Reader, my head is bruised battered and cut and its costing me a fortune in bricklayers and plasterers at home. Do you want a wall knocking through at home by any chance? Give me a call point me directly at the wall in question and shout OBC as I have a tendency to do a Woody Woodpecker impersonation! I am even thinking of changing my name to Isaiah as I appear to be the lone voice crying in the wilderness about the OBC while social landlords are not preparing the way for it and simply telling tenants figuratively (though shortly literally?) to pick up thy bed and walk by concentrating on the bedroom tax.
The OBC will affect 3 times more than anticipated according to latest DWP estimate, it will pitch social landlord against social landlord, its crudeness will affect large families instantly in the fundamental flaw, it will affect smaller and smaller families with the systemic flaw which will destroy social housing , it will possibly make 130,000 families homeless next year, more the year after and I could go on and on ranting that it is (a) the biggest and most insidious of all the welfare reforms especially (b) that compared to the bedroom tax social landlords refuse to see the risk to them.
So it’s time to put some figures to it so that even if social landlords have Mr Magoo as their Finance Director they can see the issues and the brief discussion below reveals those issues are a massive risk to arrears far far greater than anything the bedroom tax gives.
The DWP figures in the final estimate of July 2012 was 56000 families at an average reduction of £93pw and of these 44%, or 24,640 were tenants in social housing. The revised figures given last week sees 171,000 affected in the first year (2013/14) a threefold increase is bad enough yet it also said this increases by 8,538 per calendar month or an additional 102,456 families per year.
If we then equate reduction in HB with the risk to arrears we see that in its first year 171,000 lots of £93 per week will be saved in HB a total of £830m. 44% of this is in social housing meaning a reduction in HB there of £365m in Year 1. The DWP estimate the bedroom tax will save £480m in Year 1 and £500m in Year 2.
In Year 2 the OBC will affect 273,456 people and lets keep the £93pw figure which gives a HB saving of £1.33bn of which 44% is £585m. So in the first two years the OBC will reduce HB by £950m in social housing and the bedroom tax £980m.
Year 3 lets assume bedroom tax follows same trend and goes to £520m (although it should be reducing with downsizing and better use of stock) making a HB saving / risk to arrears of £1.5bn. In Year 3 the OBC will affect 375912 people and again lets keep that average at £93 to make a £1.82bn saving of which 44% is £800m.
The OBC 3 year figure now becomes £1.75bn or £250m MORE than the 3 year bedroom tax one.
By the following year that increases to £730m more than the bedroom tax and the year after to £1.45bn MORE than the bedroom tax to social housing.
In 7 years time using DWP projections there will be 888,000 or so families affected. At £93pw average reduction and keeping this constant and not allowing for any inflation and not considering the impact of affordable rent which makes this higher and not factoring in the systemic flaw which sees the cap fall in real terms we see this gives a reduction in that year alone of £4.31bn of which 44% is £1.9bn to social landlords.
The aggregate of these 7 years becomes £20.56bn of which 44% will be in social housing amounts to £9.05bn. So we see the OBC having a £9.05bn risk to arrears while the bedroom tax holds at most a £4bn risk to arrears in this time.
Why social landlords deny the impact of the OBC and focus on the bedroom tax I don’t know. I do know they ignore its impact at their peril. Why today JRF focuses upon the (undoubted) link between Universal Credit and poverty when the OBC will cause a much greater threat to tenant poverty I also don’t know. It seems this elephant in the room is that big we cant see it! Even if the average OBC cut remains at its inception level of £93pw that is far more than the bedroom tax or any cut UC will produce!
That is a £4.852 per year cut and will impact massively on poverty and especially on rent arrears as families will feed and clothe their families before paying rent. Many of the readers of this will not be in that situation and working yet how would you feel about a £93pw cut? How would you manage?
I can’t answer the question as to why social landlords and organisations such as JRF are ignoring this level of cut and its impact. All I know is they shouldnt ignore it – and especially as it becomes worse each year and captures more and more families each year. That huge grey elephant has swallowed a ticking time-bomb and especially for rented housing as the only benefit to be cut is HB.