Bedroom Tax for Dummies

Welcome to my Bedroom Tax part 9 in which I attempt to inform the reader in simple terms just what the hell the Bedroom Tax is! Or at least make a start on h.

Facts – Always a good place to start!

Even more so in this case as there is so much false information and made up lies about the Bedroom Tax which too many believe.  Whether it is the Sun (online version) which on Monday this week said it applied to private tenants or the Daily Mail (online version) on Tuesday which copied this article including all the errors; or whether that is  the coalition spin which is that council and housing association tenants – the social tenant – live the life of Reilly.  They have spare bedrooms which the state should no longer pay for.  Additionally, if the government makes the feckless social tenant move to a smaller property by reducing their Housing Benefit, the government save money is what the general public have been told.

Doesnt that sound sensible and right?  Yes it does but it’s a crock of horses**t.  The Bedroom Tax will cost MORE in Housing Benefit if tenants downsize.

(a) Who does the Bedroom Tax affect

Facts:

1. The government estimate the Bedroom Tax will affect 670,000 social tenant households with an average £14pw cut in Housing Benefit.  Government claim (wrongly see below) this will save £480m per year
2. The average household is 2.4 people so thats 1.6 million adults and children
3. Pensioners (in receipt of pension and or pension credit) are not affected and the Bedroom Tax does not aply to them as they have been exempted. (SEE UPDATE IN BOLD TYPE ON THIS BELOW AT END OF POST)
4. Therefore the Bedroom Tax only affects social tenant households of working-age who get Housing Benefit.
5. The governments own official data on who gets Housing Benefit reveals 3.4m social tenant households get HB yet about 1.6m – 1.8m of those are pensioners and exempt.
6. Hence the Bedroom Tax can apply to between 1.6 and 1.8m working age tenants
7. 670,000 social tenants will have their HB cut means it affects between 37% and 42% of all social tenants claiming housing benefit.

In summary at least one in three social tenants who receive Housing Benefit (in full or part HB and working or not working) will be affected by the Bedroom Tax.  It could be as high as 2 in every 5.

Yesterday, Channel 4 News ran a piece on the Bedroom Tax and made a false statement (inadvertently).  They said 660,000 affected out of 3.6m means 20% or 1 in 5.  As I have explained above its 1 in 3 or even 2 in 5 – something that public interest lawyers may want to note for the inevitable legal challenge to the Bedroom Tax.

(b) Why the Bedroom Tax will cost more in Housing Benefit

Last year the National Housing Federation (NHF) which is the lobbying umbrella group for housing associations released some data which nobody on any side of the argument disputes.

Of the 670,000 affected 180,000 are single people living in 2 bed social housing properties and last year only 68,000 1 bed social housing properties were let.

What does that mean?  If all 180,000 wanted to downsize to a 1 bed property, which is what the government say is fair, then 68,000 could move to a 1 bed social property but the other 112,000 would have to move to a 1 bed private property.

Some numbers.  A 1 bed social housing property is about £10pw cheaper than a 2 bed social housing property.  So the Housing Benefit saving is £10pw for 68,000 properties or £680,000 saving per week. This is a saving of £35.5m per year!

However, a 1 bed private property is about £35pw more expensive than a 2 bed social property.  This means the Housing Benefit bill increases by £35pw for 112,000 claimants.  An increase of £3.92m per week. This is an increase of £204.5m per year.

So just for single persons in 2 bed social properties to downsize would increase the Housing Benefit bill by £169 million per year.

That is why the Housing Benefit Bill will INCREASE if social tenants moved to smaller properties.

Note that the DWP, the government department responsible, estimate that 81% of those affected by the bedroom tax ‘under-occupy’ by just one bedroom.  This is about 543,000.  Take away the 180,000 single people who occupy 2 bed properties and this means the other 363,000 are either living in a 3 bed property when they need a 2 or in a 4 bed when they need a 3 bed etc.

Just as in the example I give above moving from a 3 bed social property to a 2 bed reduces HB by about £10pw yet a 2 bed private property costs about £35pw more than a social 2 bed so the HB bill would also rise there.  The same logic applies to the 124,000 underoccupying by 2 bedrooms – a 1 bed private flat costs more in Housing Benefit than a 3 bed council one, a 2 bed private flat more than a 4 bed council one.  In fact a 1 bed private flat in London gets £250pw in Housing Benefit and I doubt any sized social property has a rent of £250pw

In summary, the £169m per year increased Housing Benefit cost is a major underestimate of how much MORE the bedroom tax will cost the public purse.

It also means the government’s argument that this will save money is false, or more correctly they have lied!

Notes:

Channel 4 News piece Wednesday was mostly very good and alerted many to the bedroom tax farce. It also said there are 600,000 looking for 1 bed properties yet there are only 300,000 1 bed social housing properties in total.  I don’t know where C4 got that 300,000 1 bed properties from, though it sounds realistic.  It also means those with 1 bed properties are not going to give them up doesn’t it, which must means more and more that do downsize will have to downsize to private 1 bed properties which must mean HB bill will increase and not decrease.

That would mean 300,000 reductions of £10 per week and 300,000 increases of £35 per week meaning an increase of £7.5m per week a trifling £391m per year increase not a £480m per year saving!

Same C4 News programme had an interview with Steve Webb, a junior minister at DWP.  He was asked about bedroom tax (remember £480m pa cut to tenants) and he avoided answering all questions and only responded with we have put £30m into discretionary housing payments (DHP) for this.

So:

(a) Government has put in £30m to help tenants with a £480m loss hence 1 in 16 at most will get help

(b) The national lottery says a punter has a 1 in 14 chance of winning – which shows just what a lottery DHPs will be and outs that into context.

(c) The £30m DHP budget is there also for private tenants who have a shortfall in their benefit received and their rents – very common in the private rented sector.  Last year housing benefit rate to tenants was frozen altogether while private rents went up by more than 3% so many more private tenants will want a share of this £30m pot.  This year housing benefit to private tenants is increasing by 0.59% and private rents will likely rise again by 3% meaning more and more private tenants will want some of that £30m pot.

In summary, even at best the DHP pot will help 1 in 16 of those affected by the bedroom tax and if that happens 15 out of 16, or 94% of those with a bedroom tax cut wont get any DHP money!

Sorry I said simple language didn’t I – The government have lied again.

Tomorrow I will tell you in the next instalment of Bedroom Tax for Dummies why you could be evicted with a criminal record if you do as the government says and take in a lodger.

UPDATE late Friday 1st February

I promised to publish Bedroom Tax for Dummies 2  – the lodger issue today and havent.  This is because it is a minefield even for me to understand and then explain in anyway let alone a simple one.

For example what is known is that a lodger or boarder does NOT count as part of your household for bedroom tax purposes.  So if you take one (or more) in you will still get the bedroom tax cut.

That’s the easy bit. However in looking into this the lodger is not classed as a non-dependant deduction for Housing Benefit purposes (which would mean you could lose £65 per month or more from your Housing Benefit on top of your bedroom tax cut) but is classed as a non-dependent deduction for Council Tax Benefit purposes so you will lose money there and will have to pay CTB.  Or at least I assume that will be the case with Council Tax Support which is replacing Council Tax Benefit yet I can’t find anywhere where it says this will continue under the new Council Tax Support, which in any case is for each local council to devise and not for central government.  So the answer is nobody knows! Still following this?

Then if you are allowed to keep the first £20 of any income from a lodger what is the impact on the rst of the wekly rent you charge.  Again very difficult to find and despite the “Rent-A-Room” guidance on the government website this doesnt say anything at all about how this will be treated under Universal Credit – Oh dear not another thing the government have overlooked…Yes!

Then you are allowed to earn under £4250 per year in renting out part of your home, or £81.45 per week but if you go over this you will have to complete a Tax Assessment form at the ned of the year.

Then what happens if the lodger leaves and hasnt paid rent?  You have told HB and CTB so you are getting paid on that basis so how long will it take for that change in circumtances to correct your payments?  You really do not want to know.

What about did you know there are legal regulations about how you charge your lodger for his or her share of any electricity or gas?  No neither did I.  I also presume, though again hard to find, that as a landlord for a lodger you need electrical safety, gas safety and other certificates and of course have the correct form of tnancy for them – excluded occupier or not?

Then if you are renting out a room which is below the minimum bedroom size, which the 1935 Act covers yet Government don’t want you to know about, you could well be committing a criminal offence, which, though unlikely but not impossible, could mean your landlord could evict you for the comitting of his criminal offence.

What a lot of hassle eh? Far easier to think about it as I did on twitter by a pithy Limerick

There was a a tenant called Rodger

Who was forced to take in a lodger

In a room six by six

for his bedroom tax fix

Which I deliberately left the last line for others to complete and which was firstly done by an eminent barrister who said:

“was scared that his daughter would be raped by the old codger“

Quite rightly there as no way to compete with that, despite not tripping off the tongue with the same scansion of spondees and dactyls (never mind but yes I did Latin at school….long story!) and in summary the government idea to take in a lodger (who would you think need a CRB check though that may infringe his human rights – also from eminent barrister) is one of those ideas that comes out of your mouth before you put your brain into gear and you regret saying instantly.  It is a bloody stupid idea in other words.

The very few that do take it up, which will be out of ignorance of some if not all of the above issues, will if the lodger claims Housing Benefit, or more correctly LHA as your dear tenant will become a private landlord, increase the overall Housing Benefit bill and the taxpayer pays out more

UPDATE

it has now become evident that 90,000 pensioners WILL be affected by the bedroom tax from October 2013 but not before. See my post here which explains this very sneaky change the government dont want to be publicized!

Bedroom Tax part 8 – far bigger cuts to come with the benefit cap!

I have published 7 bedroom tax blogs in the last 10 days – the first one is here and includes links to the other 6 – all of which have been very widely read.  Much more widely read than any other posts and I have had TV and radio and other media producers and researchers and reporters directly contacting me over them as well as a huge number of tenants as well as the usual housing professionals and that is strange for two main reasons.

The first is that earlier published blogs such as the systemic flaw in the overall benefit cap, the reporting of the freeze in LHA in 2012/13 and the 0.59% increase in 2013/14 not the 2.2% figure the government claimed were firsts.  The same can be said that I first posited the idea that the shared accommodation rate will be applied to social housing as many now believe and the first to say the banning of HB to the under 25s was all hot air.

The second reason is the more interesting one.  I have always argued that the worst of the welfare reforms was the overall benefit cap (OBC) which will hit vulnerable families much harder than the bedroom tax. 171,000 families penalised with an average £93pw cut is much more at circa £830m per year is clearly higher than the £480m the government claim the bedroom tax will save from an average £14pw cut to 670,000 households.  Then factor in that the systemic flaw will see more and more families caught by the OBC each and every year and you see my reasoning.

I have also been consistently critical of social landlords for in my view overly and often solely focusing on the bedroom tax and ignoring the OBC.  Then add in my post this week that the bedroom tax will cost more than it claims to save – a net cost to the public purse – yet still create misery for hundreds of thousands of vulnerable families.

Yet that outrage pales into insignificance compared to the OBC and the misery that will create and because the cuts are on average almost 7 times the weekly bedroom tax amount they will undoubtedly lead to eviction and homelessness.  This is turn will create even more cost to the public purse and so greater levels of misery and still no welfare bill saving.

Today I have come across a document – a very important document that will be regarded as a seminal document – in the welfare reform agenda.  It is a 117 page report entitled “Benefit Limits and Housing Affordability for Private Tenants” by Gareth Morgan and I would advise every social housing tenant and every social housing landlord to read it.

Question 1: Hang on Joe, how can a lengthy document for housing affordability for PRIVATE tenants be essential reading for SOCIAL housing tenants and landlords?

Answer: Because a tenant household can see at a glance how much

(a) They are entitled to in welfare benefits;

(b) How much they are entitled to if they are a 1 parent or 2 parent household with anything from 0 to 6 children;

(c) How much this leaves them in ‘housing payment’ (the replacement for HB and LHA) from the overall benefit cap;

(d) How much of a cut the OBC will give them in every local authority (BMRA) in the UK

Because a social landlord will be able to see:

(e) What household composition (1 parent / 2 parent ‘x’ number of children) presents a higher risk of arrears due to these cuts

(f) That as ‘affordable (sic) rent’ is 80% of market rent how affordable rent directly creates huge risk to arrears and too risky; and finally

(g) Get that the OBC is a much bigger risk to social housing in arrears and to the prevailing social housing model than the bedroom tax.

Question 2: Joe you must be getting a cut of any future business from this? Don’t consultants get asked to ‘recommend’ things all the time?

Answer 2: No and Yes.  No I have no financial interest in this at all.  Yes, consultants do get asked to ‘endorse’ all sorts of stuff all the time but I never have got involved in that. And by the way the fact this is free and can be freely downloaded removes any monetary interest issue

This document is lengthy but that means it is comprehensive.  Further it is written and presented in an objective way and details facts (and not riddled with subjective comments and inevitable bias that every blogger has).  Moreover, it lists table upon tables of facts in a very accessible way so anyone can see at a glance their entitlements now and when Universal Credit comes online.  In other words in welfare and housing benefit terms all a social or private tenant and social or private landlord need to know.

A cursory glance will reveal all I have been saying for the last 12 months – that the OBC is far more financial punitive than the bedroom tax. The OBC holds far more and higher level financial dangers to social tenants and social landlords, that the OBC will cost more than it saves and yet again and like the bedroom tax is a futile and inept policy; and that social landlords have been wrong to ignore the OBC in favour of the bedroom tax.

The OBC is much worse than the bedroom tax and here’s why:

Background

The overall benefit cap (OBC) caps overall benefit (welfare benefits such as JSA or dole) and housing benefits in one crude cap.

The way it works is:

• Start with the £500pw overall cap figure
• Then deduct the amount of welfare benefits – e.g. Couple with 3 children of £327.05pw
• What is left is £172.95pw which becomes the maximum that will be paid for rent as HB or LHA is paid now

So if you are a couple with 3 children on benefit and you lived in a privately rented property in London with a rent of £340pw (all of which is currently met by LHA) you will this year only get £172.95pw towards that rent and have to make up the other £167.05 yourself.

So if you are a private tenant you WILL be evicted very promptly and you WILL become a homeless family.  There is no ‘if’ about this only a question of when

If you are a couple with 4 children you will get £392.76 per week in welfare benefits thus leaving a maximum HB of £107.24 pw towards your rent.  If you live in a Housing Association 3 bed property in London paying £150pw which you now get in full, you will soon have to pay £43.24pw yourself for your rent.

And you thought that the average £22 per week bedroom tax deduction in London was bad!

Note if you are a couple with 4 children living in a 4 bed HA property and you are also subject to the bedroom tax I have absolutely no idea if you then get a further 14% cut.  Though neither does the coalition as they have not said anything at all about this!  This of course goes to show how inept the impact assessment was on the overall benefit cap in the first place!

I return to the welfare benefit total of £327.05 per week – the rate for a couple with 3 children – which leaves £172.95 as the maximum that will be paid towards your rent,  The official government release on private rent levels is done by the Valuation Office (VOA) and their figures contains details of almost half a million private rent levels (excluding service charges) right across England.  They reveal the average 3 bed private rent level is £765 per calendar month (excluding service charges) which is £176.67 per week plus service charges.

So the couple with 3 children living in privately rented 3 bedroom accommodation as a national average will have to pay towards their rent from their dole or child credit, Heaven help them if a fourth child appears as the residual maximum of £107.24 will only be able to afford the average 3 bed private rental in just Barnsley and North East Lincolnshire – that is 2 areas out of 371 local authorities in England and not in the other 369!

In 369 out of 371 local authority areas a couple with 4 children can’t afford to rent privately and will run up arrears very quickly and also very quickly be evicted and become a ‘homeless family’ likely to be accommodated in temporary accommodation such as a B&B.

The same couple with 4 children will find the same happening right across London in social housing.

Yes reader you can just picture the private landlords in Stoke and Barnsley and Hull and Boston rubbing their hands with glee at the London councils exporting their homeless cases to these cheaper areas with the private landlord charging so much more than they get now from Stoke Council, and in turn evicting non-arrears cases to accommodate these much higher-paying new tenants!

Yes that’s right London’s homeless families will create a new homeless case in Stoke or Hull or whatever ‘low-cost’ area they are sent packing to by the London councils.

Let me put that in very plain and simple language for all the new readers, mostly tenants that have begun to read my bedroom tax posts.  Last year you may recall a right old rumpus when on the national news it was revealed that a council in London, (Newham to be exact but not the only ones doing this) was asking private landlords in Stoke to house their homeless families.  The proverbial hit the fan with the general public.  You can’t just ship families 130 miles away! What about new schools? What about their friends and families etc.  And all of course right. Yet two things.  One is happening still and to a greater extent and will increase.  The second is what many will not remember – the details of what Newham offered to private landlords in Stoke.

The offer was Newham would pay private landlords 90% of the housing benefit plus a further £60pw.  In Stoke for a 2 bed property this meant a private landlord would get £141pw per house rather than the £90pw – an increase of £51 per house per week or £2650 or so per 2 bed house more per year and a percentage increase of 57%.

If you were a private landlord would you want a 57% increase in your income?  Of course you would that’s a silly question.  If you were Newham Council would you want to pay £141pw per family or you would prefer to pay £500 – £1000 per week to a local private landlord?  Again a silly question: Yet that is what is still happening and will explode once the OBC comes online in the summer of this year.  Note it was supposed to be April 2013 but the government delayed the OBC and instead are running 4 pilot areas for it in London and say it will be national in the summer.

Yes you thought the bedroom tax was bad enough didn’t you!  The OBC is much worse isn’t it? There’s a small chance the bedroom tax will lead to eviction, with the OBC it’s a cast-iron certainty!

Ok new readers if you are still reading this firstly close your mouth which is agape with this horror story.  Secondly note that this gets worse every year and no I am not kidding but it is difficult to explain what is known as the systemic flaw in the OBC.

Try this.  We know that welfare benefits are only going to rise by 1% this year and the following two years and this is below inflation.  We can (almost) certainly assume that the £500pw cap figure will also rise by 1% in the next 3 years yet rents will rise by at least 3.1% this April and only last week Stevenage Council increased their rents by 5.1%.

The problem is that as rents rise faster than the cap and welfare benefits that the cap reduces in real terms.  A small table below explains and I have used the same examples as above a cap of £500pw (rising at 1% inflation) a couple with 3 children for the welfare benefit level (again rising by 1%)and the average 3 bed private rent level of £176.67 rising by 3%:

Year	Cap figure	Welfare benefit	3 bed PRS rent	Shortfall
2013/14	£500.00	£327.05	£176.67	£3.72
2014/15	£505.00	£330.32	£181.97	£7.29
2015/16	£510.05	£333.62	£187.43	£11.00

As you can see from the shortfall column because rents rise faster than the cap and welfare benefits the amount the tenant has to pay – the shortfall – increases year on year.  Ah yes well £11 isn’t much you say? Perhaps but that’s for a couple with 3 children and hardly a large family.  The couple with 4 children can add £65.67 to each of these shortfalls – yes you’re right they will fall into arrears and be evicted and become homeless and yes sent to Stoke (not that there is anything wrong with Stoke of course!)

But let’s stay on the couple with 3 children and look what happens over a few years and below shows what a simple 3% rent level rise does when the cap and welfare benefit level remains at 1%

Year	Cap figure	Welfare benefit	3 bed PRS rent	Shortfall
2020/21	£536.07	£350.64	£217.28	£31.85
2025/26	£563.41	£368.52	£251.89	£57.00
2030/31	£592.15	£387.32	£292.01	£87.18

• The systemic flaw means that the shortfall, the amount tenants have to find themselves increases dramatically from £3.72 per week to £87.18 per week;
• Or from 0.77% of the cap figure to 14.7% of the cap figure – a massive rise. 
• Or the shortfall that the tenant has to pay towards rent is 1.14% of their welfare benefit this year but rises to 22.51% of their welfare benefit by 2030!!

Again this is worse with couples with 4 or more children and worse for couples in high rent areas with 3 children and even with 2 children!

Basically the benefit cap hits more families each and every year when rent increases rise faster than welfare benefits and/or the cap.  That is the systemic flaw in the OBC explained in simple terms.

Note well I have used 3% rent rises which mirrors the private rented average rent increase last year.  This year in social housing many rent increases will be much higher than this and as I mention above Stevenage has increased council rents by 5.1%.  3% overall is a very low figure for rent increases compared with the past decade or more and my figures above are on the conservative or low side for tenant shortfalls.

Still think the bedroom tax is the more severe welfare reform policy?  No didn’t think so!

Do you know about the above impacts of the benefit cap?  No! Why not?  Oh I see your social landlord has said something like our rents are only £100pw and we have so few tenant couples with 4 children on £392.76 per week welfare benefits.  Let me give you the figures for a couple with 4 children in a 3 bed London social rent of £150pw.

This year – Cap £500 less £392.76 welfare benefits so £107.24 as maximum HB towards the rent of £150.00 – Yes a tenant shortfall and a reduction in HB of £42.76.  Using the same 3% figures for rent rises (though social tenants should expect 5% rises and more) the amount this tenant family will have to pay each week by 2015/15 will be £54.50 per week.

• By 2020 this increases further again and so a couple with 4 children cannot afford to live in social housing – the cheapest form of rented housing – in London.
• 5 years later a couple with 3 children will not be able to afford council housing.
• 5 years after that a couple with 3 children anywhere in the UK will not be able to afford council housing.

So where will they live!!!!  Sorry reader I have a knack of asking simple questions like that and what is a bedroom!  I must stop that mustn’t i?

You still think the bedroom tax is bad.  You know the one social landlord will take 5 or 7 years to downsize all under-occupying tenants and will no longer exist?

Hang on how can social landlords develop new properties NOW? Eh?

Social landlords develop new properties based on at least 30 years of rent and up to 60 years of rent.  Yet if in 30 years time the only household that can afford a council or housing association property is a couple with 1 child and then in 60 years the only household is a single person with no children – which is what the systemic flaw in the OBC means – then your local council or housing association would be bloody stupid to build 3 bed houses now wouldn’t they?  You know the same social landlords who have been saying the OBC doesn’t affect us!!

It also means that the few remaining private landlords that are willing to take families on benefits need their bumps read.  As soon as they realise the above they will drop housing benefit claimants like a hot potato.  So where will all the 1.65m private tenants now claiming housing benefit live? Apologies reader I’m asking simple questions again aren’t I?

What was that?  You thought the coalition hadn’t thought the bedroom tax through properly!  I see you are now realising that when the government simply said £500pw (net) for those on benefits was too much to pay that this pithy superficial spin sounded right?  Yes it did sound right didn’t it?  Yet that old saying comes to mind, you know the one, when something sounds too good to be true, it never is is it?

Is that why you were confused that this coalition said they would bring down the costs of welfare spending yet it is £14bn higher than when they took office and Cameron said this month it will rise further?  Yes that doesn’t make sense reader does it?

But don’t take my word for it.  Have a quick look at the excellent tables in Gareth Morgan’s excellent and seminal paper that state the precise figures.  Go back and read that welfare benefits will increase at 1% for the next 3 years…you know the ones the Tory-led Coalition told us were fair this month.  Get your rent level now and think how much did it go up by last year (probably 5.7% and possibly a further £2pw on top).  When the 3.6% (again possibly with a further £2 on top) is notified to you in the next month which it has to be for social tenants and your landlord has to rise by this maximum amount due to the higher risk of arrears the bedroom tax, the OBC and direct payments give to them – and then use a simple spreadsheet or even a calculator and a pen and paper.  The figures are correct and they reveal the coalition policy of the overall benefit cap and what a monumental pig’s ear it is!

Yet remember I’m just the messenger not the architect of this farce.  That belongs to Iain Duncan Smith the DWP Minister, yes him the one that Cameron tried to move (ie get rid of) in the last reshuffle but refused to go.  You know the one even the most ardent Tories admit was the worst party leader (of all parties) in the post-war period.

If you are a tenant ask the government and they will say we will not allow London councils to export their homeless cases.  Yet they are doing it will increase this activity and have no alternative but to do this.

If you work in housing there is only one way and one way only that the systemic flaw can be eradicated.  That you will be pleased to read is to peg social and private rent levels to 1% per year along with the cap and welfare benefits. (Cue screams of horror from every social landlord!)

That, short of the coalition abandoning the overall benefit cap, is the only way to prevent the homeless diaspora, the only way to prevent private landlords from pulling out of the benefit claimant market altogether; the only way to prevent social landlords out of financial necessity and survival refusing to house a family with more than 3 children, the only way to have any logical rationale to build ANY new properties..I could go on.

Oh sorry I forgot, social landlords will always house the most vulnerable – Yes they want to do that I fully agree but that phrase will become as clichéd and dated as our rents are only £90 per week the benefit cap won’t affect us!

Bedroom Tax – overcrowding more illegalities and perversities

Remember the Waltons? No not goodnight John Boy, goodnight Mary Ellen …the sextuplets born in Wallasey in 1983. You think they would have turned out differently if they lived in a 2 bed house…as that’s all they would have been entitled to under the bedroom tax. Wonder how they would have coped in a 10ft by 7ft bedroom? Sorry getting ahead of myself there wasn’t I? With the government refusing to determine a minimum bedroom size it could have been 6ft by 6ft as Sally Adams has commented on one of my blogs from August 2012 on what is a bedroom a room size of 6 x 6 she is having classed as a bedroom and being hit by the bedroom tax!

“Same sitituation going to fight it out 2 bedroom and a box room 6foot by 6 foot. Wat the f…k Yh and it used to be upstairs bathroom witch they moved by kitchen so we don’t even hav toilet upstairs and they want us to pay for that lol”

Yes that’s 36 sq/ft – a bedroom…allegedly…one that’s 33% smaller than the 48.5sq/ft room that a private landlord in Reigate was successfully prosecuted for renting out last month, but still big enough under this governments plans for the bedroom tax to house Ruth, Luci, Jennie, Sarah, Kate and Hannah Walton – that is all they need!

Bunk beds have a floor area of 19.5 sq.ft each so 3 sets have a floor area of 58.5 sq.ft, though knowing this government and maths I’m sure IDS will be able to tell us how we can fit 3 sets of bunk beds into a 6ft by 6ft room!

One room 6 feet by 6 feet with 6 fifteen year old girls – that’s this coalition’s bedroom tax definition of need!

It is not just the absence of a definition of the minimum bedroom size that is irrational it is the de facto definition of need for bedrooms the bedroom tax does have that is irrational as the above example proves! Yes as I said yesterday the coalition have determined in the bedroom tax regulations the definition of ‘need’ but absolutely rule out a minimum bedroom size definition.

Anyone can see just how irrational that is, everyone except the government of course! Though that statement assumes the coalition are capable of thinking which is a huge assumption in itself and especially in the case of the bedroom tax. It is irrational to not define a minimum bedroom size, irrational to say 6 fifteen girls only need a 6ft by 6ft room and irrational to absolutely define one and not the other.  It is also unlawful as I explain later.

The Walton sextuplets example is of course an extreme case though it is used to highlight that the bedroom tax is irrational. It is also a criminal offence under the space standard as defined in law in section 326 of the Housing Act 1985. I quote directly from a House of Commons Parliamentary paper (SN010113) from 2011 in which it discusses overcrowding and size standards – the exact same issue as the bedroom tax.

“This standard works by the calculating the permitted number of people for a dwelling in one of two ways. The lower number thus calculated is the permitted number for the dwelling. One test is based on the number of living rooms in the dwelling (disregarding rooms of less than 50 square feet):

• one room = two persons
• two rooms = three persons
• three rooms = five persons
• four rooms = seven and a half persons
• five rooms or more = ten persons plus two for each room in excess of five rooms.

A child below the age of one does not count and a child between the age of one and ten counts as a half person. (Another example of the fractional person I discussed here in ways to get around the bedroom tax!)

The other test is based on floor areas of each room size:

• less than 50 square feet = no-one
• 50 to less than 70 square feet = half a person
• 70 to less than 90 square feet = one person
• 90 to less than 110 square feet = one and a half persons
• 110 square feet or larger = two persons.

When originally introduced in 1935 the standards were viewed as a threshold that could be strengthened: The standard laid down need not be regarded as the ultimate ideal to which we should work. It is one upon which it is possible to begin to get this reform underway.

Breach of the statutory overcrowding standard is a criminal offence. When the standard was originally devised in the 1935 Housing Act it was aimed at dealing with overcrowded conditions in the private rented sector before the Second World War. Local authorities have the power to take action against landlords of overcrowded properties on a tenant’s behalf. However, where a statutorily overcrowded household lives in council housing, the local authority landlord cannot take legal action against itself without the express consent of the Attorney General. Shelter has noted that the Attorney General has never agreed to let a case of overcrowding by a local authority proceed to court.”

Anything under 50 square feet is not a bedroom and IS defined in law and has been for 78 years IDS and DWP so please note!

Go back to my 2 bed /4 and 3 bed /4 example and 50 to 70 square feet is for half a person so both are not underoccupying yet the latter are hit by the bedroom tax – perversity writ large!

Now go back to Sally Adams example above.  Her third ‘bedroom’ that is 6ft by 6ft is deemed a bedroom for bedroom tax purposes yet contravenes a 1935 Act!  Yet ifs someone did reside there and let’s say she took in a lodger as the coalition say she should then she would be overcrowding and liable to prosecution by the LA…well only if she didn’t live in a council house!  If she lives in a housing association property or in private rented accommodation she would.  Does this then mean she has a challenge to this under the HRA? She is being denied the opportunity to stay in her home because she can’t rent out the ‘room’ to a lodger which she needs to do to be able to afford the bedroom tax which shouldn’t in any case be applied because it is not a bedroom!

How about the Walton sextuplets?  Yes the bedroom tax regulations say all siblings under 16 can share a room as I highlightedd yesterday in the official guidance of the A4/2012 HB circular.  Yet that guidance is unlawful as it contravenes the 1935 Act!!

Confused yet?  Read the rest of the very readable HoC paper and then ask why the bedroom tax regulations flouts all the available evidence on overcrowding and Housing Law.  Also bear in mind that HoC papers are perhaps the most objective discussions you can read given they are prepared for all MPs of all parties and so by definition (no pun intended) avoid subjectivity and bias.

You could also ask why if the National Housing Federation predicted in 2009 that overcrowding would soar 15% because of the recession and mentioned in the above paper why it hasn’t updated this to reflect the vagaries and irrational bedroom tax aspects I am discussing here!

The bedroom tax does increase overcrowding and statutory overcrowding in its definition of ‘need.’  It is irrational for that reason too.

The bedroom tax by not defining a minimum bedroom size, despite Housing law since 1935 having a minimum bedroom size can and is being applied unlawfully I would argue in the case of Sally Adams.

Time for yet another comment on my post of yesterday on the bedroom tax and how to avoid it.  This time from Mark Kneale:

“One solution put forward has been to rent out the extra bedroom/s. Would the minimum bedroom size apply to all lodgers, even if it does not apply to the tenants? If it comes down to each local authority to apply rules for HMOs, can it be challenged that some authorities prohibit lodgers in small bedrooms while others don’t?”

As my beloved other half said to me over the weekend, there is no such thing as original thought so don’t you come across as an arrogant sod in all these bedroom tax posts?  You can see that I haven’t just come to the bedroom tax debate having walked the road to Damascus.  Yet that is a huge point.

If I who inhabit the strange and complex and niche world of supported housing and exempt accommodation can see (with prompting) all the irrationalities and perversities and potential illegality of the bedroom tax policy then just what the hell have social landlords and social tenant groups been doing this past 18 months?

My primary role since 2003 has been to challenge local authorities who have sought zealously to reclaim SP funding from smaller specialist housing support providers.  So while techniques (and obtuse thinking?) in challenging decisions are transferrable skills I have used here in the bedroom tax, overall benefit cap and other irrational welfare ‘reform’ discussions, it surely cannot be the case that these potential challenges to the dog’s breakfast that is the bedroom tax have not been seen by social landlords and social tenants and social tenant groups.

Time for landlords and tenants to sit in a darkened room, highlight the potential challenges and then go see, individually or collectively, those who could challenge (lawyers, opposition MPs – yes they deserve huge scorn!) this pernicious policy known as the bedroom tax and stop bloody moaning about the consequences.

Get off your respective arses and challenge!

Update 12.50am Tuesday

Just published the above and had some more thoughts?

Can the government be charged with conspiracy to commit a criminal offence?  Probably not yet that is what their guidance advises local government to do.  It’s also what their guidance on taking in a lodger to mitigate the bedroom tax does if the ‘spare’ ‘bedroom’ is not in fact a bedroom.  Even more bizarre is that in law the local authority can prosecute a housing association tenant who does this!  No this is not a script from Yes Minister or The thick of It, this is official government policy!

How about can tenants sue landlords for conspiracy and actually creating a criminal offence?  This is much more interesting.  If a social landlord says a property is a 3 bed property when its only 2 bed and a ‘boxroom’ and this leads to the bedroom tax being imposed.  Then can the tenant sue the social landlord for the complicity here and for the fact that the smaller boxroom is not a bedroom under the 1935 Act?  If the social landlord by stating it is a bedroom contravenes the space standard from the 1935 Act and exposes the tenant to prosecution under it for inhabiting that room is the social landlord exposed to a legal challenge from the tenant?  Further according to the space standard the spare room size would only have an occupancy level of half a person and not a full one so how can that be one bedroom too many under the bedroom tax?  It surely is only 0.5 of a bedroom more than the occupancy ‘need’ and therefore less than the one bedroom ‘spare’ for the bedroom tax to be applied!

In my post yesterday that said landlords should accurately classify a smaller room measuring 9 x 7 ft as 0.9 of a bedroom which is what the official bedroom tax guidance says – and so get around the bedroom tax – then perhaps social landlords especially housing associations (who unlike councils landlords appear immune from legal exposure) should reclassify the 9 x 7 ft boxroom as 0.5 of a bedroom instead.  Which is more accurate?  Oh I see the bedroom tax now asks us to define what is accurate!

The farce of the bedroom tax gets deeper and deeper the more you look doesn’t it?

I’m sure the potential legal implications are not covered comprehensively above yet they do place a huge burden on social landlords and particularly housing association landlords.  Interesting that Lord Freud said yesterday in front of the select committee on welfare reforms that one of his key tests for direct payment of HB was that housing associations – and he made that distinction from other social landlords such as councils very clear – was for the reform not to penalise housing associations.  Yet that is exactly what the bedroom tax does to housing associations Lord Freud as the HoC paper above confirms – they can be prosecuted if they follow the DWP bedroom tax guidance but council landlords can’t!

I wonder why the NHF have not raised this very interesting ambiguity with the government.  You work for a HA and will be the one responsible for dealing with HB queries over the numbers of bedrooms?  My apologies for the sleepless nights this has just caused you!  What was that you are going to see your union and demand they ask your in-house legal team issue a full and comprehensive policy on that role?  Good thinking I don’t blame you at all!

Hmm does a council need the Attorney General’s permission to sue an ALMO?  Cue ALMO executive management teams scurrying around to find out…and write a policy just in case.  Cue Unions and housing lawyers and employment lawyers rubbing hands with glee…

Just think of how many other consequences of this dog’s breakfast known as the bedroom tax were not found in the DWPs impact assessment.  Just think how many a darkened room with landlords, tenants, lawyers and union reps could find…

What did the junior government minister say the other day…oh yes if there’s something we haven’t considered in the bedroom tax or new matters come to light we will reconsider it!

Ahem!!

Update and correction

Some have pointed out that the Walton sextuplets would be entitled to 4 bedrooms under the bedroom tax and of course they are right.  My fault for misleading by misreading the bedroom tax guidance.

However – under the space standard I mentioned above and I have cut and pasted below the Waltons could still be entitled to a 2 bed house. Eh?

“This standard works by the calculating the permitted number of people for a dwelling in one of two ways. The lower number thus calculated is the permitted number for the dwelling. One test is based on the number of living rooms in the dwelling (disregarding rooms of less than 50 square feet):

• one room = two persons
• two rooms = three persons
• three rooms = five persons
• …..”

The 6 children all count as half a person making 3 and the parents count as 2 persons making 5 in total which is a 2 bed house with one living room used as a bedroom (three rooms),  When there is no ‘living room; to be classed as a bedroom this still makes a requirement for a 3 bed property and not a 4 as the bedroom tax would state. 

It would be wrong to see this as inconsequential however or just an obtuse argument.  If HB officers have to decide the number of bedrooms and rely upon the social landlord to state its view – which they do all because the government refuses steadfastly to define a bedroom – then a 4 bed property with two living rooms could see the Waltons family be under-occupying and subject to the bedroom tax.  The bedroom tax regulations allow much subjectivity and for a HB officer in Liverpool to have a different view to a HB officer in London or Stoke or anywhere else.  The guidance is therefore irrational and incomplete.

This line of argument features greatly on many of the Facebook bedroom tax sites.  There are many 3 bed ‘parlour houses’ as they are known which is 3 bedrooms and a second living room or ‘parlour’ and so many social landlords have already apparently said these are 4 bed houses for bedroom tax purposes, and even with the tenancy agreement stating they are 3 bed houses!  This specific issue has led to tenants rightly in my view stating social landlords are complicit in the bedroom tax.

And if wish to be confused some more this makes these 3 bed / 7.5 person properties!! Yet does it?  What if the smallest bedroom IS less than 70 square feet is it a bedroom?  This reveals (again) the absurdity of the bedroom tax theory when I remind you again the reduction kicks in when one there is one BEDROOM more than needed and not one ROOM.  The same 3 bed parlour house could see a single parent with a ten-year old daughter and eleven year old son be deemed not subject to the bedroom tax by one HB officer in London but see the Waltons deemed to have a 14% cut in their HB by another in Liverpool! There is that much subjectivity in the guidance and that can’t be right!

Rip it up and start again, I say rip it up and start again…I hope to God you’re not as dumb as you make out- for some reason, that old song from the 80s by Orange Juice.  Yes it can apply to my mistake above (which bizarrely could still be valid that the Waltons only need a 2 bed house!) but far more so to the coalition and this dog’s breakfast of a policy.

 

The Bedroom Tax just doesnt measure up…and how to get around it!

Last week I put out a succession of posts on the bedroom tax, or if you want to give it its proper name the under-occupation charge.  The first post asked two simple questions namely 1) Is the bedroom tax lawful? And 2) What is a bedroom?  Subsequent posts added more to the lawfulness question, revealed that there is a private sector dimension to the bedroom tax, discussed how the bedroom tax will cost more than it claims to save; that the bedroom tax could act as a catalyst to widespread take-up of benefits known to be due but not claimed (and £15bn alone is not taken up in HB and WTC) and finally that social landlords efforts in (a) challenging the bedroom tax and (b) raising awareness of it to their tenants have been inept.

These posts were widely read and many more similar posts have been written in the last week with some saying the bedroom tax will lead to civil disobedience as happened with the poll tax and then late on Friday a junior minister saying the coalition may need to review the policy.

Those who have read my blogs will know I have concentrated on other welfare reform policies and mainly the overall benefit cap, which I correctly say will cost the country / taxpayer / public purse more in monetary terms and will also penalise tenants and social landlords and private landlords more.  Indeed I have consistently been critical of social landlords for their over focus on the bedroom tax which has ignored the much bigger risk to their businesses and their tenants of the overall benefit cap (OBC). Yes the OBC will cost more than the bedroom tax!

The bedroom tax is beginning to unravel and simply because it is being challenged rationally.

Rather than bemoaning the impacts it will have, which are considerable, the focus is moving away from this emotive aspect to challenge based on rationality – the rationality of the law (is it legal and just what is a bedroom) and rationality of the finances – will it cost more and the wider economic impact.  In short away from the spin of government saying it is fair, which is highly superficial and spurious and away from the emotive challenges of social landlords – poor Mrs Jones has invested 25 years of love and money in her ‘home’ and is now being penalised because her children have flown the coop – to a genuine and rational consideration.

That new rational consideration is to be welcomed.

Below I bring together the above rational arguments and develop them and add some more rational challenges which collectively show that the bedroom tax policy is irrational and I would argue needs to be halted before it costs more and causes more damage and cost.

I begin by looking at the DWP guidance to local authorities on the bedroom tax which in itself is bizarre and irrational.

Can you tax something that you cannot define?

No.  Yet the question is much wider and the government are refusing to define what it is they intend to ‘tax’ or charge.  The DWP issued the guidance to local authority Housing Benefit departments in the usual way throough a HB circular and specifically the A4 of 2012.

This says a number of major issues we have to consider:-

At 2. It says ” This instrument introduces size criteria into Housing Benefit for those in the social rented sector (SRS), which is accommodation let by a local authority, registered housing association or other registered provider. The size criteria will be used to decide the extent to which the claimant under-occupies their home so that an appropriate percentage reduction can be made through Housing Benefit.”

So there is no doubt this is the relevant guidance on the bedroom tax / under-occupation charge policy.

It goes on at point 6 to explain the intention: ”  Those found to have more bedrooms than they are entitled to under the size criteria rules (under-occupying), will have a percentage deduction applied to their eligible rent. “

I have highlighted ‘bedrooms‘ above for good reason and to show that this is correctly labelled a bedroom tax.  If a tenant rents a two bed property that has two double bedrooms the tenant rents a 2 bed/4 – two bedrooms and 4 occupants.  Lets say it is a couple with two teenage boys. This family has the intended occupancy of 4 and it not subject to the bedroom tax.  Yet if they rent a 3 bed property with 1 double bedroom and two single bedrooms (a 3 bed /4) then they have the intended maximum occupancy but will be subject to the bedroom tax and lose 14% of their Housing Benefit.

That is irrational.  Note well the 2 bed/4 could have a larger floor space than the 3 bed/4 – in simple language the 2 bed/4 can be a bigger size than the 3 bed/4 yet the smaller 3 bed/4 is the only property to get the bedroom tax cut.

At point 10 in the official guidance it says:

“Those that are considered to be under-occupying their accommodation will see a reduction in their housing benefit calculated by a reduction of:

14% of the total eligible rent for under-occupation by one bedroom; and

25% of the total eligible rent for under-occupation by two bedrooms or more.

Note well that the guidance, the official guidance that HB departments at local authority’s have to follow and especially that the guidance says bedrooms,  It doesn’t say spare room or study or boxroom it says BEDroom.

Yet at point 12 this official guidance says: –

“We will not be defining what we mean by a bedroom in legislation and there is no definition of a minimum bedroom size set out in regulations. It will be up to the landlord to accurately describe the property in line with the actual rent charged.”

This says an awful lot when you read it carefully.

• Firstly, the DWP or government will NOT be defining what a bedroom is.  They could define it if they so wished but they are not doing so.  This is deliberate policy from government.  That brings back my earlier question I posed last week – How can you tax something that you can’t and indeed in this case WON’T define?
• Secondly it says there is no definition of a minimum bedroom size set out in regulations.  That is correct if the government mean Housing Benefit Regulations (HBR) which does not define what is a bedroom in terms of size.  Yet Housing Law does say out what is a minimum bedroom size in HMO regulations and in various other places.  A single bedroom’s minimum size is 70 sq/ft.  70 sq/ft is 10 foot by 7 foot so if the smallest room is 9 foot by 7 foot it is 63 sq/ft and is not a full bedroom – NB – it is accurately 0.9 of a bedroom.  You can call it a boxroom, study, cot-room or anything else you like but you cannot call it a bedroom.
• Thirdly – It will be up to landlords to accurately describe the property.  To describe the property accurately then the property will not be a 3 bed property but a 2.9 bed property and this is very significant.

Re-read the official guidance above which says the bedroom tax will apply if the household under-occupy by ONE BEDROOM.  In this case they would not as they would under-occupy by 0.9 bedrooms which is less than ONE bedroom and the bedroom tax deduction of 14% would and could not be made.

Joe you are being a bloody pedant.  There is no such thing as 0.9 of a bedroom or any fraction of a bedroom!  Not at all and the bedroom tax regulations include the fractional bedroom as part of the policy.  A child 15 or under is entitled to 0.5 of a bedroom says the bedroom tax guidance as point 7 makes clear:

“One bedroom for each of the following:

a couple
a person who is not a child (aged 16 and over)
two children of the same sex
two children who are under 10
any other child, (other than a foster child or child whose main home is elsewhere).
a carer (or group of carers) providing overnight care

As is clear from the above a child under 16 has to share and one bedroom is applicable to “two children of the same sex” which means each child is ‘entitled’ to 0.5 of a bedroom – the fractional bedroom is inherent within these HB regulations.  An 11 year old child needs a single bedroom – a full bedroom is his sibling is female and vice versa.  Yet until the age of 9 they are entitled to 0.5 of a bedroom, that is what the regulatory guidance says.

The same guidance, which HB officers must follow, in determining the bedroom tax MUST involve HB officers taking a view on what constitutes a bedroom.  They cannot make a decision without doing so. Yet the same guidance wont define a bedroom and places this on the landlord to describe accurately.  So if the landlord does describe accurately then the 9 x 7 foot room is 0.9 of a bedroom and not a bedroom.  Further HB cannot dismiss this as not being valid as all landlords are doing is what the guidance says – accurately describing the bedrooms. Moreover, if a landlord does describe the property as 2.9 bedrooms then the HB officer must accept that.  If the HB officer does not accept that they are acting in breach of the guidance.

So, What is a bedroom?

Last week many ‘professional’ discussions developed on LinkedIn and other places and before I put forward this 0.9 of a bedroom argument.  A bedroom is something you can fit a bed into was one such comment; another was if your tenancy agreement says you rent a 3 bed property then it is a 3 bedroom.  Both of these are fundamentally flawed in my view.

Something you can fit a bed into? No.  My first post last week was brought about because Reigate council rightly and successfully prosecuted a landlords for renting out a room that was 4.5 sq/metres – or in imperial 48.5 sq/feet.  A court rules this was not big enough to be counted as a bedroom.  If as I maintain that a single bedroom is 70 sq/ft then 0.5 of a bedroom which the government see as fit to rent to a 15-year-old boy is just 35 sq/ft.  Those points deal with the size issue.

Yet a bedroom is more than a room where you can fit a bed into.  What about wardrobes?  If a bed can fit in but the room is too small for wardobes then where do the wardrobes go?  In a wardrobe room? How about a dressing table or even a dirty laundry bin or anything else we normally or ordinarily associate with being part of a ‘bedroom?’ If a bedroom has its ordinary meaning in law when a challenge to the bedroom tax and minimum bedroom size emerges which it undoubtedly will, then a ‘bedroom’ must in terms of size include enough space for a wardrobe.

Further, as I have said is a deliberately emotive point, if an asylum seeker, no let’s make that the worst kind of asylum seeker, the chancer who is really just an economic migrant has to have 70 square feet as the minimum bedroom size then why should a strapping 15-year-old British child have a law or regulation which entitles hom to just half of this?

The tenancy issue.  Only a court can rule on what a tenancy says it is.  A tenancy agreement can title itself a “Bare License” which is the lowest form of security of tenure yet a court could rule it is a secure tenancy which is the highest level of security of tenure.  Absurdly a tenancy agreement could say the moon is made out of cream cheese.  More practically many tenancy agreements have in the past held restrictions in their wordings such as No Pets etc.  Yet the courts have found these to be errant in law and/or breach the unfair terms of a contract which is what a tenancy agreement is – a mere contract that is capable of being examined and changed by a court of law.  Just because a tenancy agreement says it is 3 bedrooms doesn’t mean that the property contains 3 bedrooms.  It could be just 2.9 bedrooms!

What is to stop a social landlord re-classifying a 3 bed as a 2.9 bed?

Absolutely nothing as far as I can see.  The above looks at the HB guidance on definition and I have said why the official guidance holds nothing to prevent this.

In discussion elsewhere some have said for a social landlord to reduce classification of the number of bedrooms would put them in breach of covenants they have signed and agreed to – or simply it would place social landlords in a difficult and legally exposed position if they did reduce the number of bedrooms.  Yet that view assumes a reduction from a 3 bed to a 2 bed or a 4 bed to a 3 bed – a whole integer and not a fractional basis.

If a social landlord did re-classify a 3 bed as a 2.9 bed property are they in breach of any such covenant?  Highly unlikely.  Would investors still see this as a 3 bed to all intents and purposes? Yes?  Would the investors see this as a smart move and actually increase confidence in lending? Yes.

To explain.  I have highlighted the word ‘smart’ and for very good reason.  Lord Freud back in 2012 when this official guidance was released said he expected social landlords to act ‘smartly.‘

“Lord Freud is adamant that the government will not define what a bedroom is for the purposes of the policy. ‘It is up to landlords to determine that and they are perfectly capable of doing that,’ he says, speaking slowly and deliberately. This has led to concerns that landlords could reclassify large numbers of properties to allow tenants to avoid the tax – a move which will reduce rental income. Some fear this could breach existing lending agreements and lead to legal challenges from tenants over what constitutes a bedroom.

Lord Freud says: ‘My own expectation is there will be a bit of it [reclassification] but it won’t be a widespread, wholesale move because it has income impacts.’

On the point about legal challenges, Lord Freud, pauses, choosing his words carefully. ‘I’m clearly not expecting that outcome and I’m expecting landlords to act appropriately and smartly,’ he says.”

If all social landlords followed this guidance where the smallest room was less than 70 square feet and so many of them are by ACCURATELY reclassifying them as 2.9 (or 2.88 or 2.97 or whatever) then they are acting very smartly indeed.  Their tenants would NOT be subject to the bedroom tax and they would not be at risk of tenant arrears building up.  Their tenants would also see that social landlords are NOT being complicit in the bedroom tax regulations and the regulations state it is what the landlord confirms the property to be.  Investors in social landlords would admire this smartness that even Lord Freud foresaw.  And just as Lord Freud said appropriately and smartly then the 2.9 bedroom definition is also appropriate as it is accurate and follows the guidance on the bedroom tax his department gave to all local authorities.

Re-classifying 3 beds, assuming it is accurate, at 2.9 bedrooms or anything up to 2.99 bedrooms (69.99 square feet) is a very smart and I would argue practical way forward for social landlords.

The DWP says 83% of all properties subject to the bedroom tax under-occupy by just 1 bedroom and that includes a lot of 3 bed / 4 properties in which tenants do not under-occupy yet are still subject to the pernicious bedroom tax.

In summary by social landlords adhering to the guidance – and they need to consider it and give due regard to it just as LAs do – re-classify 3 bed properties as 2.9 bed properties then this is a legitimate way around the bedroom tax that will see social landlord and social tenant benefit – It is smart and its accurate and its appropriate.  Even in legal terms if this means tenants agreeing a deed of variation to the tenancy which reduces the property from a 3 bed to a 2.9 bed then this is a 5 minute job that will be agreeable to all.

Even if you think this is not ‘appropriate’ then what the above discussion does is highlight the irrationality of the bedroom tax policy.  How ill-thought through it is, how it clearly has not been considered, how the impact assessments it has had are frankly not worth the paper they are printed on and how this pernicious policy is doomed to fail.

The bedroom tax is patently unjust and I keep coming back to the simple questions – How can you tax something you wont define?  A no taxation without justification rallying call.  How can HB officers make a decision if they have no guidance on what is a bedroom?  What, if anything can a HB officer do if a landlord says the property is 2.9 bedrooms?  As far as I can see nothing.  If they do then are they acting in an ultra vires capacity?  What are HB officers to do if the landlord says it is a 3 bed but the tenant says it is a 2.9 bed property?  Another set of questions emerge; yet the tenant shouldnt need to have to argue that as the landlord should accurately confirm it is 2.9 bedrooms.  If the landlord doesn’t say it 2.9 bedrooms then has the tenant got a legal case against the landlord, which the tenant will undoubtedly hold as complicit in the bedroom tax? The legal opinion I have is that they would.

Tenants taking legal action against landlords is an interesting issue.  Hold on Joe legal aid wont cover that so it wont happen?  Yes there appears some truth in that but the bedroom tax affects at least one in three applicable social tenant households and so there is a huge public interest here which I can foresee a public interest case being made.

HB is claimed by 3.39m social tenants and the bedroom tax affects 660 – 670,000 households so that would be 1 in 5 ordinarily.  Yet the bedroom tax doesn’t apply to pensioners or those of pensionable age of which the HB figures say 1.29m claimants are 65 or over and a further 1.04m claim Pension Credit meaning that the bedroom tax applies to much less than 3.39m.  A good estimate is 3.39m less a % of the 2.33m that live in social housing which at about 70% is about 1.6m at a conservative estimate.  So we arrive at about 1.7m or so applicable HB claimants in social housing that could be affected and so the 660 – 670,000 who are becomes about 33-40% of all applicable social housing households on HB are affected.

Would it be smart do you think for every social landlord to donate £5 for each social household affected for a class action legal case on what is a bedroom?  I think £3.3m would be a cheap cost for social landlords to pay to have the matter of what is a bedroom challenged in court! I think it would be very smart don’t you Lord Freud?

Bedroom Tax part 5 – why social landlords need a rocket up their a**es!

Inside Housing (Thursday) ran an article on a National Housing Federation (NHF) report which says that rent arrears will increase by 51% and extrapolated in money terms about £250m per year.

A single sentence struck me in the article: –

“The survey also found 57 per cent of housing associations are concerned their tenants know little about the upcoming changes, despite efforts by landlords to prepare them for the reforms.”

What that means and fundamentally contradicts itself is that HAs have not been doing enough to educate their tenants.  Why do 3 in 5 tenants NOT know becomes the obvious question, and the one it appears HAs and all other social landlords are seeking to sidestep judging by the comments below the article all from housing professionals.

In short social landlords efforts have not been enough and a 43% pass rate is what those efforts have achieved and so that effort has been woeful and ineffective despite the money which is ABOUT to be thrown at it (note that well) as in future tense and not in past tense.

232 HAs each spending £50k is a sum of £11.6m that I remind you is ABOUT to be spent on solving a £245m problem. That’s a spend of 4.73% of the anticipated problem.

What the hell have social landlords been doing for the past 2 years?  They will say they have been putting more money in an attempt to educate and prepare tenants, which they have and I’m not denying, but with a 43% success rate those attempts have been woeful and money badly spent.

A (comment 1) talks of controlling the impacts and not challenging.  Yet HAs have clearly failed in this so far. D (comment 2) raises some very pertinent points though I argue the alarm is in the past failed efforts more than investor confidence, which ironically adds to lack of investor confidence! S (comment 3) at least still sees a challenge to the bedroom tax, direct payments and other reforms yet social landlords have proved to be pretty inept at this too and DESPITE the many logical and good services put in place she describes there is still tenant ignorance of the bedroom tax et al even in Shepherds Bush.

I’m not having a go at individual social landlords here, some have done very well and had some very well thought through campaigns but a collective one and the evidence of the NHF report proves that with 57% still thought to be unaware of the real issues to come.  Landlords need to look again and ask why this situation has come to pass rather than simply bemoan the situation which is what they have done.

Last Sunday I posted a short and what i thought was a throwaway blog which asked (a) what is a bedroom – not the first time this has been asked so nothing new in that – and (b) is the bedroom tax lawful?

This second point captures what I mean.  Social landlords and social tenants have been complaining about the impacts of the bedroom tax (and rightly so) but that is all they have done.  They don’t appear to have asked the is the bedroom tax lawful question which if it is or maybe would take away all those impacts.  That blog has gone ballistic in terms of being very widely read and so much more read than others and I have issued 3 more since all of which have added to the simple two questions of what is a bedroom and is the bedroom tax lawful.

• The 2nd added some further points on its legality and prompted many comments from housing lawyers which tended to agree that tenants wouldn’t have a likely succesful claim ahead of the bedroom tax but they expect huge numbers of claims after it is implemented.  Social landlords do however have potentially legal challenges to the bedroom tax ahead of implementation and post implementation.
• The 3rd blog questioned whether the projected £480m per year savings the government expected were reasonable as they too havent been challenged just accepted.  It also discussed how the bedroom tax has a significant private sector dimension due to the coalitions failure to define a minimum bedroom size and that the HB cost will rise because of that.
• The 4th blog today argues the bedroom tax, upon which social landlords have focused to the neglect of other reforms such as direct payments and especially the overall benefit cap, both of which present much higher risk to arrears, could cost the public purse and INCREASE the overall benefit bill by more than £1bn per year.

In short, social landlords by tending to look mostly or even only their own bottom lines (the bricks and mortar view) and not how tenants will react (the people view) and by accepting as fact that it doesn’t affect the PRS tenant which is does and by accepting the claimed £480m pa savings which will end up costing more – have failed to consider the bedroom tax correctly and those together I would argue is why just 43% of tenants are aware of welfare reforms such as the bedroom tax.

Further the many Facebook and other groups some of whom have 5 figure followers (10,000+) and many other lobby groups have been raising awareness of the bedroom tax et al and so the 43% awareness rate has not all come from social landlords efforts, only a part of that has.

Social landlords need to relook at the welfare reforms again and reconsider what they will mean and all of them not just the bedroom tax and do so much more about the direct payment and OBC issues and ask themselves how can they do more and how can they deliver much much greater awareness of the impacts AND how they can challenge these unworkable and frankly offensive welfare reforms which will end up costing the public purse more in benefit cost.

So instead of resigning themselves to saying the level of awareness is low DESPITE their wonderful efforts (and some HAs have made wonderful and successful efforts) the sector should genuinely look again and throwaway the assumptions and ‘givens’ they have about the welfare reforms and go back and do it properly and in a more considered way.  If they don’t then they will pay the consequences of that and in many respects rightly.

I use the bedroom tax as one example of the raft of welfare reforms and I use it because it is all that social landlords have focused upon, at least until recently and we now see social landlords accepting that direct payments and especially the overall benefit cap present much higher risks to arrears – the typical social landlord bricks and mortar / bottom line view than the bedroom tax.

From working in housing for 20 years one thing typically characterises social housing responses to change and social housing constantly is affected by change.  It is the “When does this come in? April. Ok we will look at it properly in January” approach.  This hasn’t happened with the bedroom tax as work has been done and landlords have looked at it, yet given 57% of tenants don’t know then landlords have not looked at this properly

The welfare reforms, that entire raft of changes fundamentally affects the social housing model of operation and doesn’t just tinker around the edges like most change does.  These are very different changes that present different challenges. They all affect HB which is the principal funding stream of the social housing model.  The overall benefit cap (OBC) of £500pw doesnt cut welfare benefits like dole (JSA/IS) etc it ONLY cuts Housing Benefit; Universal Credit (UC) does the same.  These are not welfare benefit cuts they are housing benefit cuts – a bloody obvious and simple point I made as long back as 2011 yet the low awareness level of social housing tenants today strongly suggests that social landlords didn’t take on board that simple but obvious fact. These are not just the usual changes social landlords have to deal with these are radically different.

Social landlords havent taken these radical changes on board as social landlord’s customers are 95%+ the general needs tenant – mainstream housing and the ‘bricks and mortar’ approach has always been used there.  We’ve adopted this strategy in the past and its worked then so why won’t it work now appears to be the social landlords (errant) position.

I inhabit and love the real part of housing that deals with and needs the ‘people’ approach – namely supported housing, that tiny part that has to view the impact of changes on people and understands how people especially vulnerable people react to such change: the type of approach that mainstream general needs housing hitherto doesnt and hasn’t typically used or had to use.  Yet this in many ways is the KEY change in the welfare reforms – that social landlords have to adopt the people approach and bin the ‘bricks and mortar’ one that sees tenants not as customers but as units or occupants or a figure on a spreadsheet.  Tenants are real people.  Yet in true social landlord mainstream housing whether they are called a tenant or a customer takes pride of place!  Yes the semantic and theoretical arguments have priority in the Ivory Towers of social landlords rather than what a tenant needs or how they will react to change.

Similarly, the past 18 months has seen social landlords concentrate on the medium and not the message.  How many articles on how wonderful social media is and how social landlords can use this in ‘communicating’ with tenants have been published and read.  Let’s all get (over?) excited about the medium and forget the message has been the result as while often interesting and thought-provoking ways to work with tenants have been the focus, the medium, the message simply hasn’t been delivered as the NHF survey shows with 3 in 5 tenants thought not to be aware of the welfare reforms and their impacts.

So we can add technocrats (a nice word for geeks) who are blinded by science and the medium to the abstract theorists (tactful term for those with heads in clouds often revered as ‘blue sky’ thinkers!) a reasons why two in three tenants don’t know what the hell is going to happen…..despite the best efforts (sic) of social landlords!

In summary social landlords need a rocket up their backsides for their woeful attempts so far and they need to consider very carefully what the welfare reforms actually mean to all aspects of their business and especially to tenants.

One final point to social landlords.  Please take your head out of you a**e first before (a) you place the rocket there if you have the sense and balls to admit and accept you have severely buggered up this so far; or (b) before your tenants stick the rocket there and light the touch-paper because they blame you for being complicit in the likes of the bedroom tax.  Yes I know you are being wrongly blamed for the bedroom tax when it is a dog’s breakfast imposed on you by the dogma ridden coalition. Yet your inept response to it has made you appear complicit in tenants eye so whose fault is that!

PS – I suspect some social landlords will still get highly scorched elbows

PPS – Hey mainstream social landlord, you know all those wonderful hardworking charities that you have as managing agents…you know the ones you talk at once every year or so…yes them that the Housing Corporation said 20 years ago need shorter repair response times because their tenants (often licensees) are more vulnerable than the mainstream general needs tenants…yes the ones that you have no idea what the hell it is they do……….Well they deal with ‘people’ and have the answers for you on how to raise awareness of welfare changes, after all they have done it for years and know how to speak with (not at) people too.

They’re the ones I mean when I say supported housing.  Just thought I’d mention that in case you thought I was talking about sheltered housing…you know the one housing area you pump in oodles of time and money.  That’s not supported housing it’s sheltered and anyway 90%+ of those there are immune to the welfare reforms.  Be careful elbow scorch marks can be quite nasty!

PPPS – All of the issues around the bedroom tax, the 3 bed / 4, the half of a person, the minimum bedroom size issue, the fact that asylum seekers are more favourably treated in terms of bedroom size as are others in HMOs than in mainstream housing, the lack of exemptions, the 13-week rule and how soldiers families will be penalised, etc, etc, etc, – are nothing new and nothing I have suddenly come up with.  These issues have been well-known in housing for years so why don’t tenants know this?  These issues, pertinent ones for bedroom tax have not been communicated by the ‘sector’ to the tenant.  Because they haven’t social landlords have placed themselves in a position which appears they are complicit.  And that will get worse too.

Yesterday one council put up its rents by 5.1%.  From the figures supplied this appears to be the usual formula of (RPI+0.5% and then plus £2) and as i have always argued social landlords given the risk to arrears from the raft of welfare reforms were always likely to issue the maximum permitted increases.  Yet the focus will be on 5.1% while benefits rise by 1% and while CPI is 2.2% and tenants will see the rise in this context as so much more than the usual rent increase and will blame the landlord.  it’s a bloody obvious point that like any business with a much higher threat of non-payment and arrears that the welfare reforms present that rent levels will increase to mitigate this.  Any business would do this and has to do this, and in that regard the welfare reforms have always presented landlords with a massive reputational risk.  So why don’t tenants know this?  They should and its extremely damaging to social landlords that they havent been open with tenants over this issue.

Social landlords run a further risk of being perceived as secretive and just money-grabbers to add to the complicity risk.  That rocket up your backsides is well deserved and very much needed.  If that enables you to take a step back and think (should that be THINK!) then it will do a lot of good and makes good business sense.  Get off the fence and get behind your tenants instead of appearing to be making that fence higher and higher with you on one side and the tenant on the other! Perhaps then tenants will correctly realise that you are being shafted by the welfare reforms too!

When the real proverbial hits the fan with the overall benefit cap and Universal Credit which we know are car crashes waiting to happen tenant and social landlords will need to to be singing from that same hymn sheet. Yet the way social landlords have gone so far, they will be your fault too!

Bedroom Tax – part 4 – more perversity and why it will ADD BILLIONS to the welfare bill

I went back and re-read the coalition impact assessment on the bedroom tax yesterday.

The first thing to note is that the DWP refer to it as an under-occupation issue and the overview below is taken directly from the DWP website here:

“The Welfare  Reform Act 2012 announced that the current rules for the size of  accommodation that Housing Benefit will cover in the private rented sector will  be applied to working age tenants renting in the social sector.

From April 2013 all current  and future working age tenants renting from a local authority, housing  association or other registered social landlord will receive Housing Benefit  based on the need of their household.

The size criteria allows one bedroom for each  person or couple living as part of the household with the following exceptions:

• 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 will be allowed an  extra room.

This  means those tenants whose accommodation is larger than they need may lose part  of their Housing Benefit. Those with one extra bedroom will have a 14 per cent  reduction applied to their eligible rent and those with two or more extra  bedrooms will have a 25 per cent reduction applied.

Further Information can be found in the impact  assessment:

• Under-occupation  of social housing – impact assessment“

So while we all know it as the ‘bedroom tax’ it is officially called under-occupation yet this is a nonsense as the following simple example explains.

The Smiths are a couple with two sons aged 13 and 15.

A) The Smiths rent a property with 1 double ‘bedroom’ and 2 x single ‘bedrooms’ – This is known as a 3 bed / 4 in housing jargon – a 3 bed property that is meant to be occupied by 4 persons. Which it is.

Yet they have 3 bedrooms and so are penalised with a 14% reduction in HB

B) The same household composition could rent a property with 2 double sized bedrooms – a 2 bed / 4 to accommodate their family and would not be penalised under the bedroom tax.

They rent just two ‘bedrooms’ so are not penalised by the bedroom tax.

You can make the argument that in example A) the 3 bed/4 the two boys have a room of their own when they could share and so the bedroom tax has some sense of ‘fairness.’  Yet it also means having a room each could cost about £22 per week in London – a tax of £22 per week or £1,144 per year.

The size criteria is on the number of bedrooms and not the occupancy or household composition and so it is incorrect to label this as an occupancy charge; rather it is called quite correctly a bedroom tax.  It could be the case that the 2 double sized ‘bedrooms’ in the 2 bed / 4 could we larger in area than the 3 bed / 4 and the rents could well be the same level too.

And as I have argued before if the 2 single ‘bedrooms’ or just one of them is less than 70 sq/ft then they are not a bedroom as they are under the minimum bedroom size or MBS as so many of the smaller ‘bedrooms’ rented in social housing are 9 x 7 and thus below 70 sq/ft.

The issue is of classification and how the landlord defines a ‘bedroom’ and is not a size criteria on under-occupation but a size definition of what is a bedroom according to the landlords subjectivity. Just because a landlord gives the Smiths a tenancy agreement that says it is a 3 bed / 4 doesn’t mean that it is and housing benefit departments at local authorities cannot simply rely on the landlords subjective view of what the property comprises and is defined.  A tenancy agreement can state the moon is made out of cream cheese …until a court decides otherwise; just as it can say the tenure is a bare licence when in fact a court can rule it to be a secure tenancy.

Here is where I have a huge issue with the bedroom tax in operation.  When it comes in the Smiths dispute that the bedroom tax applies in the 3 bed / 4 they rent as (a) the 3rd ‘bedroom’ is only 9 x 7 and so is not a bedroom; and/or (b) the Smith household is 4 persons and how can they be under-occupying a property meant for 4 persons?  I foresee every such example of this being challenged and rightly so and on both simple arguments that the MBS means one or more of the ‘bedrooms’ is not a bedroom AND they are not under-occupying.

The bizarre and highly irrational aspect – and I mean irrational in a legal sense too – of the bedroom tax is that is says under 16s should share a ‘bedroom’ and that each under 16 is counted as half a person meaning that a 2 bed / 3 is suitable and the correct ‘need’ – a double for the parents and a single for the two boys.  Yet what is that ‘single bedroom’ is 9 x 7 or any size below 70sq/ft?  The Smiths still have a legal challenge on the definition of a bedroom.

Add to this that the HB dept of the LA must investigate any disputed decision and then ask the landlord to confirm what they classify the property is and in writing. This means that the social landlord is being asked if it believes a 9 x 7 room is suitable for two teenagers to share in simple terms – a subjective judgement.  The social landlord will also know that such a size of room breaches many housing regulations and guidance and so is being asked to confirm in writing, as part of a formal dispute that could end up in the Upper Tribunal (High Court), that this is acceptable.  The social landlord – directly through the bedroom tax policy – is exposing itself to legal actions and legal costs.

Additionally the social landlord is incurring the wrath of its customer, the tenant, by appearing complicit in what is rightfully called a bedroom TAX.  Further the social landlord with its financial head on knows that any bedroom tax deduction gives an increased risk of arrears and added cost to the business.  This ultimately leads to eviction and higher cost to the same local authority in terms of temporary accommodation for the now homeless Smiths.

What the bedroom tax does is transfer risk and cost to tenant, landlord and local authority…and in the above example created by a misnamed under-occupation policy where the family is not under-occupying!!

Reader, are you still following this bemusing and surreal situation.  Dont worry there’s much more to come and as I began this by saying I reconsidered the bedroom tax (sorry under-occupation that isn’t under-occupation) impact assessment I return to that.

Above I describe the huge additional admin burden to each local authority HB department with the huge likely number of disputes which will cost each LA far more.  Yet what does the impact assessment say about this?

Page 17 of the impact assessment discusses (the DWPs view of) those who will appeal and those who will seek a discretionary housing payment of the 660,000 the DWP say will be affected.

• 53. As an illustration, it is estimated that if 40,000 of the householders that experienced a reduction at the point of transition were to make an application for a Discretionary Housing Payment, the total cost across all Local Authorities of administering these additional applications would be approximately £1m. This is the estimated cost of administration, regardless of whether the outcome of the application for a Discretionary Housing Payment is successful or not.
• 54. Similarly, as an illustration, if 20,000 claimants chose to appeal the decision made on their Housing Benefit entitlement, DWP estimates the additional administration cost associated with these appeals would be approximately £4m.

Note before I discuss the above irrational nonsense that DWP state of the 660,000 households the bedroom tax will affect in the first year that 83% of these or 548,000 will be said to under-occupy by one ‘bedroom’ – lets call these the likely disputed cases which is what they are.

On Discretionary Housing Payment (DHP) Requests

• So only 40,000 out of all 660,000 will seek to claim a DHP according to the DWP – a mere 6.06% and 93.94% wont seek to claim a discretionary housing payment!
• If the mere 6% do claim a DHP then the cost to LAs will be £1m.  Hang on that’s a whopping £25 cost per case (£1m divided by 40,000).  Note here reader that the only cost factor I can think of is that LAs are guided to charge £27 per hour for admin when dealing with a freedom of information request and those figures are a few years old.  So each DHP application from sending out, reading, consideration, coming to a decision and then informing the applicant is about 45 minutes in total! My apologies I failed to include postage and other stationery costs and reconsidering and re-assessing each awarded DHP!!

On additional disputes to bedroom tax decisions

• The DWP maintains just 20,000 of the 548,000 affected by one ‘bedroom’ will challenge!  That’s a whopping 3.65% challenging and a resigned 96.35% of social tenants who wont challenge then!  (The majority will be on welfare benefits too yet DWP maintain just 3.65% will challenge the bedroom tax decisions!!!!!)
• If this miserly and irrational low percentage do challenge then this 20,000 will create a £4m added cost to LAs in the DWPs view.  That’s £200 per dispute of about 7 hours work for one person at each LA.  7 hours to acknowledge a dispute, record that dispute, consider it (including asking the social landlord to confirm the property size in writing!) and come to a decision (which may well including taking internal legal advice on the 3 bed /4 issue above) and inform the claimant….in 7 hours!!

The two areas above the DWP maintain will combined cost £5m more to local councils in a year.  One legal case on each issue will cost the poor local authority who is taken to the High Court and beyond will alone cost how much?

What about the many Facebook groups that have already got 10,000 or more members and the DWP thinks just 20,000 will appeal!

What about the many concerned professionals with a knowledge of appealing and disputing HB decisions who will gladly in the spirit of the Big Society donate some days of their time in training those volunteers (the real Big Society eh Dave!) who are aiding those affected by this pernicious policy on how to challenge and what form such challenges take.

I wonder if such huge numbers of disputes and public awareness of them will see some of the £6.7bn per year that the DWP admits knowing is claimable but not claimed by tenants in HB will be claimed. Perhaps the same raising of awareness and the many online benefit calculators will also see some of the £8.4bn per year known to be due but also unclaimed in Working Tax Credit / Child Credit to be paid out by the coalition.  That’s £15bn per year unclaimed but known to be due and just needs the prompt of national ire that the bedroom tax creates to see that happen.

Hang on if just a miserly 3.65% (the same irrational percentage the DWP maintain will challenge) of the HB and WTC unclaimed but due is claimed and paid then that means the coalition will be paying out £551m more per annum in benefit against a £480m per year expected bedroom tax saving.

What about all the CABx and other welfare rights groups who will be inundated with appeals from tenants or the local authorities and other social landlords who have freely accessible online benefit calculators so individual tenants can see in 5 minutes what they are entitled to and should be receiving in welfare benefits.

If 10% of that unclaimed but due HB and WTC is realised then the bedroom tax will cost the coalition and the public purse £1bn per year more than it saves! And that is just two benefits of many!

Yes the bedroom tax will cost the public purse billions in added benefits and after all how can the coalition argue that this is unfair that claimants are simply claiming what the government knowingly withholds and they are due.  Oh I see that’s why the coalition is shying away from the shirkers and strivers issue as it knows and admits £8.4bn per year is due to all ‘strivers’ (those in work are the only ones eligible to claim WTC) yet the coalition knowingly and immorally and distinctly unfairly keeps money from these strivers and even breaches its own pithy spin strategy of saying we will always make work pay more!

Who would have thought the bedroom tax, the most despised tax since the poll tax, would end up costing so many billions more? Who would have thought that the coalition and IDS in particular couldn’t foresee this…er…on second thoughts…..!

The bedroom tax IS the straw that broke the camels back as it has spawned benefit calculators that are accurate and do finally work (the early ones ignored the overall benefit cap see here) and rather than attack and blame social housing tenants the bedroom tax has mobilised social tenants to say enough is enough.

Is the bedroom tax lawful part 3 – a financial imperative for the coalition emerges!

The simple question ‘what is a bedroom’ has caused a bit of a kerfuffle and especially because of the basic issue of how can you tax something you can’t and indeed won’t define which is at the heart of the bedroom tax and is the coalitions stated position.

Yet the answer is nobody can say what a bedroom is – and yes that seems weird just typing those words as I know what I mean by a bedroom as does everyone in lay terms. But in legal and regulatory terms such as Housing Benefit which also means welfare benefit and welfare spending terms which also means public purse and taxpayer terms we can’t define it.

I could elaborate on that surreal path as that is what taxing something you can’t define is – totally surreal – yet ‘what is a bedroom’ has huge impacts in housing and welfare and legal terms as well as in landlord and tenant terms…and house buying terms too and in attempting to answer it we could uncover a much bigger mis-selling scandal than the banks PPI insurance and pensions charades. (If you have rent or have bought and pay for a purported 3 bed property which in fact is only a 2 bed….)

A ‘bedroom’ is defined by its size under existing regulation for Houses in Multiple Occupation (HMO) so that a single bedroom has to be a minimum size of 70 square feet and a double bedroom to be a minimum 110 square feet.  So 70 /110 square feet become the minimum bedroom size or MBS.  These MBS apply to asylum seekers and contracted that way between central government and local government under the asylum seeker dispersal programme which saw all areas of the country share the burden of costs that London and Dover were incurring.  The same HMO regulations apply to DV refuges, homeless hostels for single persons and families and other multiple occupancy properties and so they are currently used for HB purposes and the MBS of 70/110 square feet do define what a bedroom is and do so by a minimum size.

So we have a legal definition and an operational one that links the payment of Housing Benefit to bedroom size.  These examples also mean the decision rests with local councils and their HB departments and that local councils have existing powers to link the payment of Housing Benefit to MBS.

On an operational level and within housing 3 bed properties that have two double rooms and a single for example are known as 3 bed/5 properties.  The 3 beds accommodate 5 persons just as a 3 bed/6 can accommodate two persons per room or 6 in total.  So we see rented housing determines occupancy – which is at the heart of the bedroom tax – and allocation policies based on (perceived) bedroom size by the landlord.

Yet all we have in single household properties (that is not HMOs) is a landlord’s word and subjective opinion for the bedroom size being adequate and conforming to their definition of what is a bedroom.  That can’t hold as any landlord could claim to be renting a 5 bed property which is only a 3

The private landlord in the Reigate case who rented a room of just 55 square feet and was rightfully and successfully prosecuted for renting a room that doesn’t conform to the HMO definition of a bedroom as it is too small can’t be the exception and not the rule for ALL rented properties.  That can’t be right can it? How can we have ‘laws’ to protect individuals in a multiple household occupation setting that don’t apply to the vast majority of rented properties.  Put another way what is to stop a social landlord from sub-dividing two large double bedrooms into two smaller ones and claiming the property is no longer a 3 bed/5 but is a 5 bed/9 and charging a much higher rent? If you don’t define a bedroom then that is possible.  The public purse and taxpayer could be paying much more (and below shows this to be 75% more!!) for the same property than they are now!

Do we really want a housing policy which crams in as many people as possible into a house?  Of course not in moral terms or in economic ones as that creates added costs and reduces educational attainment and extra costs to the public purse. Yet unless we define what is a bedroom in terms of size that can happen.

Without making any moral or political presumptions here a 3 bed property could be converted into a 4 bed property and a higher rent charged without much cost to the landlord.  Given the official VOA figures show the average 3 bed private rental in England is £765pcm yet the average 4 bed rental is £1,337 pcm there is a huge difference of £6,864 per year in rental income.  So even if it cost the landlord £10k to covert a 3 bed /5 into a 4 bed/5 then the payback time is less than 18 months!

If you were a private landlord reader and your properties are your business of course this is what you would do.  Even the (full or part) benefit tenant in London would see their maximum LHA go from £340pw to £400pw – an increase of £3120 per year that the state and taxpayer would pay.

Again without defining what is a bedroom in single occupancy properties and having MBS this is possible, and even probable.

If you think that is improbable look again at a comment I received on the original post.  It said “My “second bedroom” is 8 feet by 10 foot” and that is classed as a double room.  If the largest bedroom is 16 feet by 10 feet and in many older properties this is not unusual, then partition it to make two 10 by 8 ‘double bedrooms’ and reap the higher rent! What I am saying here is that the bedroom tax policy without a MBS and without that being tied to the payment of housing benefit is economically irrational for the coalition. Whether that makes the bedroom tax legally irrational is not for me to say however it could easily end up costing the government (and the public purse taxpayer) so much more and not save a penny.

So we see the bedroom tax is perverse for government without a minimum bedroom size definition.

The bedroom tax is a claimed way for the coalition to save money yet the minute I post this, private landlords could and will be giving my example above strong consideration as the finances stack up.  There is nothing to stop social landlords doing the same I must add.

The bedroom tax by looking at the MBS issue in single occupancy properties creates an economic imperative for the government to adopt a MBS.

If this is not looked at then the coalition could be spending 75% more in housing benefit!

Now where have we read this before?  Yes the overall benefit cap (OBC) which limits total benefits paid to £500pw or £350pw for a single household.  This was due to roll out nationally in April 2013 but is now just being rolled out in 4 pilot areas of the capital in April with a view to a national roll out sometime ‘in the summer’ – and yes official policy is as vague as that.

Why is the OBC being delayed? 

The only absolute is that any delay in the OBC, which the coalition claim will save money, is that any savings are delayed.

Yet given the coalition have (a) a strong welfare benefit saving rationale and (b) that ‘direct payment’ to tenants has a pilot but is not being delayed in its roll out, then the only logical answer is that the coalition must have some doubts that the OBC will actually save money.  And this is where the leaked ‘Pickles Letter’ becomes important.

The ‘Pickles Letter’ was a letter leaked in full in July 2011 from Eric Pickles PPS to David Cameron’s PPS which said that the OBC would cost more than it saved and part of my basis that the OBC will cost far more than it could ever save and create additional tens if not hundreds of thousands of families in the first year to become homeless too.  Add to that the systemic flaw theory I developed which shows that this situation will get worse each year as rents rise faster than the cap and there is simply no chance the OBC will save public monies at all.

This is why looking at the irrationality of the Bedroom Tax and casting doubt on its claimed savings is an important route of challenge.  Simply, if the OBC can be delayed and claimed savings foregone by this coalition because the OBC doesn’t stack up financially, then if the Bedroom Tax is shown not to stack up a similar delay will ensue and thus buy time to look at the legal ‘definition’ of a bedroom and the legality of a tax on something that is undefined.

For the avoidance of any doubt I am not suggesting that my large number of posts on the OBC and why it will cost more has caused this delay and change by the coalition.  Or my many posts on why the banning of HB to the under 25s was never going to happen seen that issue die a slow death.  And while it’s true to say that social landlords did overly focus on the bedroom tax and play down the OBC risk to them until recently, the central issue to all of these delays and abandonments is a common one – the bottom line. When challenges be they legal or lobbying are taken which question the bottom line or claimed economic rationale they have a better chance of succeeding.

Just as I said the bedroom tax should not be viewed on emotive grounds and instead looked at on legal grounds, ie is it lawful? Then it also needs to be challenged on its economic basis, i.e. will it save money?  The ‘bottom line’ arguments are vital in any challenge to any authority local or central with a controversial decision.  Yet the claimed financial savings of the bedroom tax have never been challenged as I have simply done so above.

Perhaps that’s because the targets of the bedroom tax are social tenants yet the ones who could and will take advantage of the lack of a MBS are private landlords.

I will be generous to the coalition and say that the partitioning of rooms scenario I outline above to generate additional benefit income is an unforeseen consequence of the bedroom tax.  If as I argued yesterday the social tenant lobbies have done next to nothing on challenging the legality of the bedroom tax, then the total lack of any private tenant lobbies is very much at play here.  There aren’t any private tenant lobbies to challenge this consequence of the bedroom tax for private tenants, they simply don’t exist!

Yet because the private rented sector (PRS) now accommodates as many tenants if not more than the social rented sector (SRS) this represents a chronic absence of a voice for private tenants.  It also means that 20 years ago when 75 or 80% of tenants were social tenants but now at most 50% are, that tenant voices in the entire rented market have reduced massively.  The average tenant has far less influence and say in simple terms…and how convenient that is for the government!

It is fair to say that traditionally the power lobbies have been social landlords and social tenant lobby groups.  Yet that is clearly diminishing and obvious.  Yet how many social landlords restrict their thinking to social landlord and social tenant issues alone and have failed to adapt this obvious factor?  Oh yes the bedroom tax is all about social tenants and doesn’t have a private tenant dimension – is not a valid assumption at all.

The consideration given to the bedroom tax by social landlords and social tenants has been huge.  Yet clearly it has not been comprehensive and considered all the variables such as the impact on private tenants and the bottom line imperative for the coalition to reconsider.  It is only by looking at the lot of the private tenant and private landlord that this economic challenge to the bedroom tax policy emerges.

So private tenants join social tenants to lobby against the bedroom tax on economic and legal grounds?  Hmmmm! Perhaps I can’t see that happening yet there is no doubt the bedroom tax has a private tenant dimension and one which collectively can lobby much more strongly than social tenants alone.  I wonder if legal views on the irrationality of the absence of a MBS see this aspect?

Is the bedroom tax unlawful – part 2

Having a spare 15 minutes on Sunday morning I drafted and posted a blog asking the question Is the bedroom tax unlawful?  I went on to say in my view it must be unlawful for a number of reasons.

1. Firstly, there is no definition of a bedroom so how can you tax something you can’t define?
2. Secondly, what definition that does exist under housing law says that a room under 70 square feet is not a bedroom.
3. Thirdly, so many third bedrooms in rented and sold properties have the smallest ‘bedroom’ at less than 70 square feet so are landlords and estate agents breaking the law by advertising them as 3 bedroomed properties?

This blog post also highlighted that one Surrey council had successfully prosecuted a landlord for renting out a room smaller than this minimum bedroom size (MBS) recently.  So the legality or lawfulness of what constitutes a bedroom is out there in law and capable of being used to answer the fundamental question I asked, namely What is a bedroom?

The blog has had 20 times the normal views in just one day than I would expect in a week and at the time of writing this still attracting more and more views and my email and other inboxes have had scores of replies.  Because the responses I get tend not to be comments below the blog but emails I now look at and discuss some of the main theme in those responses is ….Why havent social landlords done anything or more about this?

1.  Why havent social landlords done ‘anything’ about it?

The general argument being made is that social landlords are supposed to be on the side of tenants and have charitable aims, so why havent they raised the minimum bedroom size (MBS) issue?

Firstly, it is not true to say social landlords have not doen anything about the bedroom tax and if anything they have lobbied hard on the general issue of the bedroom tax being unfair. Yet that is the problem as social landlords have focused their challenge on the morality or fairness of the issue and not on its legality. Why should a couple in their 50s who have brought up a family in a 3 bed house and now the children have flown the coop be penalised has been their line of argument.  A perfectly good argument I agree but nonetheless an emotive one.  Yet more importantly it hasn’t been a logical one in my view.

When you challenge decisions you don’t get embroiled in the emotive morality of the decision or the merits of it; rather you must firstly ask is this decision lawful.  If it isn’t lawful or you can create enough fuss about the legality of a decision then there is no need to get into the merits or consequences of such decisions – if it is unlawful then such consequences won’t flow.

Secondly, as the people who are to be affected are tenants isn’t the real question why the hell haven’t TPAS or TAROE or other tenant lobby groups not raised the legality of the MBS issue?  This is a far more pertinent question.  My third bullet point above makes social landlords potentially complicit in the current legality of the MBS and especially when the bedroom tax comes in.  If they are renting properties they SAY are 3 bedroomed ones yet the boxroom is less than the MBS then they are the ‘perpetrators’ here of potential unlawfulness by renting a 3 bed when in fact it is a 2 bed and a boxroom. I can’t think off the top of my head where the ‘perpetrators’ ie those that impact the ‘unlawfulness’ lobby against its change; it is usually the ‘victim’ of that, in this case tenants, that challenge the legality of the matter.

So why haven’t tenant groups challenged the Minimum Bedroom Size or MBS issue?

Thirdly, and as I have been arguing for some time, the entire raft of welfare reforms from the coalition of which the bedroom tax is just one have always placed social landlords (rightly or wrongly) in an invidious position AND run a huge reputational risk to social landlords that they and not the coalition would be blamed for them.  I drafted a blog titled are social landlords complicit in the bedroom tax just the other week which covered many such points.

Looking at and positioning social landlords as potentially complicit in the bedroom tax and then in simple terms inferring the view that they haven’t challenged the legality of the MBS in the bedroom tax because it would expose that they have mis-sold (or mis-rented) their properties as 3 beds when in fact they are 2 beds can and easily has led to tenants citing this as a reason for social landlords lack of challenge to the MBS issue.  That is a huge reputational risk social landlords have run and on balance they have severely neglected this reputational risk.  Despite this having been fostered on social landlords by the coalition bedroom tax policy social landlords have totally mishandled and some have not even this reputational risk.

However, on balance, why the hell haven’t tenant groups seen this MBS issue and challenged it?  It is tenants who will be the recipients of this tax and tenants who will suffer financially.  All tenants caught by the bedroom tax will suffer and while that will lead to higher arrears and affect social landlords financially, it will be some but not all affected tenants that go into arrears. I could equally argue that this is why social landlords have not done more to challenge the legality of the MBS, yet without being an apologist for them I think they simply haven’t seen this potential legal route to challenge or question the legality of the bedroom tax.

NOTES

Other response themes I have received look at whether there is a legal link between HB and housing law? If HB departments within councils check to see whether there is a minimum bedroom size (MBR) and evidenced and successfully prosecuted in the Reigate case in a multiple household property then why not in a single household property? If HB is not paid for a HMO room that is below 70 square feet then why should it be paid for a single household property?

Others ask:

Should all landlords have to put room sizes on tenancy agreements?

If they did couldn’t HB depts then check?  Should landlords have to put room sixes on tenancy agreements? If they did what impact would that have on overcrowded / overoccupying issues?

Is it the case that HB pay the same for a 30 square feet room that they do for a 500 square feet room? Yes it is.  So should they?

The above are just a small selection of responses yet all stem from asking the simple question namely, What is a bedroom?  The proverbial can of worms has been opened that affect many areas of housing policy, affects tenants and their children, landlords, government, estate agents and others.  I’m sure there are many other issues to be raised too and I will post a series of blogs on them here.

A request if I may.

I am not a legal expert and so would like and welcome broad comments from those that are on the legalities I have raised around the minimum bedroom size (MBS) issue. Perhaps the law is deficient here? Perhaps HB regulations are deficient? Perhaps there may be huge retrospective consequences of a landlord renting a 3 bed that is really only a 2 bed? Perhaps that also applies to estate agents too?  Does it also apply to RTB sales as well?  All of these could be a mis-selling issue?

I say that because an answer surely must be found to the MBS issue as it affects hundreds of thousands of tenants many of whom are vulnerable.  It affects ALL tenants even those nor in receipt of HB too as ‘self-payers’ have been paying rent on what they are told is a 3 bed house when in fact it could be a 2 bedroom.

THe other reason I seek some legal answers is in terms of challenging this distinctly unfair ‘bedroom’ tax.  It deserves to be challenged and exposes too one key and concurrent theme I have in my blogs – that this coalition especially makes policy out of political dogma yet doesn’t see the consequences through.  That for me is an affront to democracy and bad governing and goes way beyond party politics.  If a government enacts policies and doesn’t know the consequences and impacts that policy will have, then that government should be challenged at every turn for the sake of the country.  This is not an issue of party politics but a national issue that affects all party voters adversely and bizarrely and whether or not they work or are on benefits.

This MBS issue has aroused much awareness of the legality of the bedroom tax policy.  So while I argue above it is for tenants rather than social landlords to challenge, the issue is so big that they should combine and challenge the bedroom tax policy together.  That helps social landlords get over charges of complicity by tenants and they need to do that.  Surely is the much less pressure and lobbying placed on government has delayed the overall benefit cap then the pressure the legality of the bedroom tax would place on government can surely see the bedroom tax delayed as well.

Is the bedroom tax unlawful? Yes it must and has to be!

What is a bedroom?  That’s a simple question surely for which there must be a simple answer?  Well it’s not and with the bedroom tax coming in very shortly then its a question that needs to be answered else …..How can you tax something if you can’t define it?

Yet this is the situation that will arise when the bedroom tax penalises social tenants by reducing or taxing them 14% if they under occupy the property by one bedroom and 25% if they under occupy by two bedrooms. 

By definition you must be able to state what a bedroom is before you can decide if a tenant is under occupying one or not!

Yet there is no definition for bedroom tax purposes which the government is happy to maintain but surely cannot hold and cannot be allowed to remain the case.

I wrote about this last year and I was minded of this bizarre situation again when Reigate & Banstead Borough Council issued a news release this month which has been forwarded to me today and I quote from this below:

On Friday 7 December at Redhill Magistrates Court, Mr Mohammad Sarwar, Redhill, was convicted of breaching an overcrowding notice serviced on him under the Housing Act 2004.

Mr Sarwar is the landlord of 75 Knighton Road, Redhill, which is a house in multiple occupation (HMO) where rooms are individually let with access to a shared kitchen and bathroom. One room in the property, measuring 4.5 metres squared, was deemed too small for letting in 2007. However, on 28 March 2012, Environmental Health Officers found that the room was occupied.

I have emphasised the size above and of course the news release is wrong and must mean 4.5 square metres  which is or could be 7 feet 5 inches by 6 feet 6 inches; whereas 4.5 metres squared is 14’9″ by 14’9″ which by any definition is a bedroom and quite a large one.

7 feet 5 by 6 feet 6 inches is in lay terms a boxroom and not a bedroom and as this news release says is ‘too small’ to be occupied.

Yet how many 3 bed properties being rented by landlords have the third bedroom at such small a size?  The answer is thousands upon thousands and…the tenant who rents this will be penalised and taxed by having their Housing Benefit reduced even though many boxrooms don’t measure up (no pun intended) to being classed as a bedroom.

How can you legally charge a landlord with renting such a boxroom yet penalise a tenant financially with the bedroom tax for renting one!

Yet this is the absurdity the bedroom tax holds.

As I discusses in my first article on bedroom size back in August a ‘bedroom’ is defined for houses in multiple occupation (HMO) as being at least 70 square feet or 6.5 square metres, but lets keep this in imperial measurements – it needs to be 70 square feet or 10 feet by 7 feet or any such combination that is at least 70 sq.ft. such as 9 feet 6 inches by 7 feet 5 inches – and don’t ask me why as I don’t know but so many smaller bedrooms are 9 feet 6 inches in length.

Many years back I headed up the asylum seeker dispersal programme for a Northern council and the properties under this contract had a single bedroom defined as and needing to be at least 70 square feet and a double bedroom as 110 square feet.  So if a room was less than 70 square feet is wasnt a bedroom and could not be used or classified as such.  The Reigate case I reference above seems almost certainly to be the same HMO issue – though note this definition and HMO room size applies to all occupants not just asylum seekers.

In summary if a room is less than 70 square feet then it cannot be deemed a “bedroom” and if it is not a bedroom then how can it have a bedroom TAX? You cant under occupy a bedroom if it is not a bedroom!

The government is leaving this to landlords to define says Lord Freud yet this is a farce and a legal nonsense for me too.  If your landlord says you have 3 bedrooms then that is what will decide the bedroom tax and this is a joke to put it bluntly yet this is the government’s position. Again I covered this in more detail back in my August 2012 post I mention above and I am staggered as to why we have not heard reports of a legal challenge as to what constitutes a bedroom.  Perhaps they will only transpire once a social tenant has the bedroom tax applied?

Yet in looking further into this today after reading the Reigate article above which was a successful legal challenge to the same issue – bedroom size – and resulted in legal sanction I am staggered as to why no challenge has yet been taken as we have seen challenges to other welfare reforms. With that in mind I did a quick check on Rightmove a house selling and rental site that has national coverage and oft-quoted by government ministers.

I found an ex-council house up for sale in Croxteth in Liverpool and in the particulars I noted this:

“Bedroom Three 2.74m x 2.20m (8’12” x 7’3″)”

Aside from the fact that an estate agent doesn’t know that 8 feet 12 inches is in fact 9 feet (!!!!) work out the size.  In metres 2.74m x 2.2m is 6.028 sq/m and less than 6.5 dq/m and so is not a bedroom.  In imperial 9 ft x 7ft 3 inches is 65.35 square feet and again below th 70 square feet needed to be classified as a bedroom!

Is this estate agent breaching the Sale of Goods Act or the Trades Descriptions Act?  I don’t know as I’m not a lawyer but in lay terms it would seem so wouldn’t it?

Similarly if a social landlord rents out such a property and has a tenancy agreement which says it is a 3 bedroom property is the landlord in breach of any similar Acts?

My view is that there must be an arguable legal case here.  It cannot be that if the tenancy agreement says the property is 3 bedrooms then it is 3 bedrooms which appears to be the view of landlords and especially government.  If the tenancy agreement says the moon is made out of cream cheese anyone?

Or this “Bedroom Three” above could be rented or sold as such to me or you but is not big enough to rent to an asylum seeker!!  Yes the Daily Mail would love that and would so embarrass the government wouldn’t it?  Imagine the poor 55-year-old widow who has lived in a 2 bed council house for 30 years and brought up her children there who have now flown the coop.  She has made that property her home, her family home, has invested so much time, money, effort and love into that house …and is now going to see her Housing Benefit reduced by 14%.  In a same sized property that would only be suitable for 1 asylum seeker!!

The ‘bedroom tax’ is a farce and is a legal farce and nonsense.  The asylum seeker would not be penalised and yet if the asylum seeker was granted full refugee status and remained in that property the former asylum seeker would then be hit by the bedroom tax!!!

That is government policy!!!

To save re-reading my August discussion I have reproduced what I said then about the coalition position below which also references the comments of Lord Freud.

“I am staggered that there has been no legal challenge to this to determine for the purposes of HB deductions what is a bedroom?  Back in May in an interview with Lord Freud he was adamant the government were not going to define what a bedroom is.  He said: –

Lord Freud is adamant that the government will not define what a bedroom is for the purposes of the policy. ‘It is up to landlords to determine that and they are perfectly capable of doing that,’ he says, speaking slowly and deliberately. This has led to concerns that landlords could reclassify large numbers of properties to allow tenants to avoid the tax – a move which will reduce rental income. Some fear this could breach existing lending agreements and lead to legal challenges from tenants over what constitutes a bedroom.

Lord Freud says: ‘My own expectation is there will be a bit of it [reclassification] but it won’t be a widespread, wholesale move because it has income impacts.’

On the point about legal challenges, Lord Freud, pauses, choosing his words carefully. ‘I’m clearly not expecting that outcome and I’m expecting landlords to act appropriately and smartly,’ he says.”

In summary this is not about how social landlords or estate agents have oversold or mis-sold a property it is about the coalition welfare policy of the bedroom tax (and like all others they have ‘sold’ this on the basis of ‘fairness’ too!) which places landlords between a rock and a hard place.  It’s your problem not ours is the coalitions strategy, we are just going to take money away from and tax social tenants with this legal fiction and back of a fag-packet policy.

In my view the bedroom tax is distinctly unfair and I would argue unlawful without a definition of what is a bedroom.

UPDATE Thursday 24th January 2013

The above post has been viewed by more people than any other blog I have issued and by some way and all in 4 days.

Part 2 of this series in which I look at more potentially unlawful aspects of the bedroom tax is here

Part 3 of this series in which I explain the private rented sector dimension which will add cost to the welfare bill and see tenants crammed into ever smaller accommodation is here

Part 4 released today reveals how the bedroom tax will cost the public purse billions of pounds more per year and is here

Part 5 why social landlords have massively mishandled the welfare reform issue is here It also states that if they continue along the wrong path they have chosen and dont engage tenants and see them as people not ‘bricks and mortar’ that when the overall benefit cap and Universal credit come on stream later this year they will really be in the ….

Part 6 is here – how to get around the bedroom tax

Part 7 is here – that HA tenants have less rights under the bedroom tax than council tenants and HAs may be acting unlawfully in the bedroom tax and showing more of the perversities of the bedroom tax and that the government have misled when they say there is no minimum bedroom size (its only been around since 1935!!)

Interesting quirk is that a council tenant could get a lodger only to find the room they’re renting out is not a bedroom which is a criminal offence.  The council their landlord could proscute them for this…and then evict them for this criminal offence as they have breched their tenancy conditions!

Part 8 is here – Where I let all the new readers of this blog know that the overall benefit cap to be introduced this summer is far more punitive than the bedroom tax

Part 9 is here – Which challenges the government view that the bedroom tax is fair?  If it is fair to penalise a tenant for a spare bedroom or spare bedrooms, then why does this government REWARD owners with £1.4bn per year for keeping bedrooms spare?  Even whole houses empty?

Part 10 – is here and likely to be the most important in any challenge to the bedroom tax as the bedroom tax DOES affect pensioners to the tune of £75m per year – THE most powerful lobby in the country will not stand four square behind its unfairness and lobby against it.

The OBC will directly create MORE £100kpa HB families you breeding idiot!

On Wednesday afternoon I posted my last blog about Cameron citing the families getting £100k per year in Housing Benefit and how he churned this out at PMQs.  Today, (Thursday evening) I have a road to Damascus moment.  Joe you numpty why did you not spot the bleeding obvious!!

The Overall Benefit Cap will create MORE families getting £100k per annum in HB!!

Yes the Coalition is that bloody stupid and Cameron is going to deeply regret using the £100k per annum HB family as his own governments policy – our old friend the Overall Benefit Cap – will see more than the 5 families getting £100k per year in HB that at most existed before the LHA cap was introduced last year to cap HB at £400pw.

My post about Cameron at PMQs began: –

“I note today that Cameron at PMQs states that Housing Benefit claimants get £100,000 per year in HB which he used for justification of his coalition’s many ‘welfare reforms’ and to vilify and blame all welfare benefit recipients as scroungers.

Full Fact did a freedom of information (FOI) request to get the actual figures which they published here and this revealed at most that 5 families got this amount in 2010. Note well I used the past tense and ‘got’ and deliberately didn’t use ‘get’ as now there are no families getting more than £20,800 per year or £400 per week in HB as the LHA caps prevented this. So why is Cameron using this?”

My emphasis above is the bloody obvious mistake I failed to see and only dawned on me when I read an article in Inside Housing about the 1% benefit uprating and how junior minister Esther McVey had admitted child poverty would increase because of this.  A comment below the article reveals the bloody obvious.  It said:

“I despair, having just returned from visiting a tenant with 11 children, all sporting designer clothes and trainers, playing with gadgets I can only dream of buying my own kids.”

I have written much about how the OBC has a fundamental and a systemic flaw.  The systemic flaw is that as rents rise faster than the cap or welfare benefits then more and more families will get caught by the cap each year.  Yet here the bloody obvious is the fundamental flaw  – that the OBC penalises large families….and especially the real large families.

A family will 11 children is unusual and as a quick approximation such a family will lose about £340pw in welfare benefits and not get a penny in HB or LHA towards rent.  They will be evicted and become homeless and need temporary accommodation.  That TA cost will be over £2k per week or £100k per annum and have to be met by the public purse.

The same situation applies to all 2 parent families with 6 or more children – they will get their welfare benefits reduced and receive not a penny in HB or LHA towards rent. And that applies whether they live in social housing or rent privately.

Last year I read a seminal article in the Guardian about the LHA caps and I have often used this to illustrate what will happen with the OBC.  A 2 parent 4 child family in London rented a PRS 4 bed property at £450 per week.  The LHA cap of £400pw came in and so a £50pw arrears situation happened and the family was evicted.  What happened next is the key.

Fortunately, the family was able to place 2 of the children with grandparents and so the 2 adults and 2 children (one of who was disabled and his mum the carer) were put in TA.  The TA was two rooms in a Premier Inn at £69 per room per night – a total of £966 per week to the public purse.

A family with 6 children may need 3 rooms, a family with 7+ children may well need 4 rooms in a hotel at £70 (and likely more than this); so 4 rooms at a cost of say £75 per room per night is £2100 per week or £109k per year.

Anyone who doesn’t think the B&B hotel owners don’t have local authorities over a barrel with this and will increase rates massively is a resident of cloud cuckoo land.  You know as DWP has tripled the numbers to be affected by the OBC and…er… sorry I was digressing there!

Because every family with 2 parents and 5+ children (ie a large family)have a potential to be made homeless and placed in temporary accommodation because of the OBC then there must be more than 5 families who will be caught by this and therefore cost the HB bill more than £100k per year.

Cameron will not like IDS’s masterplan now will he when he realises his welfare reforms will see MORE families getting £100k per annum of HB as a direct result of the OBC.

Cameron, IDS et all like to talk the talk of the families who breed simply to get more money off the state.  You know the Wayne and Waynettas of this world that, albeit in small numbers, do exist.  Yet these are precisely the families that IDS’s OBC will have to pay £100k per year in housing costs for!!!!!!

IDS is a breeding idiot isn’t he!!!

These same breeding Wayne and Waynettas the Tories and especially IDS love to cite and especially vilify and use as exemplars of the failings of Labour welfare policy are the same ones that will see them paying out £100k per year in public purse housing benefit and at far higher numbers than the (at most) 5 they inherited from Labour!!

You just couldn’t make this up could you?  Cameron’s inept comments at PMQs will be far more than just inept because the above outline detail proves that the coalition’s welfare policies and especially the OBC will DIRECTLY create far more £100k per annum HB cases than they inherited from Labour.

The above overview is not just a deconstruction and demolition of the sanity of the OBC as one welfare policy, it is a demolition of the entire welfare policy political approach the coalition use and have used daily.  How can they cite old Labour failings when their own policies create even more failings?  The above proves their general incompetence and at the highest level with the Bullingdon Boy himself in line for direct flak!

I’ve called IDS a breeding idiot here … anyone got any idea what Cameron will call him after this?

Anyone still think a benefit cap saves money?  No…I didn’t think so!

The real rub, in summary, is that the coalition have deliberately cited past Labour welfare failings as evidence for reform.  Now we find that the Tories are even more incompetent on this Tory-set strategy and present themselves – again by their own PM set strategy – as even more incompetent!!

How did we all miss the bloody obvious? Bet ‘Call Me Dave’ wishes we had!!

MAJOR UPDATE 9 February 2013

I didn’t expect this to be proved so quickly as it has.  This week BBC London ran a piece on Westminster City Council and how it is paying…wait for it…

£12,768 per month to keep ONE homeless family in temporary accommodation.

Yes that’s £12,768 per month and a yearly figure of £153,216! 

It also included other families who’s cost in HB was £700 per NIGHT (that equates to £255k per year) and other homeless families at a public purse cost of £3000 per week (£156k per year) in temporary homeless costs paid in HB

So much for the 5 (yes that’s FIVE) families the public purse was paying out in excess of £100k per year that IDS and Cameron use to justify their reforms to housing benefit which they have done with the crude LHA cap already and about to do with the equally crude overall benefit cap (OBC) of £500pw.

The coalition policy ‘reform’ and alleged ‘cut’ or ‘cap’ has seen just 1 council alone spend £100k+ in HB on more than the rest of the country did under the old system…you know the one the Tories ‘inherited from the last lot!’

Above I say:

Last year I read a seminal article in the Guardian about the LHA caps and I have often used this to illustrate what will happen with the OBC.  A 2 parent 4 child family in London rented a PRS 4 bed property at £450 per week.  The LHA cap of £400pw came in and so a £50pw arrears situation happened and the family was evicted.  What happened next is the key.

Fortunately, the family was able to place 2 of the children with grandparents and so the 2 adults and 2 children (one of who was disabled and his mum the carer) were put in TA.  The TA was two rooms in a Premier Inn at £69 per room per night – a total of £966 per week to the public purse“

I used this example from April 2012 quite a lot last year in literally dozens of posts I made about the overall benefit cap (OBC) due to begin this year.  My simple point was the LHA caps which limited HB to £250 to £400pw for 1 to 4 bedrooms in the private sector creates massive increased homelessness and homeless cost to the state AND CRITICALLY it should be viewed as a taste of what is to come with the OBC this year.

It is these LHA caps that are incredibly crude that has caused the Westminster City Council examples to happen above.  The LHA cap is why the families cited in the BBC London piece have gone from costing the state £700 per week in LHA to costing them £700 per night – a SEVEN-FOLD increase.

The LHA ‘cap’ just as with the soon to be introduced OBC ‘cap’ may seem on the surface that they save money, but the reality is they cost so much more money to the state, the public purse and to the taxpayer.  The policies are superficial and frankly bullshit in monetary terms and achieve the exact opposite of what they set out and INCREASE WELFARE SPENDING.

Note I am not ignoring the huge negative social and health and educative cost to the ‘homeless families’ here, and it is huge; rather I am keeping the argument about money which was and is the political rationale for them from the coalition.

A fundamental point is that when the OBC hits in the summer of 2103 with its national roll out we will see 170,000 families affected and that massively increases the number of ‘homeless families’ (which more correctly is families who happen to become homeless and ‘homeless families’ has a negative connotation and simply blames and stigmatises them!) across the country.

A further fundamental point is this is not a London-only phenomena and nor is it only applicable to large families as it will hit couples with 3 children right across the private rented sector who will become the new and additional ‘homeless families.’

In terms of putting a cost to the public purse of the OBC we can only estimate crudely yet it will be a significant additional cost.  The average 3 bed private rented property has a rent of £180 per week or so yet the average ‘homeless family’ cost is closer to £500 per week or about a £300pw additional cost to the HB budget.  If as I have estimated the OBC will make 100,000 new additional ‘homeless families’ in its first year than that it 100,000 x £300pw or a £30 MILLION per week additional cost.

In yearly figures the OBC is £1.57 BILLION more in housing benefit public purse costs.

If ‘only’ 20,000 new additional ‘homeless families’ are created by the OBC this is £313m more! So if I have over-estimated this by 5 times, which I havent, then it still costs more than the £270m it claims to save!

That however is just in the first year.  The systemic flaw in the OBC which sees rents rise much faster than the cap figure means each year more and more are caught by the OBC cap which means the public purse HB cost goes up more and more every year!

To the 20,000 new readers of my blog I have had in the past three weeks when I have been writing about the bedroom tax, you will see why for the past year I have been concentrating on writing about the overall benefit cap.  It is far worse than the bedroom tax and viewd simply we can reduce this to a simple statement

The bedroom tax may create homeless families, the OBC WILL DEFINITELY create homeless families!

The average bedroom tax cut is £14.66 per family per week.  The average overall benefit cap cut is £93 per week!

In summary crude caps which on the surface seem sensible and appear they will cut welfare spending achieve the direct opposite.  Whether you are a rabid right-wing conservative or a rabid left-wing communist or anarcho-syndicalist or hold any political views inbetween these two extremes doesn’t matter.  This is not a political issue it is an economic one which argues correctly and in critical detail that the cuts and caps will massively increase the welfare benefit spend.

The government is lying to you when it says these ‘welfare reform’ policies will cut welfare spending and just as the public is now seeing through the bedroom tax bull and bluster that it will reduce spending when it increases cost to the state, the overall benefit cap makes the added costs of the bedroom tax pale into insignificance.  The fact that it send hundreds of thousands of children into poverty, into squalid and unsuitable accommodation which will hamper the children’s life chances, their health, their educational attainment, their social skills and so much more is a point that needs to be made and is political but also correct.  The fact this will ultimately damage the economy in later years too should not be missed.

NOTES

The BBC London report is here and worth watching

If you want to read what I have said about the overall benefit cap see here, here, here, and so many other places on my blog