Spare room subsidy cut is saving far more than thought as many come off benefits altogether

The TUC funded group False Economy has discovered that the cut in spare room subsidy has caused an increase in rent arrears. This is unfortunate but not surprising. The change will be difficult in the short term while the tenants affected make adjustments in their arrangements. Whether taking in a lodger, getting a job, or moving to a smaller property, there will be a period of time before matters are sorted out.

Of course many started planning before April when the changes came in but it is human nature that others delay making changes as long as possible. It is right to offer transitional help.

Labour seems to have shifted towards calling for the spare room subsidy to be restored. The Shadow Work and Pensions Secretary Liam Byrne says: "This is the final proof, as if we needed it, that the hated tax must be dropped and dropped now."

I suppose at the next election Labour could say: "Yes we did want it dropped in 2013 but it is now 2015 and so it should be kept - the time to drop it has passed." I think that would be a difficult message. Probably we have that rare sighting: a Labour policy.

So how would Labour pay for reinstatement of the spare room subsidy? The Government modestly estimated that it would save about £540 million a year. That assumes that 660,000 households stay where they are, don't change their behaviour, but simply find the extra £15 a week in rent (on average) by cutting their spending on other things.

Scandal of the UN's attack on the spare room subsidy cut

Earlier this year the United Nations Human Rights Council ran a critical report on Canada . Among those making the criticisms were representatives from the Governments of Cuba, Iran and North Korea.

Now a left wing politician from Brazil complains that our Government's housing policy breaches human rights. The United Nations Special Rapporteur on housing, Raquel Rolnik, has called on the Government to restore the spare room subsidy.

Miss Rolnik is a former Minister in the Workers Party of Brazil, Parti dos Trabalhadores or PT for short, an extreme left wing political party supportive of the Cuban Communists.

So it is no surprise that her "investigation" of housing policy in the UK was merely a two week agitprop tour of assorted public meetings with her British comrades.

Shelter backs subsidies for the rich over new homes for those in need

The housing "charity" Shelter does not provide shelter for anyone. It does not own a single home. It is a political lobbying outfit. That's bad enough. Still worse is that it lobbies against policies that would reduce homelessness.

A stark example is Shelter's response to the Government's decision to allow councils and housing associations to charge market rents to rich tenants. The numbers can be argued over but the impact of the Government's proposals can only be to increase the supply of housing for those who need it. If, when asked to pay a market rent, the wealthy tenant move out that frees up a property.  If they stay and pay a higher rent that means money is available for new building.

The Government says:

All additional income arising from the policy will be available for reinvestment in affordable housing.
We would generally expect providers to use it to help fund new affordable housing, helping to meet housing need.

Cutting the spare room subsidy is working in Hartlepool

This week there was an article in The Guardian by Cath Purdy, the chief executive of the Vela Group housing association which includes Housing Hartlepool.   The article attacked the spare room subsidy cut or "Bedroom Tax" as she called it (failing, of course, to explain just how the measure could be defined as a tax).

She wrote:

More than 1,150 of our tenants have been hit by the bedroom tax. So far only 90 of these households have been able to move to smaller properties to avoid paying the tax. There are some who are understandably reluctant to move, as their family and friends live near their current home and moving away to a smaller home would have a negative impact on their emotional wellbeing.

In addition, there is a shortage of one- and two-bedroom properties within Housing Hartlepool's property portfolio. At the rate these homes become available it would take many years for everyone who needs a smaller home to be able to downsize.

Miss Purdy says "only" 90 households out of 1,150 have so far downsized. That is about eight per cent. But it is still early days. This reform was only introduced in April. Last month the BBC ran a report that "only" 80 out of 3,000 affected in North Manchester had downsized. That was 2.7 per cent. Gradually the numbers will rise.

She adds that there is a shortage of smaller properties. Yet when I asked Housing Hartlepool how many of their tenants were in overcrowded properties they refused to comment. Extraordinary. Do they not know? Or are they refusing to say?

Welfare reform is fair

Cllr Philippa Roe, the Leader of Westminster City Council, says the housing benefit bill is being reduced by £40 million a year in her local authority

We can all agree that the country has to live within its means. This applies, of course, to the single largest area of public expenditure, welfare. I also believe that it is now accepted, across all parties, that the amount we were spending on welfare had grown out of kilter with what we as a country could afford and indeed what was both fair and proportionate.

The necessity for this change can be perfectly illustrated here in Westminster. In this one borough, we witnessed a 60% increase in the number of housing benefit claimants, since its introduction in 2008, to some 6,000 households and worth some £280 million per year. This figure equated to over 10% of the total national expenditure spent on housing benefit.  Before the start of the welfare reforms, over 1,000 households in Westminster were in receipt of £500 or more per week in housing benefit.  Only 4% of the working population earn the £75,000+ per year required to afford rents at this level.

Of course, Westminster is uniquely affected by welfare reform, with some of the highest priced real estate in the UK and we have seen the effects of housing benefit caps more acutely than many other areas.

How Rochdale's council housing has been taken over by a mutual

"Zipping up my boots," sang Odyssey. "Going back to my roots, yeah." That is very much what is happening in Rochdale, home of the co-operative movement, and the Rochdale pioneers - 28 weavers - in the 1840s. It has a proud tradition of advancement through self help - rather than handouts from private charity or the state.

This tradition is being renewed now that 13,700 dwellings in Rochdale have ceased to be owned by the council and now belong to Rochdale Boroughwide Housing. This is not a council housing department, or a housing association, or an arms length management organisation. It is a mutual - owned by its staff and tenants. It would be naive to suggest it will be as independent of the state as the weavers. There will still be regulation and subsidies. The council will be "permanently embedded in the mutual governance."

So what will change? It's early days. The new status officially came about in June although it has been effective for the last year or so. ALMOs - and in recent years housing associations - are really just bits of the public sector - with the drearily familiar attributes of bureaucracy, delay, inertia, inefficiency and the "sod the public" ethos. It would be naive to imagine that RBH will be as attentive as a typical private landlord competing for the custom of tenants paying a market rent.

Why does Labour oppose converting offices to homes?

If there is an oversupply of office space and a shortage of housing then allowing the market to operate freely would correct this. The problem is that the market is distorted by planning regulations. There could potentially be hundreds of thousands more homes through converting surplus office space. A change in the planning rules - which allows conversion from B1 (a) to C3 - may not sound terribly exciting but it means the dream of home ownership could become reality for many more people.

It is also a market solution. Rather than requiring a subsidy, a substantial number of extra homes could be provided simply by the state getting out of the way. Why should planning officers meddle? The buildings won't change their exterior. Council should be pleased that they will obtain the New Homes Bonus and increased Council Tax revenue for doing nothing very much at all.

Yet the Labour Party is opposing it. Islington Council is spending money on (you guessed it) a Judicial Review. They object that there is no "affordable housing" included. This is the mindset that unless new housing is subsidised and controlled by the state then it doesn't count. Yet increasing the supply of housing will mean that more people can afford to get onto the housing ladder - especially in places like Islington.

Whatever you might read in The Independent, in Cornwall the spare room subsidy cut is working

More news on the truth behind the deferential treatment which The Independent gave to Labour's claims about the spare room subsidy cut.   Highlighting Cornwall in particular, it claimed that those facing a cut in the spare room subsidy would find it impossible to downsize due to the shortage of vacant properties. 

But the Guinness Hermitage Housing Association is busy arranging swaps in the county for those overcrowded in social housing properties.  And Cornwall Council has got in touch about its own arrangements:

Cornwall Housing, along with a number of other social housing landlords, is working in partnership to provide tenants affected by under occupancy and overcrowding the opportunity to make contact through Homeswap and housing options and advice fairs' across Cornwall.

So far events have taken place in Camborne, Bodmin and Truro, and the next event is on Tuesday 3 September at Bude. The events have proved highly popular, with over 50 households attending each event, and it is hoped that a number of exchanges will take place following these events. 

In addition to this Cornwall Housing's Welfare advisors, roles specifically created to support tenants affected by the welfare reform changes, are working with tenants on a regular basis supporting them to seek exchanges, register on Homechoice and deal with issues around debt and money management.

Spare Room Subsidy: Again Labour ignore scope for swapping with the overcrowded

The Labour Party are still attacking the cut in the spare room subsidy or "bedroom tax" as they call it - while not yet saying whether they would reverse this reform.

Labour have put in some Freedom of Information requests on the number of vacant one bedroom and two bedroom properties in social housing. On that basis they assert that those facing a reduced spare room subsidy will not be able to downsize. They add that suggesting this option is available is "a big lie."

According to their figures, from the 38 councils they selected, there are 99,000 families affected by the spare room subsidy cut. However there were only 3,803 empty one bedroom or two bedroom properties available.

Of course not all wish to downsize. Some prefer to take in a lodger, or get a job.

But the key point that the Labour Party and The Independent ignored was swapping. They forgot about the one bedroom and two bedroom properties belong to those councils which far from being empty are overcrowded. There are plenty of people around the country who would only to pleased to swop with those wishing to downsize.

Cutting the spare room subsidy will help the disabled in overcrowded housing

According to the English Housing Survey a quarter of a million families in social housing live in conditions officially acknowedged as overcrowded. Often they also have the challenge of one or more member of the household being disabled. There are 900,000 homes in social housing with at least one adult who is disabled or long term sick. There are many others with disabled children. Frequently these are also overcrowded properties.

Critics of the Government's changes to Housing Benefits to reduce under-occupancy often portray the change as an attack on the disabled, never mentioning the needs of the disabled in overcrowded accomodation.

It is right that the Government have made some exceptions from the new rules. A carer for a disabled person who lives in the accommodation as their home is included when making the the assessment of the number of bedrooms required. A bedroom is also allowed for a non-resident carer where the claimant or their partner requires overnight care. Children who have a disability such that they cannot share a bedroom with a sibling are exempt from the housing criteria.