Bedroom Tax – Are social landlords about to be stung for £1.3bn?

Hansard is a fabulous resource as it states for the public record what every MP says in the Houses of Parliament and you can see from yesterday’s account of the bedroom tax debate (it is 107 pages of A4) just how ignorant MPs, especially coalition ones are of the bedroom tax.

Bedroom Tax and the social tenant being helped to move?

Column 388 exposes the Tory ignorance of the bedroom tax when a Tory MP interrupts Jacob Rees Mogg to say:

Bob Stewart (Beckenham) (Con): If someone living in social housing wishes to downsize and move to a smaller house, I take it—I ask my hon. Friend or the Minister to confirm this—that they would not have to find the costs in their own budget and that they would be helped to move.

Of course this is not the case at all and if it were then perhaps we could discuss how the coalition can say the bedroom tax will not affect social landlords finances when if the cost of moving somebody falls on them!  660,000 moving costs of say £2000 per go is a mere £1320 million isn’t it!! That’s £1.32bn by the way this Tory ignoramus thinks social landlords will cough up!

Yes Lord Freud who said last year that “And I repeat my determination that we will not undermine social landlords’ finances” Yes the same principal architect with Iain Duncan Smith of the bedroom tax and his determination!! Yes the same Lord Freud who said in the same speech about the bedroom tax above that:

1. Some people will have to move, and we have always recognised that fact.
2. Housing support should support the home size that people actually need – regardless of if a person is living in the private rented sector or in social housing.

Ah, so it is some but not all that will have to move (1 above) so if it is 50% then it’s just a £660m cost to social landlords then Lord Freud? Or is your colleague the member for Beckenham just plain ignorant that tenants will have to fund the move themselves?  You know he tokenistic Tory sitting on the government benches during the debate! Yes you should have briefed him much better shouldn’t you!

Simple question – Why haven’t the 250,000 overcrowded families in social housing picked up sticks and moved to the private rented sector?

This is a really interesting question and one that has been (deliberately?) ignored by the coalition.  If the rationale for the bedroom tax is that wasteful scrounging social tenant under-occupiers should move and so free up larger properties which (with a huge assumption) would be filled by existing private tenants and so reduce the overall HB bill as they would be paid less in HB, then why hasn’t the government considered the 250k+ overcrowded families in social housing that would go to a larger property in the private rented sector?

In short, the 250,000 overcrowded families cramped into 2 bed council houses moving to 3 bed privately rented properties!

Table 1 – English LHA rates by bedroom size 2013

£     65.74	£   109.39	£   136.21	£   161.26	£   211.16
Room	1 Bed	2 Bed	3 Bed	4 Bed

The above simple table shows the average LHA that will be paid out next year across England and taken from the DWP’s own release of April 2013 LHA rates. We also know the average social rent is £83 per week overall from the government’s EHS released a few weeks back.

From the above and accepting that a 2 bed social housing rent is £83pw and receives £83pw per week in HB we can see that the difference in public purse cost of moving from a 2 bed social property to a 3 bed private one is an additional £78.26 per week in housing benefit.

So if the 259,000 overcrowded families in social housing moved from a 2 bed social property to a 3 bed private one this would add £1.06bn per year to the overall housing benefit bill.

Conversely the 2 bed social housing units that have been ‘freed-up’ in your jargon would see 259,000 private tenants now receiving £136.21 per week in LHA receive just £83 per week in HB – a fall of £53.21 to the overall housing benefit bill.  For 259,000 this would be a reduction to the overall housing benefit bill of £719m.

So the net effect would see an additional cost to the HB bill of £338.5m per year (£1.06bn less £719m)

You haven’t factored that cost in have you? Yet that disproves your making better use of stock rationale in cost terms doesn’t it?  Oh I see so that’s just a clever piece of spin you thought nobody would notice? I see!

It’s no wonder you have (cleverly?) avoided this additional cost by not focusing on the 259,000 overcrowded social housing tenants that currently reside in social housing. Yes it is a bit remiss of social landlords and the formal opposition for not making this argument I agree – very remiss in fact.  But then again they haven’t exposed the social landlord will suffer the cost of moving £1.32bn issue either have they?  (Cue every Tory & Lib Dem MP breathe a huge sigh of relief that the opposition to the bedroom tax is just as ineptly thought-through as the policy itself!)

Wow, it’s a bloody good job there isn’t enough properties of the right size for both under-occupied and overcrowded social tenants to move to isn’t it IDS? If there was then it would cost you and the taxpayer a hell of a lot more wouldn’t it? 

So we are left with this being a cost-cutting exercise and one targeted on the poor social tenant.  Yet as I discussed here it will cost millions more if not a billion pounds per year more – so even the cost saving rationale is a lie too.

Anyone still think the bedroom tax is thought through?  Anyone care to agree with the junior minister Steve Webb and what he said yesterday about the impact assessment.  You know when he said:

Steve Webb: Our impact assessment is our best estimate based on what we expect the impact of the policy to be. That is all any Department ever produces. We believe that it is a robust best estimate.

Steve Webb was earlier challenged by Karen Buck that the bedroom tax will only save the £480m per year is everyone stayed where they are.  She received this incredulous response from Steve Webb:

“Our impact assessment has a range of modelling on how people will respond, but it clearly includes people staying where they are and paying the shortfall—that is where the saving comes from.”

As I have said repeatedly 660,000 lots of £14 per week is £480m and the exact same amount the government claim this will save!

Karen Buck is 100% correct and the ONLY way the bedroom tax can save the claimed £480m in the first year is if everyone doesn’t move.  The government has taken no effect whatsoever of ANY additional cost the bedroom tax will create – not one penny as £480m is the maximum reduction if everyone remains and there is no additional cost in homeless terms, domestic violence costs, added costs to NHS or social services or to the Police or to any other part of the public purse.

What was that again Steve Webb “Our impact assessment is our best estimate based on what we expect the impact of the policy to be. That is all any Department ever produces. We believe that it is a robust best estimate.”

A best and robust estimate?  Oh dear you do like your porkies don’t you?

PS Steve Webb – despite you and your colleagues  trotting out the new coalition name for the bedroom tax – the “spare room subsidy” 5 times in the debate; guess how many times “bedroom tax” was mentioned?  A mere 87!

Bedroom Tax – One Million ‘spare’ bedrooms in social housing is a known lie minister!

Steve Webb the junior minister at the DWP, the department responsible for the bedroom tax, is blatantly misleading Parliament by stating over and over again that there are one million spare bedrooms in social housing.  That cannot be true by the DWPs own figures which say 660,000 social housing households are affected…you know the bedroom tax scroungers!

Of this 660,000 the DWP says 540,000 under-occupy by 1 bedroom – so that’s 540,000 spare bedrooms on those figures.

Yet to be ONE MILLION spare bedrooms in social housing the other 120,000 (660,000 less 540,000) need to under occupy by a total of 460,000 bedrooms.

So for the government claim to be true and not invented the 120,000 social rented households affected by the bedroom tax MUST have 460,000 spare bedrooms – or 3.83 spare bedrooms each on average.

That means – ON AVERAGE – the government believes there are 120,000 single persons living in 5 bed properties!!! That is what the coalition and DWP are saying when they claim there are ONE MILLION spare bedrooms in social housing during the bedroom tax debate.

UNLESS of course this 1 million figure includes pensioners! Yet Steve Webb and the coalition are still overtly and knowingly misleading if they trot out this figure as part of the bedroom tax as pensioners are not affected.

It is a pity no opposition MP has sought to ask for clarity on this 1 million spare social housing bedrooms.  If this misleading figure does include the exempted pensioners – which for it to have any validity it must – then it undermines the coalition view that this is about under occupation as why should a single pensioner be allowed to roam about in a 5 bed scarce social housing property that is a privileged national resource?  What would that say? That a pensioner is free to take the piss perhaps but woe betide a working-age person doing the same? Yes it would!

Of course NO party is going to say pensioners should be affected by the bedroom tax or any other welfare reform with 40% of the electorate being this ‘grey vote.’  Yet because pensioner stake over half of all welfare benefits it must be a known lie when ANY MP of ANY party says they will reduce the welfare benefit bill if they do exempt pensioners.

Whatever happened to we are all in this together?  Oh I see we are all in this together UNLESS you are a pensioner!!  Sorry my mistake a ‘poor’ pensioner as they are known…yes so poor that their minimum income (circa £140pw) is double that of a working age person (circa £70pw) who must be a really really poor non-pensioner then!

Yet this government have repeatedly stated they are going to reduce the welfare benefit bill, time and time again they have said this and continue to do so today.  Yet they must be knowingly fibbing to you the taxpayer in saying this mustn’t they?  Just like Steve Webb and so many coalition MPs who trotted out “there are a million spare bedrooms in social housing” today!

PS – just being bloody obtuse here but if this government refuse to define what is a bedroom then how the hell can they say there are any spare? Is that an obtuse lie? Maybe Steve Webb should ask Clegg if it’s a non-specific lie?

UPDATE 28 FEBRUARY 2013

Dear Reader, I have just cut and pasted the debate from yesterday’s House of Commons session from Hansard (which runs to 107 pages of A4!) and in summarising the debate for the government just before the vote we find government junior minister Esther McVey saying this:

The hon. Member for Dumfries and Galloway (Mr Brown) questioned the number of spare bedrooms. There are 1 million spare bedrooms in properties occupied by working-age people alone, so that does not include pensioners

SO YES THE GOVERNMENT ARE LYING AND HAVE BEEN ALL ALONG ABOUT THE 1M SPARE BEDROOMS IN SOCIAL HOUSING AS CONFIRMED BY ESTHER McVEY FOR THE GOVERNMENT

Column 340 Steve Webb

“We subsidise a million spare bedrooms in the social rented sector through housing benefit”

A KNOWN LIE

Column 340 Steve Webb

When we have a million spare bedrooms, and over a quarter of a million households living in overcrowded accommodation, we must do better

A KNOWN LIE AGAIN

Column 342 Steve Webb (yet again!)

The 1 million spare bedrooms are a precious resource of our communities and of vulnerable people in them

Column 343 Steve Webb

We have 1 million spare bedrooms among people on housing benefit

Column 348 (Guess who – Yes Steve Webb!)

The most valuable way in which we can look at social sector housing benefit costs is to look at the million spare bedrooms that we currently subsidise

Column 362 (Just for variety NOT Steve Webb but Greg Mulholland – Lib Dem)

Mr Russell Brown: Will the hon. Gentleman clarify something for me? There is much talk about 1 million empty bedrooms, but there is some confusion about that. Are we talking about 1 million empty bedrooms in households that exclude pensioners, or would pensioner households create 1 million-plus empty bedrooms? Are we talking solely about households excluding pensioners?

Greg Mulholland: As the hon. Gentleman has clearly heard, it is the former. I hope that is clear.

Column 386 (Jacob Rees-Mogg) Tory

There are those who have large families, live in small accommodation, or are living in the private rented sector, and cannot get into social housing or council housing because of the problem of under-occupancy, which, we have discovered from the Government, amounts to 1 million bedrooms

Is repeating the lie just sheer incompetence in not having checked it reader?  Or is it something more sinister as this appears loud and clear as an agreed coalition strategy ahead of the debate doesn’t it?

And that brings me back to Column 423 and Esther McVey’s whopper which takes away any ambiguity:

There are 1 million spare bedrooms in properties occupied by working-age people alone, so that does not include pensioners.

Very good of the The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey) to kindly confirm in unambiguous terms the lies that her coalition colleagues have been inflcting on Parliament and the general public.

NEWSFLASH: Simon and Garfunkel comment:

All lies and jest, still a man hears what he wants to hear and disregards the rest….LIE LiE LIE (altogether now) LIE LIE LIE LIE LIE LIE LIE, LIE LIE LIE, LIE LIE LIE LIE LIE LIE LIE LIE LIE LIE

FURTHER UPDATE – Thursday 28 February 2013

I have been made aware of a House of Commons Library Paper referenced SN06272 published on Tuesday this week which is worth reading in full and you can access here

This paper is a Standard Note (SN) which is as near as you are ever going to get to an objective opinion on the bedroom tax.  SN’s are published so as to be read by all MPs and therefore have to be scrupulously objective.

Dear reader, in light of what I have said above about the coalition ministers overtly and knowingly misleading the house (or in simple terms their lies) can I direct you to page 4 of this objective Standard Note on the bedroom tax.  There it says:

“Lord Freud justified the measure during the passage of the Welfare Reform Act through Parliament…

I remind noble Lords of the core argumentation. We do not think that taxpayers should be expected to meet the cost of somewhere approaching 1 million spare bedrooms, a cost of around £0.5 billion every year.

This reveals Lord Freud stated the lie first (is it a noble lie if spoken to the Lords? Dulce et Decorum est dear reader!) in a House of Lords debate on 14 February 2012.  Yes this particularly easy to disprove lie has been around for over a year!

The SN paper goes on directly below to say: –

“It is clear from the February 2012  Impact Assessment that the desired savings in Housing Benefit expenditure will only be realised in full if social tenants do not seek to move from the homes they are under-occupying.

Estimates of Housing Benefit savings are based upon the current profile of tenants in the social rented sector, with little tenant mobility assumed.  If a significant number of tenants wished to move, this would reduce direct savings and place extra demands on social landlords.

So Reader here we have

(a) The HoC Library stating unambiguously that the desired (£480m) savings will ONLY be realised IF tenants do not move

(b) Lord Freud admitting the exact same

(c) Lord Freud saying any tenant movement would reduce this maximum £480m saving which was contained in the impact assessment done by the DWP

Yet, yesterday in Parliament Steve Webb, the DWP Minister (!!!) said this was NOT the case at all and the £480m saving would be achieved whether tenants moved or not!! He also said the impact assessment was a robust estimate yet he thoroughly contradicts that in lying to the House by saying as I quoted here:

Ms Karen Buck (Westminster North) (Lab): Will the Minister take this opportunity to confirm his own impact statement, which makes it clear that if this policy works and encourages people to downsize to smaller accommodation, there will be no savings? Will he explain to the House which of the two objectives he supports: saving money or encouraging downsizing?

Steve Webb: No, I am afraid that the hon. Lady is not correct in saying that. There will be a range of responses to this change, which I will run through later in my remarks. Some people will stay where they are and will pay the shortfall; some people will use a spare room for a lodger or for sub-letting; some people will work or work more hours; and some people will move. Our impact assessment has a range of modelling on how people will respond, but it clearly includes people staying where they are and paying the shortfall—that is where the saving comes from.

The above can be read in Hansard column 335 and in response to a question from Karen Buck which simply read back the DWP’s own impact assessment findings and confirmed above by Lord Freud and by the HoC paper that savings of £480m can ONLY be achieved by every tenant staying Steve Webb says “No, I am afraid that the hon. Lady is not correct in saying that!!!!!!”

Oh dear oh dear oh dear – I wonder how many examples Steve Webb needs from as many objective sources such as the HoC paper and Hansard that proves he lies and does so knowingly.

Now if only a MP would ask a parliamentary question of the DWP Minister asking for the DWP’s breakdown of the numbers of spare bedrooms and how they arrive at this figure and get a written answer!

Getting benefit and have a Facebook account? Oh dear!

Dear Reader,

Below is a guest post from Paul Smyth which I feel is worthy of being read in relation to Universal Credit coming in October and from April in Tameside, Oldham, Wigan & Warrington (so the mixed-age pensioner could suffer the bedroom tax in 6 weeks!)  This is the major welfare reform of the coalition in which benefit claims are assessed online and not in a paper-based form as now.

In simple terms the government has 2 different computer systems, one for welfare benefits run by the DWP and the tax system run by HMRC and Universal Credit is administered through combining these two disparate computer systems into one system at a cost of between £2bn and £3.1bn – the estimates vary.

Paul’s article discusses the implications of this ‘digital by default’ process and I simply reproduce his thoughts and concerns below and invite your comments.

Universal Credit risks exposing people to Russian Gangsters

This April, the new system for paying benefits, Universal Credit, will go live for people in Tameside, Oldham, Wigan & Warrington. The rest of the country will be moved onto it by October. This is the flagship policy of Ian Duncan Smith’s Department for Work and Pensions. Many people like me will be involved in this trial, guinea pigs in a much criticised system.

Having worked in IT for 18 years as a Systems Architect, Analyst and Manager I have been involved in many projects like this; although none so large and complex. To understand how complex this project is we need to, first of all deal with what Universal Credit is and what it’s replacing. The majority of people seem to be under the impression that this is the replacement for Job Seekers Allowance; it’s not.

Universal Credit is intended to replace ALL Government issued benefits, including:

• Housing Benefit
• Income Support (IS)
• Jobseekers’ Allowance (JSA)
• Employment and Support Allowance (ESA)
• Child Tax Credit and Working Tax Credit
• Budgeting loans and crisis loans.

So, in effect, it will affect a much larger pool of people than previously expected, i.e. every person in the country who earns less than £60,000. A large number of these people have no idea that they will be included. That is a convergence of systems from the DWP, HMRC & Local Councils. Each of these systems has to somehow talk to each other, which when one remembers that back in the ’90’s when they started planning to link the then Inland Revenue with the then DSS they found that the DSS had somewhere in the region of 3 million more NI numbers than the IR. I cannot begin to describe just how complex this project is so I won’t try. Perhaps that’s for another article. So let’s focus else.

In order to provide access to this system the Government has come up with the “Identity Assurance Scheme”. In the past you would’ve turned up at the Job Centre along with your Passport and Utility Bills and that would be taken as proof of ID. You could be asked to provide these again at some point but generally these were considered safe. With a purely online system, and after April this will be 100% online, the Government have decided to use third party systems to authenticate and identify you. Several providers have been awarded contracts including The Post Office, Experian, Verizon and Paypal.

The difference between online authentication and physical authentication are fairly obvious. To produce fake documents that will stand scrutiny requires a certain level of sophistication. We’ve all heard about Identity Theft and may even know somebody who’s been affected but in order to receive someone’s benefits one needs to produce the correct documentation and convince someone in person that you are that person. These documents don’t come cheap. In order to impersonate someone online all that is required is to hack their email account. This invariably gives access to their Paypal, Facebook, Twitter, eBay, LinkedIn etc. Pretty much they’re entire digital life.

Most ordinary people don’t fully understand the principals of secure passwords or two factor authentication. They will generally have one password for everything, one they’ll consider secure. But that is far from the biggest flaw in this system; the biggest risk to them is that online fraudsters, especially from China and Russia, will see this as the biggest opportunity in the history of internet fraud. This same system will eventually be used for issuing driving licenses and passports. So we have a system that will use various companies who never meet you to issue passports and driving licences and manage benefits, pensions and taxation. Far too good an opportunity to resist.

So what can be done to make this more secure? Well perhaps they could provide people with special software to protect their computers but therein lies the problem and it’s the problem with this entire approach to “Digital by Default”. The majority of people on benefits can’t afford a broadband connection. They will have to go to libraries or friends and relatives houses, places where they will have no control over the computer they’re using. They won’t know if they’re neighbour’s PC has a virus on it that causes every website visited along with every key typed to be transmitted to an organised crime syndicate in Russia or China.

They would most likely be having to check their email while they’re there and perhaps log into Facebook. Of course then they’ll go about their business as usual having no idea that someone is accessing their benefit records and changing the bank account details, hacking into their Facebook account to send messages to their friends which contain links that will cause their friends to be hacked too. It’s quite possible that until they next visit the cash machine, they might not even know what’s happened to them. They will have been digitally burgled, their email account taken over, no way of getting back their Facebook account, their bank account emptied, their benefits being sent to China or Russia and their identity stolen.

One of the biggest issues is going to be demand on the libraries who’ve managed to survive the Spending Review. They will have queues of people wanting to use their computers to access the internet, people who have no internet, indeed people who don’t own a computer at all and possibly never have. They won’t know how to use a computer much less have a quick look around the back for a key logging device. It’s quite likely more local gangs will realise very quickly the opportunity that these places present. In one week they could very quickly gain access to hundreds of bank accounts. In essence we could be looking at a new organised crime network of American Prohibition proportions especially when you consider that according to ONS figures 20% of households in the UK do not have internet access and that rises to 36% for households where one of the occupants is over 65.

Many of these households have never needed nor wanted internet access, particularly the over 50’s. Now they are going to have to learn how to use the internet, acquire an email address and learn how to navigate a website. They won’t know what’s suspicious and what isn’t.

I know from the experience of own Mother when she was tricked into paying £29.95 for the free Adobe Reader. She searched Google, the first link that came up was a scam but she knew no better. She paid her money and got sent a link to Adobe’s website. Of course as soon as she told me what she’d done we managed to stop the payment and get the card stopped but had she not done so, her credit card would’ve been used to the credit limit and she would’ve been liable.

So what we have is a flawed system that has been ill thought through which will put the most vulnerable people in our society at risk of fraud and destitution without the support required to ensure that these people are protected. There aren’t enough facilities available for them to use to access it and they don’t have the money to provide their own. The DWP most certainly doesn’t have the trained staff available to help them and considering the budgeting choices councils have to make, they don’t either.

Bedroom Tax – Will cost millions more than it saves and is political

This paper argues:

1. The bedroom tax will cost millions and perhaps a billion more to the public purse than it saves
2. The bedroom tax is a politically motivated attack nothing to do with cost saving as
3. The removal of council tax relief for under-occupiers, owners, social and private tenant would save the public purse TEN times the claimed bedroom tax saving

The way I look at any issues is first to look at the bottom-line, do the numbers stack up in other words. It helps being numerate and I have been called a freak as I see patterns in numbers and don’t have any problems with arithmetic. Yet so many of the population at large do have problems with numbers and especially if they attend a palace in Westminster, that is MPs.

The bedroom tax will have impacts which are not included in the purported impact assessment which all have a cost to the public purse.  Homelessness is one of these and there are many more such as an increase in domestic violence and abuse costs as well as displacement costs of tenants moving and so many more – Notably the coalition does NOT take any of these costs into consideration in its purported impact assessment; rather it simply states with incredulity that the public purse will save 660,000 lots of £14 per week or £480m in the first year.

Here I discuss a tiny proportion of these additional public purse costs to expose the coalition saving of £480m per year to be a myth.  In fact the bedroom tax will cost the public purse millions MORE per year and as much as a billion pounds more!

Shelter has done a cost of homelessness research here which makes interesting reading as it looks at the costs just of a homelessness application and decision and landlord costs and puts this at £6690.  As has the Govan Law Centre in Glasgow  which researched much more deeply using Shelter Scotland figures which look at wider costs to thee public purse such as NHS etc and puts the cost at £24,000. None of these directly look at the impact of domestic violence and abuse which I briefly looked at here that if the bedroom tax sees a rise of 5% in DV will add a further £275m per year to the impact cost of the bedroom tax. So the cost could well be more than £24,000 per case and indeed the GLC costing say that complex cases can cost £83,000 and we know that Westminster is currently paying £12,768 per month or £153,000 per year in temporary homeless costs.

The bedroom tax will cost the social tenant on average £14 per week we are informed which is £728 per year and the government simply multiply this by the 660,000 they say are affected to arrive at the £480m per year saving.  Yet that figure assumes no additional cost to the public purse whatsoever and in the government’s view they will save £480m in year 1.

Yet if the homeless cost is £24,000 per year it would take just 20,000 evictions and homeless cases to cost the public purse an additional £480m per year and wipe out any savings.  20,000 out of 660,000 affected means that if just 3% of bedroom tax affected social tenants are evicted then there is no saving at all to the public purse!

It is worthy of note here that the direct payment pilot programmes have shown rent arrears increase from 2% to 8% in Torfaen, they have quadrupled – and that is with a very carefully controlled set of social tenants which excludes those likely not to pay too!  So if 8% of the 660,000 bedroom tax affected social tenants are evicted, which is 52,800, then the cost to the public purse at £24,000 each becomes £1,267 million or about 2.5 times the expected savings of £480m and a net cost in the first year of £787.2m!

Throw in the additional £275m in DV added costs and it is easy to make an argument that the bedroom tax will cost an additional £1bn to the public purse in the first year!

So much for the bedroom tax being a saving!!

Last week I posted a blog that said the overall benefit cap due in the summer with create 8 times the number of homeless cases than the bedroom tax which it will given the average reduction in benefit is projected to be £93 per week compared with the £14 per week bedroom tax deduction.  That does NOT mean the bedroom tax will not directly create homelessness (arrears to eviction to homeless) as it will; it’s just that the OBC will create homelessness in far greater numbers.  I said there I can easily see an additional 100,000 homeless cases being created next year and this adds to my argument above and adds a further £2.5bn in cost to the public purse.

Again so much for the overall benefit cap being a saving!!

Both of the above don’t operate in a vacuum either and when we throw in direct payment of HB to social tenants and the problems that will cause with budgeting and factor in the removal of council tax benefit which will see social tenants having to pay part of the council tax for the first time the real issues begin to emerge.

On that point a few weeks back I wrote that the bedroom tax is the exact opposite of council tax relief which sees the government rewarding single people with a 25% deduction in their council tax.  The bedroom tax penalises the single tenant in a benefit deduction yet single person council tax relief rewards them!  Over the weekend I received some information about a Freedom of Information request from Mendip Council which illustrates this huge perversity. They will receive a reduction in bedroom tax HB of £497,000 or so per year; yet will pay out £5.14m per year in single persons council tax relief.

So one council will reward its single occupants by 10 times more than its tenants will be penalised by the bedroom tax!

Mendip District Council is a good example to use as it has 71% of its properties owned or mortgaged and close to the national average.  It also has 67% of its social tenants claiming HB and bang on the national average. It’s social rented housing to private sector housing numbers at 66:34% are also very close to the 67:33% national average and so it is in Housing Benefit terms very close to the national average council.

If we extrapolate this we see £480m being taken nationally from single ‘under-occupying’ tenants yet £5bn being given to single ‘under-occupying’ tenants and owners for the same principle reason! Whether you are a social tenant, a private tenant or a homeowner you receive a benefit and are paid that by the government for under-occupying through the 25% council tax relief – the exact same issue a social tenant is being penalised for with the bedroom tax

IF the government abolished the council tax 25% relief for being a single occupier then this would save ten times the amount the bedroom tax would.

It would also mean the average weekly deduction to all single occupants, whether social tenants, private tenants or home owners would be £6.94 per week and less than half the average £14 per week bedroom tax deduction.  That would cause less homelessness and less stress and TEN TIMES the amount of money would be saved to the public purse.

Yes this would affect homeowners and pensioners – the precise two categories of groups the government is seeking electoral support from!  Yes reader you begin to see what the bedroom tax is – an attack on social tenants and social tenants alone!

Note well I haven’t included the council tax discounts landlords get from having properties empty or the council tax discount people get on their second or third or eleventh homes, which of course would save even more to the public purse wouldn’t it!

UPDATE 16:00

If my figures above of a £5bn per year cost are accurate for the 25% single occupier council tax rebate are correct then why not reduce this to 10%. This would produce a saving of £2bn per year to the public purse and be 4 times the bedroom tax saving and we could abandon the bedroom tax altogether.

It would apply to all single occupiers, which means owner occupiers as well as tenants and to pensioners too. It would mean every single occupier having a benefit reduction of £2.78 per week – and after all aren’t we all in this together?  £2.78 per week is far more manageable than £14 per week (the national average) or even £22 per week (the London average) and it would negate the homelessness aspect described above and the huge stress of moving and displacement cost the bedroom tax will cause.

It could even be reduced to 20% in Year 1, 15% in Year 2 and then 10% in Year 3 and still save the public purse far more than the bedroom tax.  It would be equitable and fair as it would apply to all under occupiers regardless of tenure and not just social tenants.  After all every single occupier get this relief and so why is it that just social tenants are getting hammered by the bedroom tax while single owner occupiers are being rewarded?  We also see single social tenants being bizarrely rewarded with council tax relief and at the same time penalised with the bedroom tax and that just doesn’t make sense!

It is also bizarre that empty homes get this benefit when the purpose we are told of the bedroom tax is to better occupy available properties!  For an empty property to get public purse funding is bloody ridiculous.  For a second and third and subsequent home to get public purse benefit is also bloody ridiculous too in light of the making better use of stock rationale of the bedroom tax.

WHY, I ask myself, is it only social tenants who are getting penalised for single and under occupancy?

Scrap the bedroom tax immediately and scrap the 25% public purse benefit of council tax relief and the public purse saves more and does not have the homeless and displacement cost and domestic violence increases.  Then by all means have a rationale debate and make better use of stock in social and other forms of housing.  Why for example are social tenants given just £20 per week tax-free then taxed at 85% if they take in a lodger when an owner occupier gets £81.45 per week / £4250 per year tax-free if they take in a lodger?  Why not increase the £20 tax free element to £50pw for a social tenant and reduce benefit thereafter by 45% – the top rate of tax a billionaire pays?

Why do social tenants have to be disincentivised to move or change when everyone else is incentivised?

The perversity of the bedroom tax in theory and in practice is there for all to see and it is and needs to be seen for what it is – a politically motivated attack with no economic rationale – on social housing.

I was not surprised to read that a 50,000+ home housing association said last week it had downsized 16 tenants and had plans ro downsize 16 more.  32 tenants out of 50,000+ shows just how bogus the argument is that tenants will downsize.  You would expect about 8,500 of the 50,000 to be affected yet just 32 will downsize – about 0.3% means that 99.7% will not downsize!!

It’s time such alternative or comparative arguments were made to go alongside the many legal arguments that have already surfaced in the past month or so.  It’s time to challenge the bedroom tax not just on ts emotional shortcomings as the human interest stories the press and media love, but on ts alleged economic rationale of saving which is bogus or its political rationale of fairness which is also bogus or that it will through disincentives make better use of scarce housing stock.

Bedroom Tax – the absence of advice on life-changing decisions

I am a cynical bugger which means I look at things from a cui bono perspective – who benefits or whats in it for me in other words.  I don’t mean me personally I mean all of the actors involved and so in the bedroom tax debate that means tenant, landlord and government.

Take advice as an example, advice on the bedroom tax I mean. There’s next to none from the government, the same from tenant groups and a bit more from the landlord yet none of it is complete and a lot of it is wrong.

For example we hear stories of tenants who have been in their social housing homes for 20 or 30 years and the kids they raised have flown the coop leaving mum and dad alone in a 3 bed house who will be told to (a) downsize or (b) suffer the 25% bedroom tax deduction.  Yet how many of them have been advised to look at their right to buy from their landlord?

Before I go on with this line of argument I despise the right to buy (RTB) as this is what has seen over 2 million social housing properties taken out of the social housing capacity and it is easy, and correct, to make a causal link between RTB sales and the chronic national shortage of available social housing.  We even had the rabid right-wing Tory Peter Hitchens say on BBC Question Time this week that RTB was and is a disaster. Peter Hitchens admitting Thatcher was wrong is like….oh well you get the picture!

The reason I raise RTB here is in terms of being advised, tenants being advised of their options to be precise and whether a social landlord would or indeed has advised the bedroom tax affected social tenant of their RTB options.  The bedroom tax is causing great anxiety amongst social tenants affected and to move house is a life-changing decision yet in one respect the landlords who are advising them of options have a conflict of interest in this dimension.  The social landlord obviously doesn’t want to lose its properties through the RTB yet they are in a position, fostered on them by government who do want the RTB, of a potential conflict of interest.

I am NOT saying, for the avoidance of any doubt, that I suspect or know that social landlords are or have been acting improperly; rather I am just highlighting a potential significant conflict of interest.

Moving house IS a massive decision for anyone and one that should ONLY be undertaken after receiving full and impartial advice yet there is a deficit of impartial advice and advisors around. Just who do you turn to if you are bedroom tax affected tenant?

Further, it is not just the bedroom tax and advice has to include all the other welfare reforms due to this year too.  The loss of council tax benefit, the overall benefit cap, the payment of Housing benefit from weekly to monthly and being paid direct and Universal Credit.  The bedroom tax is not being imposed in a vacuum and so many other changes will occur this year that will impact on any decision to move or stay.  Who is advising on this? Where does a tenant go to find out? Just how can a social tenant affected by the bedroom tax get full and impartial advice?

I suggest the answer to that last question is nowhere and the social tenant cannot be adequately advised by anyone…yet they have to make a life-changing decision with firstly the bedroom tax and then so many other ‘reforms’ due this year.

Moreover, many of the ‘reforms’ due this year including the bedroom tax are not yet finalised as to how they will work and affect the social tenant.  We see the government allegedly looking again at the disabled (which will not happen) and especially they will be looking again at how the mixed-age pensioner couple will be affected – which will happen and I strongly suspect is already happening without the public pronouncement of this that the ‘disability’ question has had on the BBC this week.  The government won’t define what is a bedroom for fecks sake and also won’t define who is ‘vulnerable’ in Universal Credit – as they hadn’t thought of that. Just as they hadn’t thought of literally scores of other aspects and impacts of the ‘reforms.’

If I downsize as a secure tenant why are only introductory tenancies the ones on offer? Will I lose my right to buy? – These are just two questions raised on one of the Facebook pages this morning that caught my eye and this came directly after a post saying the DWP has confirmed the bedroom tax won’t affect the mixed-age pensioner couple which it will.  What we have with the bedroom tax is a chronic level of misinformation and assumptions – ALL ABOUT A LIFE-CHANGING DECISION!!

I read the Universal Credit regulations this week and a clause on notional income caught my eye.  The government is going to assume the claimant gets all the benefits they are entitled to and pay Universal Credit – which in overview replaces almost all benefits – on the basis that all other benefits are paid.  Yet we see reports that £3bn of Pension Credit is unclaimed and £6.7bn of Housing Benefit is and also £8.4bn of working tax / child tax credit is unclaimed. So if there is one piece of advice all tenants and all of the general public can and should receive it is make sure you claim all of the benefits you are entitled to – and as it happens if you google “entitledto” you will find a benefit calculator that does that for you.  In the simple sentence above I have said there are £18,000 million of eligible and due welfare benefits that are not claimed.  You don’t get benefits or tax credits if you are not entitled to them so claim them.  £18,000 million (£18bn) – compare that to the claimed £480m bedroom tax deduction!  You are not a scrounger if you claim benefits you are ENTITLED TO!!!!

This brings me back to the tenant being advised.  The government rationale for the bedroom tax is you are NOT ENTITLED to benefit for a spare bedroom (however the hell they define that!) Yet you ARE ENTITLED TO a huge array of benefits that you do not currently claim. So get out and claim them.

Of course the government are relying on you NOT to do that as it will cost them an arm and a leg and BILLIONS extra per year. The government wants it cake to eat as it wants to castigate and blame the benefit claimant for being feckless or lazy – a policy of where there’s a claim, there’s a blame!

You are already being blamed so get off you lazy benefit-scrounging arses and claim what you ARE entitled to. (I never thought I would write that line!!) Who knows? Maybe the extra income you get will enable you to sit back and think or even buy some financial advice on the life-changing decisions you will have to make this year? Not that anyone can even sell you that advice as nobody knows what the hell is going to happen and especially the government – so it may buy you some breathing space if nothing else.

PS – Did you know this government ran a consultation this year saying they should stop releasing the amount of benefits that go unclaimed?  True! Thankfully they were overwhelmed with responses saying dont do this and they backed down. There is billions of YOUR MONEY out there people, go claim it you’re a scrounger anyway!

Bedroom Tax – it wont create homelessness but the OBC will – 8 times as much

Over the past month I have been writing and reading much about the bedroom tax and there is a lot of nonsense about.  I have seen comments that it affects all social tenants not just those on HB and many similar nonsenses and while that it not surprising some of the comments and articles have been particularly inept as have some of the obvious points people assume – for example the 14% and 25% deductions are not from the HB you get, they are from the rent level.  So if your rent is £100pw and you get £80pw in HB it is 14% or 25% from the £100pw and not from the £80 HB amount.

However one of the huge misconceptions is that the bedroom tax will create evictions and homelessness.  This is flawed for a number of reasons but let’s assume the tenant doesn’t pay the bedroom tax deduction and the rent is £100pw.

This means the tenant will be accruing a £14pw arrear each and every week and so after 5 weeks they are £70 in arrears and after 50 weeks they are £700 in arrears.  £700 is the equivalent of 7 weeks rent and a social landlord will be unlikely to secure an eviction on £700 or 7 weeks arrears.  Even the much maligned Ground 8 which is the only ground the social landlord can use and know a court will award an outright eviction requires 8 weeks of arrears or £800 and this is over 57 weeks of not paying the £14pw bedroom tax deduction.  There is also a legal question over whether a social landlord can use this Ground 8 and whether it is ‘proportional’ to do so.

The £25 per week deduction would take 32 weeks to accrue 8 weeks rent arrears so almost 8 months and hence eviction directly and solely related to the bedroom tax deduction thus causing homelessness is not a quick process.

By comparison the overall benefit cap of a maximum £500pw in all benefits sees an average benefit cut of £93pw and that £93pw is taken off your housing benefit.  If we know the average social rent is £83 per week then 8 weeks arrears is 8 x £83 or £664 and it will take just over 7 weeks to get to that stage.

So as we can easily see the OBC makes eviction and homelessness inevitable as the £93pw deduction is almost 7 times the level of the average £14 per week bedroom tax deduction. We can simplify this and say the bedroom tax may, in time, lead to eviction and homelessness, but the OBC WILL and WILL QUICKLY lead to eviction and homelessness.

I have criticised social landlords for their lack of challenge to the bedroom tax and with some justification at least overt and in the public domain challenge to it.  Yet their level of challenge to the overall benefit cap has been so much worse and largely non-existent.  This is all the more surprising when the OBC impact assessment says 46% of those affected currently live in social housing.

Last year I spent a lot of time raising the OBC issue, largely to a housing only audience or readership, and revealed how it is much worse in financial terms to the social landlord than the bedroom tax.  Yet, still the line adopted by social landlords was our rent is only £80 per week so this means very few social tenants are affected from the £500pw cap.  It would mean only those households with 5 children or more are affected  (such families get £459 per week in other welfare benefits leaving just £41pw as the maximum HB they would get towards rent)

This year, at least in the last 4 weeks, I have been writing about the bedroom tax almost exclusively and these posts have been viewed by as many people as all my blog posts throughout the whole of 2012 – in 4 weeks!  Tenants and non-tenants have clearly been reading these posts and it is not just the housing professional audience from last year that accounts for this 13 fold rise in reading / blog views.

So that is why two things are important.  Firstly bringing the OBC much bigger danger to eviction and homelessness to the new audience and; Secondly explaining that context.  If it takes 57 weeks for a bedroom tax affected tenant to get to the ‘necessary’ level of rent arrears to cause eviction and homelessness but only 7 weeks for the OBC affected tenant, then in that 57 weeks for every one bedroom tax affected tenant there are 8 OBC affected tenants.

Hence the OBC will see 8 times as many social tenants evicted for arrears and made homeless for every 1 the bedroom tax does.

The social landlord cannot simply say too few tenants are affected as the 46% of social tenants affected is a staggering 78,200 social tenants.

I have read somewhere recently, though I cannot source at the moment, that the average eviction cost to a social landlord is £6,900 or so including the arrears so when we factor that in this becomes a £540m cost in the first year to social landlords – more than the bedroom tax of £480m.

The social landlord must have far greater faith in its FTA policies than I have! (Former Tenant Arrears) – ignore that reader that’s an in-joke for housing professionals!

So, it is time the social landlord started challenging the overall benefit cap and openly so.  It is time the government realised openly that the OBC will cost more than it claims to save – and note very well that the above does not include a penny of the extra costs of accommodating families in temporary homeless accommodation and these costs are huge.  While most will not have to pay £12,768 per calendar month for this – Yes that is a monthly cost and yearly one of over £150k – that Westminster are paying, the temporary homeless cost is enormous and could well be over £3 billion per year if the average national weekly TA homeless cost is £500.

So we see a cut and alleged saving of £93 per week giving a direct cost of £500 per week and an overall added cost to the public purse.

The social tenant and non-tenants (and even the ‘professional journos’ and Labour MPs that have recently jumped on the bedroom tax bandwagon) that now read my posts will be rightly alarmed at such figures.

If my bedroom tax post scan be characterised as What is a bedroom the OBC posts I posted last year is characterised by Where the hell will large families live? If the overall benefit CAP means they can’t afford to live in council housing – the cheapest national housing option they have two choices (a) stay in homeless temporary accommodation permanently or (b) split up the family so a household of a couple with six children becomes 2 households with a single parent and 3 children.  The housing benefit bill is going to rocket and the OBC will force families to break up.

Just as the general public is becoming horrified at the consequences of the bedroom tax yet thought initially that the paying for alleged spare bedrooms was right, the same public who were 74% behind the overall benefit cap of £500 per week for the same superficial reasons will also be horrified when the OBC rolls out nationally in the summer.

Just as I argued then the Labour Party arguing for a regional cap was a stupid against the overall benefit cap we will doubtless see the Labour Party look at the OBC and the huge public outcry it will cause and launch and anti OBC campaign just as they launched an anti bedroom tax campaign 3 days ago!! Remember the public outrage of Newham shipping out its homeless cases to Stoke anyone shortly after the £500pw cap was announced and Joe Public said it was wonderful? This is now commonplace with all London councils so then think that this OBC is not a London only issue; this homeless diaspora will happen nationally in both the private and social housing sectors because of the OBC.

I was tweeting while watching BBC Question Time last night and a tweet from Full Fact (from memory) said 90% of the welfare reform / benefit cuts have still to happen.  The OBC is THE biggest of the lot and ahead of direct payments or council tax payments or Universal Credit. It is due this summer so time for all to get their fingers out – the social landlord, the tenant, the activist, the Labour Party and the general public.  Yes, before you ask the mixed-age pensioner couple will also be affected by the OBC and yet again the coalition have said semantically that pensioners are exempt!  What was that you say DHPs? Yes the DHP budgets have to attempt to cover this £93 per week deduction too and you thought they were only available for bedroom tax affected?

Unusually, for me, I haven’t littered the above with links to my many previous blogs about the OBC and there are many, maybe upwards of 20.  Reading them will also see further huge complexities about the systemic flaw in the OBC which will see more and more tenants – social and private – caught by the OBC each and every year – Yes the nightmare scenario I describe above gets worse every year with more families evicted, more homelessness and more public purse cost to go with that human misery.

Anyone still think this coalition knows what the hell it is doing?

Bedroom Tax- The DWP confirm and define what is a bedroom!

I have written a lot about what is a bedroom – that simple question that is highly pertinent to the bedroom tax debate.  After all I argued, how the hell can you tax something which you are unwilling to define?

I have often cited the A4/2012 HB circular as the official guidance from the DWP to local councils and it is explicitly clear the DWP will not define what is a bedroom.  It says:

Bedroom size

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

Now I read an article in Inside Housing with regard to the Scottish issue which I discussed here and in that article we have this:

A DWP spokesperson said the department did not fear legal challenges due to the lack of definition of a bedroom. He said it is clear that the definition of a bedroom is up to landlords and is whatever is stipulated in individual tenancy agreements.

As you can see the DWP spokesman has said that a bedroom is whatever it says on your tenancy agreement.  This IS a definition from the DWP and IS a fundamental change.

Is this a case of a DWP spokesman overstepping the mark and creating new official guidance or is this new policy and the DWP has defined what a bedroom is?

****************************************************************

UPDATE & COMMENT

What is NEW here is that the DWP has never before said a bedroom is what is says on the tenancy agreement.  It may have been implies or inferred but as you can see from the A4/2012 above it has never been said before and that is very significant indeed, assuming this is now DWP policy and not an accidental or even deliberate piece of misinformation from the DWP spokesman.

The guidance has always said it is up to the landlord to define the number of bedrooms a property has and the social landlord could do this in a number of ways – they had choice in other words, So the landlord could reclassify and or classify this in ‘x’ number of ways.  Now the DWP has defined what is a bedroom to mean what it says on the tenancy agreement and taken away any inference and made what it says on the tenancy agreement definitive.

A tenancy agreement is a contract and is subject to legal interpretation – it could say the moon is made out of cream cheese but doesn’t make that legally binding – and we have seen tenancy agreements having their terms ruled as unfair in the past.  That means – obviously – that a tenancy agreement is NOT definitive and is subject to the law.

So is a tenancy agreement that says a property has 3 bedrooms when in fact it is only 2 bedrooms plus a boxroom fair?  The courts can now decide and directly because the DWP has defined a bedroom as what is says on the tenancy agreement.  Before this new change and explicit definition a court case could falter as what the tenancy agreement says was NOT definitive in determining whether the bedroom tax applies.  Now with this change it does say the tenancy agreement is definitive.

So a tenant taking a case that the tenancy agreement was wrong was, until today, potentially not going to get into court to be argued.  But now the DWP has made the tenancy agreement definitive that constraint or block on a tenant legally challenging the terms of the tenancy agreement has been removed.

This is why in my opinion the DWP has steadfastly refused to define a bedroom for bedroom tax purposes.  Yet saying it reveals precisely and openly what the policy does in placing social landlords in a bind and between a rock and a hard place.  Now that they have said this explicitly, it shows that the social landlord WILL face legal challenges from tenants on the number of bedrooms that the social landlord informs the local council each property has.  It exposes the social landlord to a huge number of legal challenges from tenants on what is a bedroom and how they – the social landlord – has defined this in the tenancy agreement and the tenancy agreement alone.

BBC News solve the bedroom tax and the Middle East question!

I have just watched the BBC News…you know the main tea time news programme that we were all brought up to believe gave us facts and was free from political bias.  If it still is unbiased and not a propagandist broadcast for the coalition then the bedroom tax report I have watched tonight there was truly bloody incompetent.

I see the Powells have swallowed the coalition propaganda on this and especially the claim that this will free up more houses.  Think it through people please.

The government knows and accepts that a small percentage of these alleged underoccupiers will downsize and also accepts and knows that few will or can as last year in social housing only 68,000 1 bed properties became available, or about 10% of the alleged underoccupiers.  Further the government knows and again accepts that 260,000 or so of existing social tenants are overcrowded.

For two obvious reasons if a social tenant underoccupier downsizes their place will be taken by a social housing overoccupier or overcrowded family.  Firstly, local councils have statutory responsibilities to rehouse overcrowded families and secondly, the social landlord will rightly prioritise a tenant they know and in effect a house swap will happen – the underoccupier and the overcrowded families swap properties.

This has two impacts.  Firstly, no bedroom tax applies as none of these families are caught by it.  Secondly, no new home is freed-up as the government propaganda suggests.  So there is no change in the social housing composition and no saving from or to the public purse.  The government’s argument is that the social tenant underoccupier will have to move to a smaller private property (and note a 3 bed social rent is often lower than a 1 bed private rent and also in HB terms too) and their 3 bed social home will see a privately renting family like the Powell’s move in.  Yet that will not happen for the reasons above!

The BBC news report by Mark Easton (see his competence in bedroom tax matters here) does at least go on to say that the figures of 660,000 alleged underoccupiers and 260,000 or so overcrowded families yet ends with a throwaway comment from IDS (who does not appear in the programme) to say he has asked the DWP (that is his own department or asked himself!!!) to look again at how disabled people are viewed.

The BBC programme gives the impression tha IDS is asking himself to look again at exempting ‘the disabled.’ Yet never once does the BCC mention this involves 420,000 of the 660,000 bedroom tax affected households – exemptions for 65% of those affected.  Or if you want an analogy reader that’s like the Israeli Prime Minister telling the BBC he will look at withdrawing from the West Bank and the BBC believing that was credible!

PS Reader I have it on good authority that the next BBC News programme about the bedroom tax is to be presented by Lord Lucan

Back to the BBC News.   Lord Freud (the appointed not elected Welfare Minister and some say architect of this charade) who says: –

“The government’s decision has been we can afford to support people in the bedrooms they NEED, but not to fund EXTRA bedrooms”

The BBC then shows a couple one of whom has a disability which means the partner has to sleep in another bedroom.  This couple – the Lambs – are one of the alleged underoccupiers and he has a brain condition and his wife is his carer. Mark Easton then says: –

“Because of Peter’s condition the couple cannot share a bedroom but under the rules the EXTRA bedroom will see benefits cut.”

At no times does Mark Easton question that the couple NEED this alleged EXTRA bedroom or query why the bedroom tax is cutting this alleged EXTRA bedroom which by definition cannot be EXTRA or not be what they NEED!  Now imagine if the Lambs case had been shown BEFORE cutting to Lord Freud and Lord Freud asked if he thought the Lambs had more bedrooms than they NEED?  Some very politically biased editing there BBC as the way I described is usually the way news programmes edit by asking responsible ministers to comment on this absurdity of their own making.  But no not the good old impartial BBC!!

The BBC Ten O’clock repeats the same charade with the same biased and NOW it would seem clearly errant report.  The DWP press office at 7pm tonight – that is after BBC 6 O’clock news – which says:

1. DWP Press Office‏@dwppressoffice          No change in spare bedroom policy. As with all reforms, we will monitor closely as it comes in this April.

Pasted from <https://twitter.com/dwppressoffice>

Oh Dear BBC News.  If was first draft of this above some would argue was harsh on you, now after the DWP have themselves stated there is no change and no look again at the bedroom tax, you still repeat the same propagandist bull on BBC News at Ten – 3 hours after DWP confirm they wont look again or anew at this!!

Bedroom Tax – the bullshit klaxons and why its a gender issue

There are a million spare bedrooms in social housing – cue the bullshit klaxons going off left right and centre at this Tory propaganda bullshit.  It’s a lie any way you look at it which I will come on below but more importantly it is used to ingrain into the publics mind that social housing is badly utilised and is wasteful.  That is another reason why the Dark Arts masters in the coalition IDS and Grant Shapps (the Chairman and former Housing Minister) now seek to call the bedroom tax the ‘Spare Room Subsidy.’

Goebbels himself would be proud of the propaganda the Tories such as IDS and Shapps (and even the I am a Tory in all but name Lib Dems such as Steve Webb) spew forth on a regular basis.

See here for example of Shapps calling the bedroom tax a spare room subdisy and stating 3 times it is 1 million spare rooms in social housing.

Spare Bedrooms 1?

Let us look at what we have been told.  660,000 social properties under occupy of whom we are told 81% underoccupy by 1 bedroom and 19% by 2+ bedrooms

• Of those 81% which is 540,00 who allegedly under occupy by 1 bedroom makes 540,000 spare ‘bedrooms’ to add to the total.
• To that we add the remainder (660,000 – 540,00) 120,000 who underoccupy by 2 bedrooms and this adds 240,000 to the 540,000 to give 760,000 in total
• The 1m spare bedrooms is a myth unless of course the 120,000 households who underoccupy by 2 or more bedrooms underoccupy by 3.83 bedrooms each!!!

Unless we have 120,000 single social tenants roaming around in 5 bed properties the coalition claim that we have 1 million spare bedrooms in social housing is a downright LIE! 

Yet who challenges these off-the-cuff remarks and who have ever asked the government to produce any evidence of these claims?  Absolutely nobody!

So it must be that the anti bedroom tax campaigners, social landlords, the Labour Party and all others who oppose the bedroom tax must think the government wouldn’t lie!!!!

KLAXONNNNNNNNNNNNNNNNNNNNNNNNNNN!!!

Spare Bedrooms 2?

The English Housing Survey which is the largest survey of housing and the most official source was published last week by CLG (that’s the government department responsible for housing.) As one of its key findings it says that underoccupancy in social housing is 10%, yet in private rented housing it is 16% and in owner occupied properties it is 49%.

Rates of under-occupation remained substantially higher in the owner occupied sector (49%) than in both the social rented sector (10%) and private rented sector (16%).

English Housing Survey ISBN: 978-1-4098-3777-0

Straightaway those figures reveal there is 60% more underoccupancy in private housing than in social housing.  Yet the coalition would have us, the general public, the electorate and taxpayer, that social housing is notoriously inefficient when it comes to allocating social housing. (I wish those bedroom tax bullshit klaxons would kindly and ever-so diplomatically fuck off reader!)

The EHS also revealed there are 3.8m rented houses in the private sector and 3.8m in the social rented sector so they are the same size.  Therefore whatever way you measure underoccupancy (and there are at least two ways) the private sector has 60% more than the ‘grossly inefficient’ social housing sector the coalition would have us believe! (Don’t worry I have found a mute button for the klaxon – although the vibration it makes is rattling the desk!)

• So 10% of 3.9m social housing properties is 390,000 spare bedrooms
• 16% of 3.9m privately rented properties is 624,000 spare bedrooms
• 49% of 14,148,794 owned properties is 6,932,909 spare bedrooms

So ask yourself why the government is only targeting and decrying social housing on the spare bedroom and implied inefficient waste grounds!

Spare Bedrooms 3?

Take in a lodger the coalition cry – just as many tenants cry too thinking how they can prevent their daughters being raped by them, but that’s another story – and we will even disregard the first £20 per week rent the social tenant charges – ah the benevolence of this caring government eh?

Well after that first £20 per week they will reduce your benefits by 85p for every £1 you charge – Yes an effective tax rate of 85% – such a generous bunch aren’t they taxing the benefit claimant at 85% while billionaires only pay 45% (and that of course assumes they pay at all!)

But let’s go back to the English Housing Survery…you know the official figures reader.  The 3.8m PRS tenants and 3.8m social tenants live alongside 14,148,794 owner-occupiers.  There are spare bedrooms in 48% of these households which makes at least 6,932,909 owned properties with spare rooms

If you own a property you can rent out a spare bedroom to a lodger and the first £4250 per year is tax-free.  So firstly compare that to a social tenant who is only allowed £1040 per year tax-free and then gets an effective 85% tax rate! Secondly, the 6,932,909 householders who could each get a further £4250 per year tax-free are missing out on £29.46 BILLION per year in this tax-free scheme.

So we see the politically revered homeowners missing out on £28.86 billion..you know the same role models all tenants should and must aspire to replicate!  I can feel the moral indignation coming out of the Tories at that suggestion.  I’m not having a pleb as a lodger, I bought my house to be as far away from them as possible!!  But hang on don’t we have a national crisis and a chronic shortage of homes for people to live in?  Oh I see so they can only go and live with other plebs then and even a £28bn per year incentive is not enough! Ah I see now.  Yes that would stop them building new houses for the plebs on England’s green and pleasant land wouldn’t it!!

Sorry read I’m digressing again aren’t I?

Spare bedroom cost?

Back on topic now and the bedroom tax will save £480m per year so it’s for the good of the country in these austere times isn’t it and only fair? (KLAXON, KLAXON, KLAXON!!)

Has anyone actually looked at this claim with any degree of circumspect?  Of course not its just like the 1m spare bedrooms in social housing bullshit claim. I looked at it briefly and discussed it here and 660,000 at an average £14 per week is when you crunch the numbers £482m per year.  So this means the government don’t see any additional cost the bedroom tax will create at all else the additional cost of for example homelessness it directly creates would have to be deducted from the £480m figure.

The bedroom tax WONT in the government’s view create:

• ANY homelessness costs
• ANY increased policing costs (think of upsurge in domestic violence this shortage of money will create and how much does each DV case cost the public purse?)
• ANY increased NHS cost (again think of DV costs as above or even cost of treating malnutrition!!)
• ANY other local authority cost (as in homelessness applications to be assessed or welfare advice or social services costs etc)

In fact the government would have us believe the bedroom tax wont create ANY additional public purse cost at all !!!  The bedroom will only save money and not create any other public purse cost!!!

The link to DV cost to the public purse puts this at £5.5bn per year so if DV cases go up by 5% because of the bedroom tax then this adds £275m per year to public purse costs.  But of course I am speculating and of course couples don’t argue about money do they….er!! (Wait till UC moves benefit payments to monthly!!!)

I use the DV example above as just one of many examples where the bedroom tax cut will obviously impact and to show that the alleged impact assessment which all governments do and correctly so before proposing a policy is total bullshit!  In fact that same alleged impact assessment  on the bedroom tax says on its final page that:

DWP intend to undertake independent monitoring and evaluation to assess the impact of the introduction of size criteria in the social rented sector as outlined during the passage of the Welfare Reform Act. DWP expect the research to be undertaken over a two year period from 2013/14, with preparatory work starting in 2012/13 with initial findings being available in early 2013 The research methodology and scope will be finalised in consultation with contractors once the initial commissioning work has been completed. DWP currently envisage that the evaluation will include a range of social landlords and local authorities across England, Scotland and Wales. Different types of authorities including a range of urban, rural and county district local authorities will be included and these will be selected to cover a range of different housing market demands, to ensure DWP can explore the effects of the introduction of size criteria effectively, and gain sound insight into the experiences of tenants of various age groups, those with a disability, their gender and ethnicity.

Read that any way you like but it means one thing.  The government has NOT done an impact assessment!

The government does not know the impact the bedroom tax will have on gender, ethnicity and disability yet they boldly assert it WILL save £480m per year (a figure they have revised upwards to £505m by the way!)

If they don’t know what the impact will be how the hell can they be so certain it WILL save any money at all?

The other reason for mentioning the DV point was much discussion has been made as to the effect or impact or consequence of the bedroom tax on disability. Some, but a lot less on ethnicity, but largely limited to the overall benefit cap and its impact on large families as BME groups tend to have larger families.  Yet there is scant discussion of the bedroom tax impact on gender such as domestic violence and abuse.

The bedroom tax will have massive gender consequences and these need to be looked at and addressed.

So why hasn’t Women’s Aid or other DV lobbies raised this?  Why haven’t other female lobbies raised this likely consequence?  It would appear the gender lobbies like the older persons lobbies like the social landlord and like the Labour Party has not yet seen these issues!  Come on people this is woeful!

Bedroom Tax – the 2.9 bed house revisited – Why it needs much more consideration than wait and see!

I previously discussed the social housing rental of a 2.9 bed house and here I add something to that in light of comments received to clarify for the avoidance of doubt some issues and also in light of developments such as KHT reclassifying some properties downwards – ie from a 3 bed to a 2 bed.

The 2.9 bed house

If a current 3 ‘bed’ house has the smallest bedroom measuring 9ft x 7ft it measures 63 square feet and as regulation and housing law states a single bedroom – that is a 1.0 bedroom – has to be 70 square feet (see below for legal opinion on this) then a 9 x 7 ‘room’ is accurately 0.9 of a bedroom.  Hence the 2.9 bed house..

The ‘accurately’ bit is important as the A4/2012 says social landlords should describe the property ‘accurately’ for bedroom tax purposes and in terms of rent charged.  So if the social landlord tells the local council a property is a 2.9 bed house and not a 3 then the bedroom tax could be avoided as the regulations say it has to be one (1.0) bedroom above the occupancy and not 1.0 room.

What that leaves out is the ‘accurate’ description for rent charged which I now address.

Knowsley Housing Trust (KHT) a social landlord recently announced it has reclassified 566 properties down – say from 3 bed to 2 bed or 3.0 bed to 2.0 bed properties – and as a result is reducing and taking a hit of £250k per year in rent.  If you divide £250k per year by 566 properties this become £8.47 per week.  What this means is the rent difference between a 2 bed and a 3 bed is £8.47 per week but here to make the numbers easier I will assume a £10 per week difference to make the argument easier. So, for example a 2 bed rent is £80pw and a 3 bed is £90pw

NB – in the KHT example the £8.47 per week loss of rent by downgrading the property size is less of a reduction that the 14% bedroom tax deduction of £11 – 12 yet as it takes the 566 tenants out of the bedroom tax can be seen as reducing the financial risk to arrears.

2 bed @ £80 pw and 3 bed @ £90pw example

If the social landlord accurately describes the now ‘3 bed’ house as a 2.9 bed house then the existing rent of £90pw reduces to £89 per week so the rent charged accurately reflects the size.

1. The tenant sees a £1 per week reduction in rent and avoids the bedroom tax of £12.60 per week (14% of £90)
2. The landlord reduces its income by £1 per week – a 1.1% reduction from £90 to £89pw.
3. The landlord by taking £1 per week less avoids a potential £12.60 per week arrear
4. The landlord can in monetary terms easily get back this £1 per week loss by maximising its rent increase, which in any case it has to do because of the increased risk to arrears the bedroom tax (and other welfare reforms) pose to arrears.

The above makes perfect financial sense for both the social tenant and the social landlord.  We know 81% of likely bedroom tax recipients under occupy by 1 bedroom and so is ALL smallest bedrooms were 63 square feet then 535.000 or so of the 660,000 bedroom tax affected would no longer be affected and the arrears risk the bedroom tax poses to social tenant and social landlord would dramatically reduce.

Yet of course this can only happen IF the smallest room is less than 70 square feet.

That is what we don’t know – Just how many of the smallest bedrooms are less than 70 square feet?  Yet that is easily sorted by the tenant measuring the smallest ‘bedroom’ and informing the landlord and then the rent is recalculated to reflect this and in the above example becoming £89 pw rather than £90 pw.  Similarly if the bedroom is 67.2 square feet (0.96) then the rent becomes £89.60 per week a £0.40p per week reduction yet still avoids the bedroom tax.

Yes this will involve some admin cost for the landlord but it is a much lower cost than potentially losing 14% or 25% through the bedroom tax deductions.  Even if the tenancy agreement needs to be varied by a deed of variation to go from a 3 bed property to a 2.9 bed property the added cost of this is still going to be less than the bedroom tax deduction risk to arrears.

in the KHT example as I stated instead of the rent reduction per property being £8.47 per property per week it would have been 84.7 pence per property per week if the 2.9 bedroom option was taken.

Fairness?

Yes – The above very accurately describes each property.  Why should a social tenant with 2 large bedrooms pay the same as another who has 2 small ones?  Why in the KHT example should a tenant with 2 bedrooms and a boxroom pay the same rent as another tenant with 2 bedrooms only?  The rent level should accurately reflect that in all terms of fairness.

NB – The above can also reduce a 25% bedroom tax reduction to a 14% reduction .

More importantly, a proposal like the above would conform to the bedroom tax guidance as it would accurately describe both the property size and accurately readjust the rent level charged on a much fairer basis.

It would allow the social tenant and the social landlord to have surety that the bedroom tax does not massively disrupt the business and family life and all the other pernicious consequences we now all know through the awareness of the human interest stories that have been all over the TV and other media.

Ironically, it would also conform to Lord Freud’s assertion that social landlords will reclassify smartly.  It would also satisfy financial investors in social housing who would see that the social landlord has acted smartly and I can’t see financial covenants being put at risk with this proposal. It would avoid legal costs for social landlords too as I can envisage there being drawn into legal actions for their role in saying a property is a 3 bed and not a 2.9 bed.

Overall such a simple idea minimises the massive financial risks social landlords face with the bedroom tax.  Adopting such a plan would be warmly welcomed by their tenants and I need not state the risk social landlords face from disaffected tenants when direct payment of HB comes in

The 70 square feet issue?

Govan Law Centre sought a barrister opinion on what is a bedroom and that can be accessed here.  It said: –

“It is relevant, also, that the space standard of the Housing(Scotland) Act 1987, section 137 (3) and the Housing Act 1985, section 326 (3), excludes from consideration rooms of less than 50 square feet (which is 4.64 square metres) and classes rooms between that and 70 square feet (6.5 square metres) as only, in effect, half a bedroom.“

The 1985 Housing Act section 326 (see here) says: –

TABLE II

Floor area of room Number of persons

110 sq. ft. or more                                     = 2 persons

90 sq. ft. or more but less than 110 sq. ft.    = 1.5  persons

70 sq. ft. or more but less than 90 sq. ft.      = 1 person

50 sq. ft. or more but less than 70 sq. ft.      = 0.5 a person

One of the counterarguments to my view has been said there is no statutory notion of a percentage room and so this is all semantics.  The above section 326 of the 1985 Housing Act disproves that as it says a room 50 – 69 square feet is for 0.5 of a person. 0.5 is a percentage not that there is half a person in any lay semblance of that term of course.

So if the 2.9 bed house is in fact and can only be a 2.5 bed house as 0.5 is the ONLY percentage allowable in statute (which I don’t accept) then my point about the bedroom tax only being applicable where it is under occupied by one – that is 1.0  – bedroom, and not one ‘room’ – which is precisely what the A4/2012 says – means that the tenant is NOT subject to the bedroom tax.

The A4/2012 importantly does not say a claimant is underoccupying by a number of persons, either whole or a percentage or fraction the half or 0.5 of a person, its says by one BEDROOM and that is the only guidance local HB officers can use in determining whether the bedroom tax applies.

Has the claimant got more than one bedroom is the ONLY guidance that HB decision-makers have to follow and the definition of a bedroom the A4/2012 guidance says at 12 is “up to the landlord” to define.

Hence is a landlord says the property is 2.9 bedrooms then the HB officer has three choices.  They can (a) simply accept the social landlords word as they do now, or (b) they can send out a Rent Officer to determine as they do with private sector LHA cases; or (c) they can ignore.

If (a) they do exactly what the current situation is.

If (b) they incur cost yet do treat social tenancies for HB purposes in the same way they treat private sector claimants for LHA purposes which is the stated intention of the coalition

If (c) they ignore the social landlord definition are they (i) breaching the guidance and so (ii) acting in an ultra vires capacity and (iii) guilty of maladministration? In my view all three and so this option is NOT available.

Hence they either accept the revised definition of the landlord who is after all only following the official guidance in accurately defining the property as a 2.9 bed or they incur cost and get the independent VOA rent officer out to make a determination.

Yet I have hears tha the VOA Rent Officers are being disbanded.  So if this is the case the HB officer can only choose option (a) and accept the social landlords definition.

This is not a case of semantics at all and I am confident a housing lawyer or even a tenant at a HB appeal can articulate this same argument much better than I have simplified this above.

Of course this is just my opinion and one comment today was lets just agree to disagree and see what happens in 6 weeks time.  I understand those sentiments but strongly suggest a social landlord cannot do this else they may be viewed as being complicit in the bedroom tax.  Briefly it such a challenge does go ahead, which it undoubtedly will, and the tenant wins and the concept of the 2.9 bedroom is upheld then tenants will perhaps rightly say why the hell didn’t my landlord look at this? They have had 18 months to look at this and did nothing!

Even the fact that social landlords can’t do anything until a bedroom tax decision lands on the tenant mat is no excuse in my view. Given the huge potential arrears loss the bedroom tax holds for social landlords just why havent they considered such a challenge to date becomes the question.  Why are they not ready to hit the ground running with this in April, just 6 weeks time? The consequences of not being ready to hit the ground running WILL be tenants will feel disaffected and will pay less of their rent when direct payment hits – the social landlord cannot afford to say lets wait and see.

In summary, when I first raised the 2.9 bedroom argument it was a tiny argument in my view and I too was under the impression – a lazy assumption  – that you can’t have 0.9 of a bedroom and despite being aware that statute does allow the concept of half a person which is even more ridiculous.  Yet a 10 minute consideration of it reveals it is much more than a throwaway argument AND is in the best interests of social landlord and social tenant.  Every legal person I have spoken with or read is anticipating a huge challenge in terms of bedroom size and what is a bedroom.  The fact it could mitigate the impact of the bedroom tax so greatly for both landlord and tenant deserves a hell of a lot more than let’s wait and see!

PS – and just to put my criticisms of social landlords apparent tardiness in challenging the bedroom tax into context I see the Labour Party set up an anti bedroom tax campaign…. yesterday! Yes 19 February 2013!  Presumably they have spent 18 months discussing the health and safety aspects of jumping on a bandwagon?