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27/12/13 00:01

Bedroom tax ‘costing more than saving’

Housing and Welfare Minister has requested a meeting with the UK Government.

The bedroom tax and benefit sanctions are disproportionately affecting Scotland’s most vulnerable citizens, Housing and Welfare Minister Margaret Burgess said in a letter to the UK Government.

Mrs Burgess has requested an urgent meeting with the UK Government Minister for Welfare Reform, Lord Freud, to discuss her concerns around the impacts of benefit sanctions and bedroom tax.

The Housing and Welfare Minister hit out at the bedroom tax and highlighted COSLA’s latest estimate which found the annual costs of implementing the penalty exceed the savings by £10 million.

To ease the effects of welfare reforms the Scottish Government has provided local authorities with additional funding to increase the amount available for Discretionary Housing Payments. It was announced in October that an extra £20 million would be allocated by the Scottish Government in 2014/2015 to help those struggling with the bedroom tax.

Mrs Burgess said:

“When it comes to the bedroom tax it’s clear the policy is costing more than it is saving in Scotland. The apparent savings to the Department for Work and Pensions are simply because the costs are being pushed onto other stakeholders.

“There was no justification in introducing the bedroom tax to reduce housing benefit expenditure in the Scottish social rented sector especially when you see the financial and social costs borne by some of our most vulnerable households. It’s also clear to see there is no legitimate economic and social case for its imposition.

“Local authorities, Citizens Advice Bureaux and other advisory groups have all reported an increase in callers who have seen their benefits reduced or withdrawn. Foodbanks in Scotland have named benefit delays and changes, including sanctions, as major factors in the increasing demand for their services.

“This current sanctions regime is unnecessarily harsh and there’s little evidence that the penalties will have a positive long-term effect for individuals. I do not believe the UK Government has fully considered the implications of such punitive actions against the most vulnerable.”

Notes to editors

The analysis of potential impacts of benefit sanctions is available at: http://www.scotland.gov.uk/Topics/People/welfarereform/analysis/analysisonsanctions

Jobseeker’s Allowance statistics published by DWP are available at: https://www.gov.uk/government/publications/jobseekers-allowance-and-employment-and-support-allowance-sanctions-decisions-made-to-june-2013

COSLA’s latest estimate is that the annual costs of implementing this penalty will be around £60 million, due to the cost of Discretionary Housing Payments (DHPs), increased rent arrears, additional administrative costs, and the increased burden on advice and support services. This compares with approximately £50 million of savings to the DWP if the penalty were to be applied in all cases in Scotland. COSLA’s press release is available at: http://www.cosla.gov.uk/news/2013/11/bedroom-tax-costing-more-it-will-save

Scottish Government analysis also shows that, despite the impact of the economic recession, the ratio of housing benefit expenditure to GDP in the Scottish social rented sector was significantly lower in 2011/12 than it was in 1997/98, demonstrating that housing benefit expenditure has remained affordable in Scotland.

Analysis of long-run trends in the affordability of housing benefit expenditure in Scotland is available at:

http://www.scotland.gov.uk/Topics/Built-Environment/Housing/supply-demand/chma/Benefitchanges/affordabilityofhousingbenefit