bedroomtax

[Mike Dailly is the Principal Solicitor of Glasgow’s Govan Law Centre and is a member of the Financial Services Authority’s Financial Services Consumer Panel. He writes in a personal capacity.]

One of the worst aspects of the 2012 Welfare Reform Act is the so called ‘bedroom tax’, although it might equally be called a ‘disability tax’ because two-thirds of the 95,000 households affected in Scotland contain someone with a disability.1

The rationale for housing benefit cuts for ‘under-occupied homes’ in the social rented sector is the UK Government’s desire to reduce the overall cost of housing benefit by £1bn over two years – so the bedroom tax is another tentacle of the austerity agenda. 2 A strategy that almost all respected political economists around the world will tell you is fundamentally flawed.3

If everyone does something at the same time, like implement cuts and reduce spending, the economy will go on a downwards spiral and UK debt will actually grow. This is what has happened in the UK. This is known as a ‘fallacy of composition’.4 The Chancellor has got it wrong, GDP has gone down, and our economic growth is flat lining.5

Besides the obvious human misery and indignity of forcing people out of their homes, there are other powerful reasons why implementing a bedroom tax is wrong and not in the public interest. Two immediate problems are created: first, you create a dynamic to force people to downsize. The DWP estimate that 660,000 people across the UK will be affected by these changes. The changes apply to claimants under the age of 61.6 Some 81% of those affected are ‘under occupying’ by just one bedroom.

This means most people affected will be liable to a 14% cut in their existing housing benefit from April 2013 – the equivalent of £624 per annum or £12 per week. The DWP already accept there will be many communities where there is insufficient smaller homes to downsize to.7 We all know there is a dearth of affordable housing across the UK, and the bedroom tax does nothing to help that. It will create nothing; it will cause misery, stress and serious worry for many tenants, and extra administrative costs and problems for social landlords.

Disabled people will of course be hardest hit, along with those on low pay or benefits. The exemption for tenants who need an overnight carer is of limited application. ITV News have given some common real life examples of where disabled tenants will be penalised by the bedroom tax.8 The example of a tenant who uses her second bedroom as sterile room to receive nutrition from a machine, made necessary after she had surgery for bowel cancer. Or a couple where the husband had a stroke and cannot share the same bedroom with his wife. Both of these tenants will lose over £48 per month from their housing benefit from April.

What will happen to all of those 95,000 households in Scotland who lose between £48 and £88 per month from their housing benefit? If we accept that there are not going to be enough smaller properties for tenants to downsize to – and the DWP accepts this – then this policy is going to lead to a serious increase in eviction and homelessness in Scotland.

The updated DWP Impact Assessment for the bedroom tax does not examine the consequential costs to the taxpayer for an increase in homelessness. From Govan Law Centre’s own research we know that the estimated economic cost of a typical homelessness case is £24,000 overall. It can be as high at £83,000 for the most complex case. The cost of each case to local authorities and housing providers is £15,0009 while the cost to a social landlord in evicting a tenant is on average £6,000.10 It is not in the taxpayers’ interest to evict more people.

With the prospect of thousands of tenants being subjected to eviction proceedings in Scotland – and those who cases are currently in the Scottish court system being put into default – Govan Law Centre has launched a ‘No evictions for bedroom tax’ campaign in the Scottish Parliament. You can sign our petition online on the Parliament’s website: http://www.scottish.parliament.uk/GettingInvolved/Petitions/bedroomtax

There are already almost 1,500 signatures after the first week, and we are calling for bedroom tax rent arrears to be treated as an ordinary debt so that tenants cannot be evicted because of the bedroom tax. We have the support of the STUC, Oxfam, Shelter Scotland, and Money Advice Scotland among others. The best solution is not to have a bedroom tax, but it will be in force from April 1st so we are calling on the Scottish Government and Parliament to use devolved powers to protect financially vulnerable Scots from this new poll tax.

I believe there will be scope for legal challenges to the bedroom tax based upon a number of arguments, including those around indirect discrimination – which were successfully upheld by the Court of Appeal in the recent appeal cases of Burnip, Trengove and Gorry.11 I also believe there are additional grounds of challenge which is why Govan Law Centre, on behalf of the Glasgow Advice Agency, has instructed a Queens Counsel to provide an Opinion on a possible strategy which could significantly lessen the impact of the bedroom tax for disabled people in Scotland. But we need to fight on all fronts, and we must make sure that no-one in Scotland loses their home because of the bedroom tax. I hope you can support our campaign.

4 See this short video by Professor Mark Blyth of the Watson Institute, Brown University, entitled ‘Austerity’: http://vimeo.com/15061570

6 Although that figure will rise to 66 by 2020, see paragraph 6 of the Impact Assessment: http://www.dwp.gov.uk/docs/social-sector-housing-under-occupation-wr2011-ia.pdf

9 See Scottish Council for the Single Homeless Briefing ‘Tenancy failure how much does it cost’ and ‘Crisis How Many, How Much?” Single homelessness and the question of numbers and cost by Crisis and New Policy Institute; and GLC’s Prevention of Homelessness report: http://www.govanlc.com/prevention%20of%20homelessness%20evaluation.pdf

11 IB v Birmingham CC (HB) [2011] UKUT 23 (AAC), LT v Walsall MBT 2011UKUT (AAC), RG v SSWP and North Wiltshire DC (HB) [2011] UKUT 198 (AAC).IB v Birmingham CC (HB) [2011] UKUT 23 (AAC), LT v Walsall MBT 2011UKUT (AAC), RG v SSWP and North Wiltshire DC (HB) [2011] UKUT 198 (AAC).IB v Birmingham CC (HB) [2011] UKUT 23 (AAC), LT v Walsall MBT 2011UKUT (AAC), RG v SSWP and North Wiltshire DC (HB) [2011] UKUT 198 (AAC). There was also a similar decision in KM v South Somerset DC (HB) [20011] UKUT 148 (AAC),