as there were no one bedroom properties available. This property was part of the council’s homeless project when she moved into it, it was perfect when suddenly in April 2013 she became liable for the bedroom tax at 14%. She has been unable to transfer as there are no one bedroom properties in the area she also cannot take up a permanent let on the property as she is deemed to be under-occupying.42
Its Effect on the Disabled Mr B A single man with cerebral palsy in a motorised wheelchair—moved back to his home island after being in a mainland placement for years in Inverness. The only property that was suitable was a three bedroomed adapted house. Mr B is expected to pay £18.78 per week as he has two rooms under occupied and carers come into his home. He cannot move as there are no smaller houses adapted. He is currently in receipt of DHP.43
The Effects of Local Allocations Policy HHP have always had a generous allocations policy. This is mostly due to lack of demand for larger properties. The bedroom tax as effectively made a mismatch between the allocations policy and the housing benefit policy. Many families have found themselves overcrowded with regards to the allocations policy but under-occupying for the bedroom tax.
Case Studies Mr & Mrs A Mr and Mrs A have two children living in a 3 bedroomed house. The children are expected to share due to ages. They have to pay £9.38 per week. Mrs A had been working until she went on maternity leave. Mr A was working as a Chef over the summer season in a local hotel but due to health difficulties in the last two years (eyesight problems) he is unable to secure employment and cannot drive either. The family are on a very 39 Figures from Hebridean Housing Partnership collected and collated by the Western Isles Forum. 40 Case study from local authority homeless manager. 41 Case study from crossroads key worker at the Lewis street hostel. 42 Case study from crossroads key worker. 43 Case study from Hebridean housing partnership. cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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limited budget and are struggling to pay bedroom tax and the small arrears accrued prior to 1 April 2013. They have applied for DHP but the claim has not been decided upon yet. The family are very worried about how they can “afford to eat” heat the house and clothe the children and currently do not know how they could afford to move, re-carpet and redecorate a smaller property although they are on the transfer list. The family need a car as public transport is too infrequent or difficult to use with two small children.44
Donna M I was given a three bedroomed house by HHP because I was overcrowded in my two bedroomed house according to them. I then find just over a year later I am forced to either pay extra for the extra bedroom or move again to a smaller house until my eldest is 10 (two years) then move again to a larger house incurring moving expenses again. I feel that I am being punished for my landlord’s allocations policy which is at odds with the new housing benefit rules.45 Even people with shared care responsibility for the children are finding themselves punished by the bedroom tax.
Mr E He lives in a two bedroom bungalow. He worked until recently at a local garage but he has been diagnosed with multiple sclerosis and is now unable to work for extended periods, although he does four hours a week to maintain contact with friends and colleagues. He shares custody of his four children with his ex-wife, they have the children on alternate weeks. Before 1 April 2013 he had applied for a three bedroom house so that his children were not overcrowded when they stayed with him. Now because ex-wife is the parent to receive child benefit he is classed as over occupying his property and subjected to a 14% reduction in housing benefit. He has been successful in claiming DHP, and because he is apparent with access to children he has been granted DHP for 52 weeks. But at the end of this time, his DHP will end and he’ll be faced with a 14% reduction in housing benefit. He has asked his ex-wife to allow him to be the recipient of child benefit to avoid the bedroom tax, but she will not agree. In the meantime, HHP is facing a dilemma in regards to his housing needs. If they leave him in his current property with his children he will be severely overcrowded. If he transfers into a three bedroom property he will be faced with a 25% reduction in housing benefit from April 2014 onwards. He cannot afford this.46
How it Affects the Unwell Many of many of Hebridean housing partnership tenants are not permanently disabled but are affected by ill health, the bedroom tax has an adverse effect on many ill people. HHP whilst sympathetic have to abide by the rules of the bedroom tax.
Case Studies Mr and Mrs C Expected to pay £16.76 a week as they live in a three bedroomed house. Both have health issues and fit enough or financially well enough to afford to move. HHP are currently installing a shower and adapting property due to Mrs C.s health conditions. The couple are on employment and support allowance with a disability premium for Mrs C. They are currently in receipt of DHP. They are worried that they can afford to heat the house to a comfortable heat over the winter months. Mr C is severely diabetic and has to maintain a healthy diet which he struggles to afford to do. The couple have a car to attend doctors’ appointments as public transport is again poor. They also have to have access to the hospital and a Diabetic nursing services.47
Mr D Lives a three bedroom house alone since his wife and son left him. Mr D receives £71.00 per week and is expected to pay £17.47 per week bedroom tax. He can’t afford to put the heating on and eats meals with his parents to cut down on costs. He has applied for DHP but was turned down, he has reapplied and got on the transfer list. He has health difficulties and maintaining a healthy diet is vital to him. He works fora short time and has arrears which is struggling to pay back along with the bedroom tax. He has been getting advice but has already breached the agreement he made in June 2013.48 44 Case study from Hebridean housing partnership. 45 Case study collected by the western isles forum. 46 Case study from Hebridean housing partnership and the western isles forum. 47 Case study from Hebridean housing partnership and the western isles forum. 48 Case study from Hebridean housing partnership. cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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Mr F
He is a 58 year old single man and has been in his home for more than 50 years. It is a three bedroom property, whose bedroom tax is 25% reduction. He is finding it impossible to pay this rent he applied for DHP. In order to make himself eligible for DHP, Mr F also applied for transfer to a one bedroom property.
The following day, he telephoned the office in tears. He is in very poor health and a severe back and leg injuries following a motorcycle accident in which he also suffered brain damage. He felt that if you moved house he would lose a support network provided by neighbours and friends.
He was advised to remain on the transfer list, and that he could not be forcibly moved against his will, and should not worry until he was offered a transfer. DHP has been awarded for 26 weeks but after this he will have to pay £18.25 towards his rent.49
Its Effect on the Housing List
Even those not directly affected by the bedroom tax are finding themselves punished by being pushed back down the housing list. For example someone who is overcrowded and needs to move from a one bedroomed house to a two bedroomed house suddenly found themselves pushed back down the list by those needing to downsize.
Case Study
Mrs W
Myself, my husband and our son who turned one on 26th July, are still stuck in a one bedroomed house despite being on the transfer list for a two bedroomed house for about 18 months.
I normally phone once a week to find out our placing on the transfer list. At the start of April we were 18th. The following week we were 21st. When I questioned how we could have gone down as I think we should be quite high on priority lists, I was told that because people have been affected by the bedroom tax, they were more of a priority than us, because they might face financial hardship meaning they couldn’t pay their rent and arrears would start to build.
My husband and I work very hard and juggle our lives to make sure we can give our son everything he needs. He needs a bedroom, and we can’t give that to him without renting privately and putting ourselves into financial difficulty. I feel for people affected by the bedroom tax, but I don’t understand why people affected have been put in front of us and many others. As of today we are 17th on the list, so we might have a house by the time our son goes to school.50 August 2013
Written evidence submitted by Craig Stirrat Housing Services Director on behalf of Fife Housing Association (FHA)
Executive Summary
The Tenants of Fife Housing Association are experiencing a disproportionate impact of the bedroom tax due to the number of tenants (particularly single people and couples with no dependents) reliant on housing benefit and the higher numbers of under-occupied family houses.
Fife Housing Association has seen both rent arrears and void rent loss increase since 1 April 2013. Where under-occupied properties have been vacated, demand has virtually dried up for these large (mainly flatted) homes.
Currently 18% of FHA tenants are affected by the bedroom tax—prospects for an early move to a smaller house are affected by a number of factors—but the main one is the low availability and low turnover of one and two bedroom houses. For many tenants living in rural communities the alternative options to move, for instance, to the Private Rented sector are limited eg North east Fife area (St Andrews).
This low turnover has resulted in only a 2% reduction in number affected (as at 1 April 493 were affected) over the past six months. More time is needed to clear the “log-jam”. 49 Case study from Hebridean housing partnership and the western isles forum. 50 Case study from the western isles forum. cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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Due to the insufficient options available to many households to downsize—FHA are calling on the UK Government to: 1. further investigate alternatives to encourage people to downsize, but which would not penalise them when they cannot; 2. to make further concessions on exemptions to be granted for those tenants who have applied to downsize to a smaller home but have to wait until a suitable home becomes available; and 3. ideally provide additional budget to the Scottish Government for the funding of smaller homes and homes designed for life (homes that can be adapted to take account of growing and shrinking household needs).
Whoweare — 1997—established as a General Needs housing provider. — Own—2,400 homes + provide Factoring Services for 89 homes. — £9.7 million—annual turnover. — 66 staff, who also service our subsidiary—PACT.
Who are our Tenants? — 30% of all FHA tenants are working (either FT or PT); — 30% of all tenants on a weekly income of up to £170pw (net); — 32% of all tenants are over 60 yrs. old; — 37% of all households are single households; — and 52% of tenants have been tenants for 10 years or more; — As at 1 April 2013—57% FHA tenants on HB ( 39% full, 18% part).
Who We House — Fife Housing Association are partners in Fife Council’s (Combined ) Fife Housing Register (FHR)— we allocate our vacant homes from this register of housing applicants and tenants seeking a transfer— 11,558 applicants (as at 31/08/13 ) seeking another home — 52% of applicants on the FHR would only qualify for a 1 bedroom property under the DWP rules of entitlement (see table 5)—the rest would qualify for two and above bedrooms. — Only 31% of applicants/transferring tenants stated they were currently working full time or part-time (when part-time numbers are removed—because they are likely to be entitled to part HB this drops to 20%).
Table 1 FHA STOCK & ANNUAL TURNOVER 2012–13 FHA Stock FHA Stock— type as % of FHA Turnover— Turnover As % Size—No Beds Number total stock Number of stock size bedsits 12 0.5% 0 0 1 bed 82 3.4% 15 18% 2 bed 1,125 45.8% 137 12% 3 bed 1,145 46.5% 52 4.5% 4 bed + 94 3.8% 3 3% Total 2,458 100% 207 8.5%
Fife Council 30,100 2,500 8.3%
Table 2 WEEKLY FIFE RENTAL COMPARISONS Fife HA £ Weekly Rent Fife Local Weekly reductions Private £ Weekly Housing Size of Property (average = £70) 14% 25% (Kdy) Allowance £ 1 Bed 51.00 (flat) 98.00 (flat) 80.77 2 Bed 63.00 (flat) £9.00 115.00 (flat)* 103.85 3 Bed 73.00 (cott) £10.00 £18.00 130.00 (cott) 117.92
*A 2 bed flat in St Andrews is higher at between £210 to £255 per week cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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Table3 PRIVATE RENTED SECTOR AVAILABILITY—FIFE51 Property Size/type No. Available Property Size/type No. Available 1 Bedroomed cottage 5 2 Bedroomed cottage 57 1 Bedroomed flat 51 2 Bedroomed cottage 166 Total 56 223
Table 4 FIFE STOCK BY TENURE Tenure Number % of total Owner Occupied 119,189 70% Council 30,100 18% Registered Social Landlords(RSL) 9,292 5% Private Rented Sector (PRS) 12,000 7% Total 170,881 100%
Table 5 BEDROOM ENTITLEMENT COMPARISON Household Size Bedroom Entitlement FHR DWP Single Person Bedsit or 1 Bedsit or 1 Single pregnant woman 2 1 Couple 1or2 1 Family with one child 2 2 Family, two children of same sex under 13 years 2 2 old Family, two children of same sex one or more aged 3 2 over 13 years Family, two children not of same sex (irrespective 3 2 of children’s age) Family, three or more children 3 or 4 2 or 3
51 Source Zoopla as at 12 October 2013 cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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Table 6
SUMMARY WELFARE REFORM IMPACT ON FHA TENANTS Reform Impact on Tenants Impact on Association Mitigation by FHA Benefit Cap 5 FHA tenants originally 2 no longer affected by 2 Discretionary Housing affected— cap Payment applications loss in Housing Benefit of 3 currently now in high submitted—both £673.83 per month. arrears unsuccessful Reduction in tenants income Under Occupancy 435 FHA tenants affected 18% of all FHA tenants Collaboration with Fife (as at 1 April 57% of affected Council & RSLs to help tenants stated they did not Potential monthly rent loss tenants via Fife Reform wish to move) for period 1.4.13 to Group Downsize Requirements: 30.9.13—£121095.30 Encourage Mutual exchanges 321 (74%) have 1 extra 119 (27%) of affected Promote Priority transfers bedroom tenants fell into arrears Assisting tenants with DHP 114 (26%) have 2+ extra from 1.4.13 to 30.9.13 claims bedrooms totaling—£18,255.42 Help h/holds with income Of the 435 tenants affected 105 (24%) of affected management—“Canny by bedroom tax: tenants fell further into Budgeting” 72%—are single people, arrears by an additional— FACT course for applicants 15% are couples with no £9691.26 on housing list and new dependants, Total additional arrears— tenants 5% are families with £27946.68 (23%) of Money advice surgeries dependants, potential monthly rent loss. 8% are single people with Additional recovery costs overnight access to Additional transaction dependants costs Rise in Voids— 100 voids for period 1.4.13–30.9.13. Inability to allocate 4 apt flatted accommodation Higher administration costs for voids Void rent loss increased from 0.7% to 1.26%
Universal Credit 1,320 tenants will no UC: the £4.3m HB Collaboration with Fife longer have their HB paid currently paid to FHA per Council & RSLs to help direct to their rent account annum—will be paid tenants via Fife Reform Tenants will be fully directly to working age Group responsible for paying tenants’ Working with Fife Council their rent to FHA Increased collection to promote Fife Credit More responsibility on costs—additional £17k Union—establish Jam-Jar tenant to notify DWP of accounts change in circumstances Working with Alliance Online applications members to take forward digital inclusion project and seek funding Pre tenancy course for applicants on housing list and new tenants On panel of Customer Representative Group with DWP in Fife
FHA Position Statement
The Board of Management and Senior Staff of Fife Housing Association (FHA) understands that the UK Government has to tackle the growing Welfare state budget and get people back to work.
However, as a responsible registered social landlord we have to remain opposed to the way in which the welfare reform policies—namely the under-occupation deductions from Housing Benefit payments—have been implemented. cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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We believe there has been insufficient consideration of the real impact on individuals and communities and (other than the additional allocation of Discretionary Housing Payments) any substantive planning and resource put in place to ease the transition (ie additional funding to build smaller homes or to reconfigure homes).
We would therefore call on the UK Government to: 1. further investigation into alternatives to encourage people to downsize, but which would not penalise them when they cannot; 2. to make further concessions on exemptions to be granted for those tenants who have applied to downsize to a smaller home but have to wait until a suitable home becomes available; and 3. ideally provide additional budget to the Scottish Government for the funding of smaller homes and homes designed for life (homes that can be adapted to take account of growing and shrinking household needs).
Evidence of Impact — Fife has one of the largest problems of shortage of smaller properties available in the social rented sector—particularly in our more rural communities.
Table 7
SIZE OF DWELLING (NUMBER OF ROOMS)—SOURCE: SCOTTISH HOUSE CONDITION SURVEY 2009–11 Number of rooms 1–3 4–5 6+ Dwellings 000s Row % 000s Row % 000s Row % Aberdeen City 19 19 64 62 20 20 Aberdeenshire 13 12 52 50 39 38 Angus 7 14 26 51 18 35 Argyll and Bute 6 15 22 53 13 32 Clackmannanshire 3 15 13 56 7 29 Dumfries and Galloway 5 7 40 58 24 34 Dundee City 13 19 43 62 14 20 East Ayrshire 4 8 36 66 14 26 East Dunbartonshire 5 11 22 51 16 38 East Lothian 5 12 26 62 11 26 East Renfrewshire 4 10 16 44 16 46 City of Edinburgh 44 20 125 57 52 23 Eilean Siar 1 6 6 48 5 45 Falkirk 9 13 44 64 15 22 Fife 17 11 98 61 46 28 Glasgow City 45 16 197 70 40 14 Highland 13 13 59 58 30 30 Inverclyde 6 17 24 65 7 18 Midlothian 3 7 24 67 9 26 Moray 4 10 23 59 12 31 North Ayrshire 9 14 36 57 17 28 North Lanarkshire 16 11 96 66 34 23 Orkney Islands 2 16 5 50 3 34 Perth and Kinross 7 11 38 59 19 30 Renfrewshire 15 20 42 53 22 28 Scottish Borders 7 14 26 50 19 36 Shetland Islands 1 9 6 57 3 33 South Ayrshire 8 15 29 55 15 30 South Lanarkshire 14 10 89 65 34 25 Stirling 4 12 21 56 12 32 West Dunbartonshire 8 19 28 67 6 15 West Lothian 8 11 46 63 19 26 Scotland 325 14 1,418 60 614 26
— Currently there is a structural mismatch of supply to demand (particularly in the former Fife Mining villages, where FHA has many properties) which the bedroom tax has exacerbated. Many large family flats which have been let to smaller households on benefits in the past are becoming virtually un-lettable because these households cannot afford the 14 or 25% charge. cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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— Since 1 April 2013 FHA void rent loss has increased from 0.7% to 1.26% because properties are now harder to let. (ironically if a single person household moves from a two bed FHA flat and moves into a one bed flat in the PRS—it adds an additional £140 per month to the Housing benefit costs for that individual—whilst FHA loses rental income caused by an un-necessary property vacation). — Since 1 April 2013 FHA net rent arrears have increased from 3.0% to 3.7% — The Fife Housing Partnership’s Housing Need and Demand Assessment (2011) indicate that 68% of the 561 new affordable housing requirements (per annum over 10 yrs) are for one and two bedroom homes and 32% for three bedrooms and above. A total of 5,610 homes has been estimated to be required by 2021. — Fife Council has set a 5 yr. target of 2,700 new affordable homes (an average of 540 per yr. against a 10 yr. target). Fife Council have set a target to achieve 22% specific needs housing on new developments (provided through amenity & wheelchair units). — In May 2013 the Scottish Government announced that it is on target to complete the 6,000 affordable homes needed every year across Scotland to deliver the overall aim of 30,000 over the life of the Scottish Parliament (by 2016), at least 20,000 of which should be for social rent. — Delivery of these homes, of these sizes, will be most effective in meeting affordable housing needs and help tackle the bedroom tax issues. Fife Council and Housing Associations however need time to achieve this goal. It is anticipated that one consequence is that more low income households will be forced into higher cost private rented accommodation. — In line with national trends (as revealed in the recent Scottish Federation of Housing Associations (June 2012) survey), many of the FHA households affected by the bedroom tax require a one bedroom property in order to avoid a reduction in housing benefit. — Yet little more than 7% (15—see table 1) of all available FHA lets in a year are one bedroom homes. Turnover of Housing Association homes of any size is relatively low with less than one in ten properties becoming available to let each year. — For most affected tenants they have no alternative but to wait until a smaller house is offered to them. In the meantime they are incurring additional cost of up to £72 per month through no fault of their own. — There are many households in social rented housing (including tenants of Fife Housing Association) in Fife willing to downsize from two or three bedroom properties but there is a definite lack of one and two bedroom properties available. — Since 2002, there has been a 6% reduction in the number of social rented homes in Fife. The reducing size of the social housing sector has meant a corresponding reduction in the amount of housing that becomes available each year through turnover. — It could be argued that the Private Rented Sector (PRS) in Fife is one solution to the under-occupation and bedroom tax issues, as this sector has grown by 3% over the last 10 years—a higher growth rate than other housing tenures in Fife. — But one has to question the value for money implications of encouraging social tenants dependent on housing benefit moving into the PRS when rents are on average almost 25% higher than in the voluntary social rented sector. Ironically, these higher rents may also act as a deterrent to those householders who are actively seeking full time employment. — According to recent Fife Council research,52 by and large, tenants find it relatively easy to find accommodation in the PRS, although there are variations between areas. While 65% of all tenants said they had found it easy or relatively easy to find a let, this fell to 50% in the St Andrews area. Affordability was the main problem experienced by those that had struggled to find accommodation. — This example clearly demonstrates that in particular areas of Fife—in this instance the North East of Fife—the one size fits all policy of applying bedroom tax is not appropriate. — With its relatively self-contained market and high proportion of households living in the PRS, the St Andrews market is markedly different to other areas of Fife. Rents are high, as are the number of Houses in Multiple Occupation; the market is dominated by and designed to cater for students— making it very difficult for social rented tenants to access in order to downsize. — According to the research, “The level and type of intervention required to ‘tempt’ a significant number of landlords out of the student market would be considerable and potentially highly distorting to the market.” — The significance of this level of impact on Fife Housing Association tenants is highlighted by the research undertaken by the Scottish Federation of Housing Associations53 which reveal that on average, 9% of Scottish Housing Association tenants were under-occupying their properties. 52 The Contribution of the Private Rented Sector within Fife’s Housing System Report by Craigforth: March 2010 53 SFHA “Bedroom Tax Early Impacts”—June 2013 cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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— With welfare budget and public sector cuts all coming at once, the staff at Fife Housing Association are already seeing people cutting back on the essentials of food and heating but there is only so much they can do. — The result for a significant number of social rent tenants will be misery—cold rooms, longer queues at food banks (see attached statistics from the Dunfermline Food Bank), broken families, and missed rent payments and yet more people facing homelessness—devastating for those directly affected, but bad for the resilience of the Social Rented Sector.
DHP — Fife Council has received 2922 applications for DHP since 1st April 2013. 2,252 of these applications have been successful. — The amount spent totals £787.,400.80 from the initial pot of £1,045.000 which had been topped up by Fife Council from the original award of £435,000 from DWP. It is anticipated that all of the fund will be used. — There has been 195 applications made by tenants of Fife Housing Association with help from their housing officer of which 80 have been successful which gives additional assistance of £3852.50 per month to our tenants. — Housing Officers continue to help tenants complete applications on a daily basis. — DHP applications were initially awarded for a six month period with all applications needing to be reassessed from 26 September 2013, however the Local Authority Executive Committee gave consent for all existing awards to be automatically extended to the end of the financial year. This is for cases where no change in income has taken place since the last award was assessed. — Where an award for DHP is successful Fife Council will continue to fund 75% of the difference for underoccupancy cases. — The Scottish Government has just committed £20 million of new funding to assist councils top up their “Discretionary Housing Payment” budgets to offset some of the worst effects of the Housing Benefit sanctions.
APPENDIX 1 SUPPLEMENTARY INFORMATION The Bedroom Tax & Homelessness Issues in Fife — In Fife there were 39, 359 social rented sector homes in 2011–12 of which there are only one in five which have one bedroom. — Right to Buy resulted in the loss of 6,883 affordable homes between 2001–02 and 2011–12. — In the last year 416 social sector properties have been lost through sale or demolition. — There were 534 households living in temporary accommodation in September 2012, including 330 children. — There were 2,713 households assessed as homeless in 2011–12—70% of which required a one Bedroomed house but most had to be offered a larger home than the DWP social housing size criteria dictates. University and social landlord collaborative research has found the Department of Work and Pensions may have significantly over-estimated the savings from the bedroom tax. The University of York worked with Riverside, Wigan and Leigh Housing, Affinity Sutton and Gentoo to apply figures based on the experience of the housing associations tenants to a model used by the DWP to estimate the savings reported to parliament in impact assessments in 2011 and 2012. DWP estimated that the introduction of bedroom tax would reduce the housing benefit bill by £930 million over the next two years, with further tests showing annual savings within a range of £10 million either side of its main estimate. However, the new research suggests that using the DWP’s own model, the actual savings may be little more than 60% of the projected figure. Data based on the first five months of the four landlords implementing the tax, suggests that the DWP has under-estimated the proportion of tenants under-occupying by one bedroom who will downsize, and of those, the proportion who will be displaced into the private rented sector. Written by Professor Rebecca Tunstall, director of the centre for housing policy at the University of York, the report shows major weaknesses in the DWP’s model, which only takes into consideration the impact of a limited number of possible options for those moving and does not consider the full impact of long chains of moves which could be triggered. October 2013 cobber Pack: U PL: CWE1 [O] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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Written evidence submitted by Convention of Scottish Local Authorities (COSLA) WHAT IS HAPPENING WITH DISCRETIONARY HOUSING PAYMENTS? Background Discretionary Housing Payments (DHPs) can be used by local authorities to provide financial assistance to claimants in receipt of Housing Benefit when the local authority considers that help with housing costs is required. Until the recent welfare reforms, the UK Government’s total allocation for DHPs was c £20 million per year with Scotland receiving a proportionate allocation. Additional monies were announced by the UK Government to assist with the implementation of housing benefit reforms such as the Under Occupancy changes (Bedroom Tax or Spare Room Subsidy), Benefit Cap and changes to local housing allowance. Scotland’s 32 local authorities received c£10 million allocation for 2013–14 from DWP for DHPs in April 2013. This included both the original base allocation plus the additional allocation in recognition of support needed for the housing benefit changes. Under regulations, councils have the ability to top up this DHP funding, from their own resources by a further 150%. At the end of May, COSLA’s survey revealed that 14 of the 30 councils who responded had either done so or made provision to do so if required. DWP then announced, on 30 July, further funding, particularly for very rural authorities. Scottish local authorities with low population density received around £3.5 million of a £5 million allocation across Great Britain. As a consequence, revised DWP DHP allocations in Scotland reached almost £13.5 million, not including a further £20 million funding open to bidding across GB. The bidding fund does not count as DHP allocation for calculating maximum top up. Scottish Government then made available £20 million in September to assist local authorities to deal with the consequences of the bedroom tax—which councils can use to maximise top up. Therefore the maximum funding currently available to councils in Scotland totals c£33 million. Successful bids to DWP might increase this by around £2 million. An important point to note in relation to current patterns of expenditure and awards is that many local authorities will have adopted policies and practices and profiled expenditure on the basis of the funding available for DHPs at the beginning of the financial year. With the marked change to available funding, many are now re profiling expenditure and revisiting policy and practice. COSLA recently sought further information from councils to increase our understanding of what is currently happening in relation to DHP spend across councils. Feedback was received from 26 councils (81%) and these findings are based on that response.
Current Position From feedback from 26 councils, our understanding of the position at the end of September is as follows: — 88% (23) have committed 30% or more of their DWP DHP allocation. — 69% (18) have committed 40% or more of their DWP DHP allocation. — 58% (15) have committed 50% or more of their DWP DHP allocation. — 46% (12) have committed 60% or more of their DWP DHP allocation. — 19% (5) have committed 90% or more of their DWP DHP allocation. — 15% (4) have committed over 100% of their DWP DHP allocation. — The three councils who have committed below 30% of their DWP allocation are all rural who have now received significant DWP additional funding. — These 26 councils had received 42,247 applications in total at 30 September and made 27,828 awards (66%). — At 30 September £7,431,641 has been spent or committed by these 26 councils on DHPs.
Conclusions It is important to remember that only limited conclusions can be drawn from this information. Funding available for DHPs has been increased incrementally and it is too early, in particular, for the £20 million made available by Scottish Government to have significantly fed through in this analysis. Feedback from councils suggests that many are adapting policy and practice in the light of a quite different picture of available funding. A number advise that they are now revisiting earlier applications. In addition, while there has been a high number of applicants overall, some councils have identified that significant numbers of those with an under occupation penalty (and now showing rent arrears) have not as yet made applications for a discretionary housing payment and these councils are now adopting a much more pro- active targeted approach eg Highland Council, Renfrewshire Council. It is therefore expected that the levels of expenditure on DHPs across Scottish councils are likely to change markedly over the coming months. cobber Pack: U PL: CWE1 [E] Processed: [10-12-2013 14:07] Job: 035419 Unit: PG09
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Under Occupancy and Rent Arrears
The picture is complex and changing. Key points are: — Arrears are up. At the end of May, all but one council with housing stock reported in COSLA’s survey an increase in arrears due to the bedroom tax. 75% reported that non-payment of rent due to the bedroom tax was directly responsible for the increase in their rent arrears. — Of that rent due to be collected from tenants affected, 60% of councils then reported receiving 40% or less and 80% reported receiving 50% or less (based on responses from 20 of 26 councils). — The Scottish Housing Regulator (who gave evidence to the Scottish Affairs Select Committee) survey of the position at the end of June for all social landlords appears to show that arrears rises are not so dramatic, only reporting a change from 3.51% to 3.73% increase in gross arrears for all social landlords. However they also showed a sharper rise for councils—4.62% (30 June 2013) vs. 3.73% (30 June 2012). — Just below 1% gross rent arrears doesn’t sound too bad BUT if no council tenant hit by bedroom tax paid anything at all, this would only increase gross arrears by 2.5% to 3%. The SHR survey is still showing a 24% gross rise for councils.
To increase our understanding, COSLA checked the 30 September position with six councils—North Lanarkshire, North Ayrshire, Dundee, Highland, Edinburgh and Fife a good geographical and demographic mix. The selected councils have the following coverage: — They cover 43% of all working age local authority tenants on HB in Scotland. — They cover 48% of all local authority tenants affected by under occupation. — Two had rent arrears over 4% of their gross rent in 2011–12 and four had rent arrears under 4% of their gross rent in 2011–12. — Four are urban (prop. density over 200 per Sq. Km; Two are rural (Pop. under 200 per square Km). — Three had an HRA surplus of more than 10% of their gross rent in 2011–12 and three had surpluses of less than 3%.
The following information is based on returns from all of the six councils: — The six councils identified 20,021 tenants impacted by the bedroom tax — 37% (7,445) of these were in arrears on 31 March before bedroom tax came in. — On 30 September, 68% (13,712) were in arrears, a rise of 31%. — Arrears at 30 September 2013 were 29% (£5,122,366) higher than for the same period last Year. North North Highland Lanarkshire Ayrshire Fife Edinburgh Dundee TOTAL
At 30 September 2013 what £1,427,489 £2,534,000 £1,207,574 £5,668,750 £4,650,000 £2,085,051 £17,572,864 was your total gross rent arrears figure? What was the total gross rent £1,136,335 £1,532,000 £849,214 £4,764,542 £2,700,000 £1,468,407 £12,450,498 arrears figure for the same period last year ie at 30 September 2012? How many people in your 1,677 5,201 2,260 5,267 3,319 2,297 20,021 council area have had a HB reduction as a result of the under occupancy (bedroom tax) changes? Can you provide a figure for 623 2,333 779 1,882 969 859 7,445 the number of those with an under occupancy reduction who had rent arrears at 31 March 2013? Can you provide a figure for 949 3,449 1,294 3,642 2,523 1,855 13,712 the number of those with an under occupancy reduction who have rent arrears at 30 September 2013?
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Written evidence submitted by Glasgow City Council DETAILS FOR THE SCOTTISH AFFAIRS SELECT COMMITTEE AS REQUESTED ON 9/10/2013 Q513 The maximum levels of Housing Benefit payable for rent in the private sector are referred to as the Local Housing Allowance. The maximum is set at the 30th percentile of rents within Broad Rental Market Areas for houses of up to four bedrooms. The number of required bedrooms that a household requires is calculated in the same way that has now been introduced in social sector. The permitted levels in the private sector are greater than permitted in the social sector. A one bedroom property in the private sector would be allowed housing benefit of up to £91.15 per week which is greater than the average rents for up to four bedroom properties in both Glasgow Housing Association (table 2) and Maryhill Housing Association (table 3).
Table 1 LOCAL HOUSING ALLOWANCE 30TH PERCENTILE IN GREATER GLASGOW AREA APRIL 2013–14 No of Bedrooms 30th Percentile 1 bedroom in shared accommodation £65.00 1 bedroom £91.15 2 bedrooms £115.38 3 bedrooms £137.31 4 or more bedrooms £196.15
Table 2 GLASGOW HOUSING ASSOCIATION AVERAGE WEEKLY RENTS BY APARTMENT SIZE No of apartments Average Rent No of Units 1 apt (combined living room/bedroom) £52.17 2,790 2apt. (1 bedroom) £62.62 7,351 3apt. (2 bedroom) £68.08 20,555 4apt. (3 bedroom) £79.86 8,091 5apt. (4 bedroom) £87.68 1,281
Table 3 MARYHILL HOUSING ASSOCIATION AVERAGE WEEKLY RENTS BY APARTMENT SIZE No of apartments Average Rent No of Units 1 apt (combined living room/bedroom) £48.67 131 2apt. (1 bedroom) £61.39 931 3apt. (2 bedroom) £65.09 1370 4apt. (3 bedroom) £74.34 340 5apt. (4 bedroom) £90.52 33
Q584 Copy of Glasgow City Council Discretionary Housing Payments Policy (attached).54 November 2013
Printed in the United Kingdom by The Stationery Office Limited 12/2013 35419 19585
54 Not printed (available on request).