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Welfare Reform – one year on Matthew Warburton - 04/04/2014

Bedroom_tax_300This week marks the anniversary of the introduction of the under-occupation charge or bedroom tax. What has been its impact on councils and tenants so far, and what are the prospects for the future? Together with an examination of benefit caps and the roll-out of Universal Credit, this will be the topic of ARCH's next free seminar for member councils, to be held in Birmingham on 19 May.


Early analyses suggest that fewer claimants have been affected by the under-occupation charge than had been expected - 498,000 in November 2013 rather than the 660,000 predicted by the DWP. It is also clear that the proportion of tenants affected has been greater in some regions than others, with 78,836 affected in the North West compared with little over 52,000 in London. 


Evidence of the impact on rent payment is mixed, with Inside Housing running stories in successive weeks, one reporting a surge in arrears on Merseyside, the next including findings from a survey of 40 social landlords by auditor Baker Tilley showing that only half had seen an increase in arrears. Many councils have used discretionary housing payments to mitigate the impact of the withdrawal of benefit, but here again, news stories reporting that DHP allocations are inadequate to match the scale of need are matched by reports of councils underspending their allocations.


There is some evidence that more tenants than expected have so far managed to meet their benefit shortfall from their own resources, although it is doubtful how long they will be able to sustain this. Another important point is that the roll-out of Universal Credit has been slower than expected, with only 3,780 so far claiming the new benefit.


Together with the National Federation of ALMOs and Councils with ALMOs Group, ARCH has surveyed member councils to get a better picture of the impact to date.  A quick reminder to any council which has not so far replied - today is the final date for responses! Results of the survey will be available to inform discussion at the seminar on 19 May.


Looking ahead, the Liberal Democrats seem poised to go into the next General Election proposing to scrap the bedroom tax for all but those who refuse a reasonable offer of alternative accommodation. Labour is already committed to scrap it. The Conservatives' overriding focus on cutting the fiscal deficit commits them to a further wave of benefit reforms, but they have not yet declared where the axe will fall. Perhaps matters will be clearer by May.

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