Are social landlords complicit in the bedroom tax?

The welfare agenda of the current government represents a massive cultural shift for social housing:  A huge shift in risk that if social landlords fail to recognise and embrace threatens their survival. The change really is that profound to the ‘way we have always done things’ that focussing on the bedroom tax or direct payments or other change or set of challenges that tweaks the current model is simply not enough.  Social landlords need to have a complete cultural shift in the way they do business

Social landlords need to look at supported housing to understand and be ready for the welfare changes ahead. Yet many social landlords won’t even understand what that means or equate sheltered housing with supported housing.  They are not the same thing at all. To simplify people enter sheltered housing simply by age criteria and many who do don’t need support at all, at least not initially.  Supported housing by contrast requires a support need to access – think of domestic violence, homelessness, mental health or other support need – and you see the point

To explain supported housing is the less than 5% of rented housing that has always put the ‘social’ into social housing.  It deals with people in other words whereas the other 95% of the social rented sector is your common or garden rented mainstream property, council or housing association run, that has always been about ‘bricks and mortar.’

Yet the welfare reform agenda with its bedroom tax, direct payments, the overall benefit cap and other welfare changes are all about ‘people’ and not bricks and mortar.  The welfare reform agenda is therefore a cultural change in social housing and this key dynamic has yet to be understood by social landlords.

The bedroom tax and direct payment issues see people getting less money which may then lead to less being paid for the bricks and mortar.  It holds that risk or potential risk and the overall benefit cap is the same as are the changes to local council tax benefit systems.  Note too at this point that as the welfare changes do not affect those of non-working age that sheltered housing is largely immune to the changes ahead.

Risk is and always has been viewed as a much higher priority in supported housing than mainstream housing.  For example NIMBY client groups hold a far higher risk to immediate neighbours and the neighbourhood, risk to tenancy, risk to arrears, risk to self and others but the most important risk in supported housing now becomes the most important risk to mainstream housing with the welfare changes – the risk to organisation reputation.

Reputational risk is THE key risk in supported housing and always has been.  The old adage of it taking 20 years to build up a good one and then 5 minutes to lose it and get a bad one is a constant issue in supported housing.  The depth of experience in this issue alone is vast and mainstream social landlords need to tap into it.  One bad apple in a local homeless hostel, and all there are also ‘undeserving’ in the public psyche, and that hostel and its landlord gets blamed for all societal ills and especially all local ones.  Mainstream housing by comparison tends not to view reputational risk with the same priority or urgency until now as ‘bad apple’ tenants tend to be isolated and the exception rather than the norm.  Yet that needs to change and will change with the welfare changes.

Welfare changes such as direct payments change the sphere of control and control will lie with the tenant, that is the person, and not with the system or model or the bricks and mortar.

Risk, whether that is to reputation or arrears, can never be eradicated but only mitigated or reduced through control actions or controlling ‘hazards.’  What the welfare changes do is increase these ‘hazards’ and especially with tenant dissatisfaction issues.

So now when we see social landlords being blamed for the hated bedroom tax rather than government this becomes one such ‘hazard’ that social landlords need to control and can control but are not. If they don’t control this then the risk to arrears increases which is obvious and well known but also the risk to reputation increases massively which further increase the risk to arrears to social landlords.

Bedroom Tax – Over a year ago I argued that landlords could get (wrongly) blamed for the bedroom tax due to the parts they play in the process of determining who gets hit by the bedroom tax.  At that time this was no more than a theory of mine or hypothesis and simply a recognition and flagging up of a potential risk.  Then in August last year this became more than a theory and more of a reputational risk when I looked at what is a bedroom and not only is there no definition, the government are deliberately not defining it – a very clever but sneaky political manoeuvre as this passes this risk to social landlords.  Just how the hell can you have a ‘bedroom’ tax when there is no definition of what a bedroom is?  Is a bedroom really a boxroom?

These and more rhetorical questions I raised and all of these questions confirmed the increasing the social landlord’s reputational risk  and now evidence is coming thick and fast  that social tenants are blaming social landlords for the bedroom tax as are many non-tenants who are politically active are also doing the same.

[Note: Google search today has 132m results for ‘bedroom tax’ and how many recently say tenants still dont know what it is and the full implications of it? I’ve read at least 20 articles in the past month!]

This is not only disturbing for social landlords it is a huge increase in reputational risk and threatens to widen the divide that has always existed between tenant and landlord (over tenant participation, involvement etc) and now this is combined with direct payments which passes control of rent payments from landlords to tenants, a distinctly unhealthy combination for social landlords and from this even more reputational risks abound.

Some detail to explain.  This week I received out of the blue an email from a London council tenant that came from my blog post in August over what is a bedroom.

It said she and her 3 children lived in a 3 bed ‘parlour’ house and the council has determined that the property is a 4 bed house and so she will be hit by the bedroom tax.  Yet her secure tenancy agreement says it is a 3 bed property.  So what the council has done here is decide she lives not in a 3 bed but a 4 bed and the fact the council, the social landlord, has decided this reveals the reputational risk and is the key point.

Yes there are legal challenges to this situation and how can any social landlord redefine a property upwards from 3 to 4 beds without changing the legal document that the tenancy is a pertinent question.  However, the fact that the social landlord DECIDED to do this is the REAL issue as because of this the social landlord gets the blame (and rightly so) in this case.

Yesterday I received a tweet about a Facebook bedroom tax group with thousands of members.  So I posted this situation and asked how common this was.  I was inundated and these ‘parlour’ houses (2 living rooms essentially) cropped up again and again as did the social landlords redefining them to one bedroom more for bedroom tax purposes.

What this says to tenants is that social landlords are complicit in the bedroom tax!

What this says to me is that these social landlords are bloody idiots!  More tactfully by doing this the social landlord appears complicit in the bedroom tax and they are massively increasing their reputational risk – the same risk element in comparison to supported housing they have always reduced in priority.  Yet now they cannot do this and need to look at supported housing to see how they can better manage this reputational risk.

One comment was why don’t social landlords simply downsize all properties and so take away the bedroom tax for tenants.  Yes we know that paper exercise can’t happen and would have disastrous financial consequences for social landlords.  But that is not the point.  The fact tenants have not been informed of why this can’t happen is the point.  It shows tenant ignorance of housing finance but it also shows that social landlords haven’t got that simple message across to tenants and thereby increases the risk that social landlords are blamed for the bedroom tax!  Tenant information campaigns by social landlords need to include this obvious issue and need to be comprehensive: if they are not then social landlords run a higher reputational risk.

More bluntly social landlords need to walk a mile in a tenant’s shoes and take an empathic approach to mitigate the reputational risk and this is something within their control.  Once direct payments kick in the tenant who has (wrongly or rightly) a perception that the landlord is costing them money will de-prioritise paying their rent and especially in the context of benefits or wages rising less than inflation, less than utilities, less than expected massive food increases this year and yes less than rents increases.  The tenant having control by getting HB direct is a huge change and not just one of control about when and how much to pay.  It is about perceptions and reputational risk.

How many tenants rush to discussion sites such as Inside Housing and rant about SRS CEO’s pay?  Or bemoan that tenant ‘consultation’ is we have read what you have said but we are still going ahead with what we planned?  Social landlords can no longer say, as they do in private, that tenants have far too high expectations of what tenant involvement means and believe they should run the company.  Social landlords can no longer say that anti-social behaviour is a long slow drawn-out process and they can’t be blamed for it taking two years to evict someone who is then housed next door in a private let.  It is precisely these issues which the welfare changes change.  Tenant perceptions now will play a much bigger role in social housing operations and strategy and they are all reputational risk issues.

I could go on with many more examples.  Yet it comes down to this.  Until April this year social landlords have the opportunity to let their tenants know they are not complicit in the bedroom tax and to inform tenants what the real and full issues are.  That is still in social landlords control at least until April. If they don’t do that they will see a far higher increase in arrears than expected because of the reputational risk of the bedroom tax and direct payments.  If they don’t do that then they have no chance whatsoever of getting tenants onside with the biggest financial threats to tenants of Universal Credit and the Overall Benefit Cap to come later this year and by that time social landlords will have become the tenant enemy.

Social landlords need to turn to supported housing departments or managing agents and ask their advice on reputational risk, after all it is often their biggest and most constant issue they face and they have years of experience of dealing with people and their perceptions.

They are not ‘bricks and mortar’ organisations as mainstream social housing is, they deal with people and understand and empathise with people first and foremost.

It is only when social landlords understand the needs of tenants or customers or call them what you will as at the end of the day they are PEOPLE that reputational risk issues are overcome…and yes that means less arrears to the bottom line.  So to all the seemingly smug policy strategists and PR departments in large mainstream social landlords you haven’t done enough on the bedroom tax despite your PR and glossy leaflets and web pages (that often omit other relevant factors such as OBC and present even bigger risks to reputation) you need to do so much more and do it quickly.  For once have an open mind and don’t think of supported housing as that pain in the backside tiny niche area of social housing that is bloody complicated and full of bleeding heart liberals who cannot tell the mainstream social housing ‘professional’ anything at all.

They know people and it’s about time you did!

As usual social housing leave everything to the last minute.  The “You what it changes in April, ok lets look at that in January” approach.  For once this hasn’t happened and plans have been in place for 12 months or more, yet those plans have been inept and haven’t seen the wood from the trees.  They have come from the usual social landlord perspective of bottom line financial bricks and mortar change – the usual priority – yet that priority has to change and so does the approach.  The welfare changes are about people not about bricks and mortar.  And while you revise your approach tell your tenants, sorry customers, sorry PEOPLE about the overall benefit cap and Univeral Credit too, oh and the council tax changes too and……etc – they are people issues as well!

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