In this paper I probably cut my own throat by outlining that social landlords, many of whom are my clients and pay me for my advice which puts food on my table, DONT want the social tenant to appeal the bedroom tax.
Yet that is how strongly I feel about just how unjust the bedroom tax is and I can always go stack shelves at Tesco or even set up a union just for tenants perhaps?
A tenant appealing the bedroom tax decision also frightens the hell out of the government as all tenants have a legal right to appeal a benefit decision and if they do it brings huge unwanted attention to the bedroom tax policy itself and helps to bring about its demise.
The tenant appealing the bedroom tax decision also frightens the hell out of local councils as it will cost them multi millions to defend the initial decision as the tribunal.
The social landlord angle – that they DONT want the tenant to appeal which I argue here – has never been looked at or discussed in any depth and here I merely touch on it, though that I suspect will be enough to see social landlords continuing to engage my services.
Why do I say the social landlord doesn’t want the tenant to appeal?
The short answer is it may expose social landlords to be the biggest welfare benefit fraudsters in history! Please note well I said it MAY expose and not will expose and as I go on to qualify below they don’t want the social tenant to appeal on grounds of the bedroom size issues.
The reason for this is the size of an alleged ‘bedroom.’ IF (a) anything under 50 square feet is not a bedroom; and/or (b) anything between 50 and 70 square feet is potentially or in effect half a bedroom as a QC has argued, then the social landlord MAY have been overcharging tenants and of course been overcharging Housing Benefit for years.
I don’t hold with the typical social landlord view that if a now designated 3 bedroomed property is determined to be a 2 bedroom and boxroom property after an appeal that this will mean the rent level charged and the HB they receive will fall from a 3 bed rent to a 2 bed rent. I fully understand social landlords huge financial worries over this of course as it would INEVITABLY see many social landlords go bust. It really is a massive financial issue and I don’t underestimate its significance one bit.
However, just allowing that possibility to emerge from an appeal to the bedroom tax decision is one obvious reason why the social landlord does not want the social tenant to appeal on bedroom size grounds. Every person involved in or cognisant of social housing has seen that danger, that huge danger and unacceptable level of financial danger and risk, it is just nobody has discussed it publicly.
Just to put a figure on what that risk maybe imagine that 40% of the 3.8m social housing properties or about 1.5 million properties that have a 3 bed rent level were ‘downsized’ to a 2 bed rent level. Say the difference is £10 pw between the 2 and 3 bed level and this would see a £15m per week income loss for the social landlords or a £780m per year loss of income!! Ok you get the picture that this is a huge financial risk that the social landlords are exposed to if the social tenant appeals on the bedroom size issues.
In that light it is understandable and only to be expected that the huge number of social landlord comment has emerged saying that the bedroom size issue is a non-issue and a misreading of the 1985 Housing Act space and room standards. The social landlords may well be right in their view or…oh shit…they may not be, and a court may decide the 1985 Act does apply. It is a genuine nightmare scenario.
YET this first nightmare is entirely dependent on the basis that the local council HB department would reduce the 3 bed rent to a 2 bed rent and have the power to do that. Has any social landlord received legal advice on that specific issue I wonder? Or is it just an assumption made by the justifiably worried social landlord?
Another justifiable worry and second nightmare scenario is that the landlord would have to ‘reclassify’ the former 3 bed property to a 2 bed property? But would they? They don’t want to for obvious reasons as the sale or asset value of something ‘termed’ or labelled’ a 3 bed property is higher than one called a 2 bed property. This has huge implications again for the social landlord’s survival yet is it merely an (understandable) assumption again?
More importantly I can not see this happening as it would mean that 10 million or more homeowners who thought they had bought a 3 bed house would discover it is only a 2 bed and a boxroom and billions of pounds worth of assets would be wiped off the general publics assets. Ergo electoral suicide and financial meltdown for any government which would suggest this! That is why the coalition is refusing to define a bedroom legally (though imagine all those claims against estate agents!! Well never mind eh!)
Scratch under the surface of the social landlords who have reclassified down their properties or say they are looking at doing so and a different story appears. KHT in Knowsley and Leeds and Nottingham all have or say they will reclassify a certain number of properties. Yet it transpires these are all high-rise or other undesirable properties in any case ahead of the bedroom tax – the difficult to let property or DTL. The reclassification is merely a device to make them more appealing (no pun intended) for tenants to move into as the bedroom tax will likely NOT apply.
In economic terms why not suffer a £8 or £10 per week financial hit by reducing the rent rather than suffer a £14 per week hit with the bedroom tax on these undesirable DTLs is what this is all about and in that light makes financial sense for the social landlord. It is better for them to get less income on the DTL than no income at all! That logic is behind this and when you consider KHT who were the first to do this only ‘downsized’ or reclassified 566 out of 14000+ properties this is a mere 4% of all properties.
The £780m potential yearly hit I outlined above and working on the basis that about two-thirds of social tenants get HB may mean that social landlords have been claiming £500m or so per year too much from the public purse – they become the biggest benefit fraudster in history. Yet this is the same social landlords who charge the public purse in HB £2.17 billion per year LESS than private landlords do for the same number of properties by getting £25 per week or so more in HB for 1.65m properties each week.
In that light and correct context alone just how could HB departments reduce HB payments for each social rented property?
Reader, the social landlord or social rented sector won’t thank me for raising these issues but they are an accurate reflection of the context and why the social landlord does not want the social tenant appealing the bedroom tax decision……on the bedroom size grounds that are apparent and do need to be decided upon by a court.
Pandora’s box is well and truly open and I anticipate the social landlord and their lobbies will start seeking to advise the social tenant not to appeal for some other alleged ‘reasons’ such as a mass appeal takes away from the ‘genuine’ cases or some other such nonsense. The real reason these may appear as I suspect they will is because the social landlord and the social rented sector are running scared of the social tenant appealing in large numbers.
To me that is the social landlord in effect saying to the social tenant shut up and take the hit and that is just not acceptable is it?