The bedroom tax according to the coalition is treating the social tenant the same as the private tenant for housing benefit purposes.
So let’s do precisely that and abracadabra the bedroom tax is history!
To explain: social landlords simply rent their social properties through their private arms and their private companies as landlords and this would allow the now social tenant to claim housing benefit at the same and much higher rate that private tenants receive. Problem solved!
Note well this would work even if social housing rent levels did not increase too
Take my home city of Liverpool as an example although it works nationally. We see a private tenant can receive £92 per week for a 1 bed housing need even if they live in a 3 bed house in the private sector and £92 per week would cover rent on the overwhelming majority of 3 bed social rented properties in the city. – The bedroom tax is negated for landlord and tenant
A tenant with a 2 bed housing need can receive £109 or so per week if they are a private tenant and this would cover all 3 bed and even 4 bed social housing rents in the city – again the bedroom tax is negated.
The above is hugely simplistic of course and does show that the coalition is talking nonsense when it say the bedroom tax is just leveling the playing field between the social and private rented sectors. Yet it is also possible in law and in practice for this to happen or put another way there is nothing in law or regulations to stop this happening. Many social landlords already have private sector arms or companies in their group so they could simply rent all properties through such arms and not be in breach of any regulations or laws. If they didn’t have a private arm or company they could easily create one. This is not rocket science.
What could the coalition do?
On moral grounds and for equitable purposes nothing. How could they argue this was unfair?
On economic and financial grounds they could threaten the removal of capital subsidy which runs to about £1.2bn per annum to the social rented sector or SRS. Yet social landlords could simply say ok we will increase our rents to private rent levels as we no longer receive subsidy. This would cost the government about £4.6bn MORE per year in Housing Benefit or more specifically LHA as now social rents rise to the LHA rate.
The only government response would be to massively tighten LHA levels which they wont and cant do as private landlords would flee the market leaving the now social landlords in an even stronger economic and financial position.
Social landlords have neutered themselves by not taking such a line yet this is a line they can and could take, and I argue they SHOULD take en masse. This government indeed any government faced with the choice of a £4.5bn per annum increase in welfare spend compared to foregoing the £0.48m alleged saving from the bedroom tax would have to back down and scrap the policy.
Lord Freud infamously said the bedroom tax and other welfare reforms would not damage social landlord finances and the coalition would be monitoring this to ensure social landlords bottom lines were not threatened. Yet they are massively and significantly threatened by the bedroom tax and that is undeniable.
Yet social landlords are a notably conservative bunch or in simple language spineless when it comes to anything radical as this would be (wrongly) perceived. Social landlords are undergoing a very radical attack to social housing itself and their level of challenge to the bedroom tax threat is and has been woeful despite social landlords being in full control of what is in demand and in short supply…properties.
In what other industry or sector would you find the best product at the best price with a huge waiting list being severely threatened by government policy? Yet social housing is not viewed that way though why can only be the failure of the social rented sector to promote its huge economic benefit it has to the country.
The product and service of social housing saves central government and thee taxpayer a bloody fortune compared to the only alternative the private landlord, the same sector that charges the public purse £2.2bn per year more for the same number of properties and inferior properties at that!
So why is the coalition being bloody stupid in attacking the sector that saves it a fortune?
Because politically this coalition does not like social housing and the social housing model. For that matter the Labour Party are hardly enamoured by it either yet economically it saves the taxpayer and public purse a fortune year on year and has done for decades too.
So where is the flaw in the above? Surely such a simple idea cannot work and could be stopped? No and note well that this simple idea only appears to be radical because the SRS is so conservative yet any other industry would use such leverage in lobbying government.
In summary, social landlords are ultra conservative in tendency, they are inept in challenging government of all persuasions and they have always failed to sell the economic benefits of social housing. Anyone think its about time they got their heads out of their backsides? If social landlords spent just 5% of the added cost of rent collection they have had imposed on them by the bedroom tax alone on a marketing campaign extolling the economic savings it realises for the taxpayer and public purse the bedroom tax and any other attack on social housing would be doomed to failure.
It wont happen of course and not because there is anything stopping social landlords from doing it in their articles or ethos and rent levels don’t need to increase at all for this to work and the same social landlords could keep the same form of tenure and not reduce the now social tenant’s security of that tenure. It won’t happen because it can’t happen for any logical reason, the ONLY reason it wont happen is because social landlords don’t have the balls or the inclination to do what any other industry or sector would do and exert the power they have.
There is no need to speculate as to why but the reality is that social landlords are LETTING central government destroy social housing and sitting idly by while they do!