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In physics the conservation principle dictates that in closed systems, energy can neither be created or destroyed, but only turned from one form to another. New research from the Joseph Rowntree Foundation examining recent welfare reforms suggest that a similar law applies to housing support costs.
Applying size limits to social tenants – better known as the spare room subsidy or ‘bedroom tax’ – aimed to do three things. Reduce costs; ease overcrowding and introduce greater fairness into the system. Specifically, if you were a social tenant with extra space that you didn’t strictly need you should pay for the advantage like all other people with housing costs.
On costs the initial results are mixed. Likely savings to DWP are estimated to be £115 million below the initial target in the first year. Additionally councils are making full use of discretionary housing payments to help tenants adjust to the new policy. The effects of these are limited however, and there is evidence of inconsistent application, with many families falling into debt, cutting back on food and selling belongings.
Social landlords too are under increased pressure, incurring additional costs to cover rent arrears and provide welfare support. Having to focus on existing stock and tenants in this way potentially limits their scope to boost the supply of much needed affordable new homes, building up long term cost pressures as more recipients of housing support are placed in the private rental sector
On overcrowding, 6 per cent of affected households moved in the first six months of the policy. More than a fifth would like to but can’t due to a lack of smaller accommodation. Many others are choosing to stay on for now but will in time have to leave if they aren’t able to cover the shortfalls through earnings or by cutting back on other essentials.
On fairness, things become more complicated. It is hard to argue against the idea that the same rules should apply to everyone. However most social tenants granted a tenancy assumed that as long as they paid their rent they would have a home for life.
Understandably the rule change and the prospect of having to leave has had a destabilising effect on affected households who can’t fill the shortfall. The research we funded supports a number of ideas for better and more sensitive implementation that we hope the Government will consider as part of its promised independent review.
These include permitting an additional bedroom where someone is claiming Disability Living Allowance, making clearer provision for carers and separated parents, tackling the inconsistency in how DHPs are calculated and requiring landlords to offer a suitable alternative before the policy is applied to a household.
Leading Liberal Democrats such as Tim Farron haveindicated their desire to reform the policy, short of outright abolition, in the next Parliament.
As Caron pointed out on these pages yesterday – and with an independent review expected in the autumn – there is now a compelling case for changes. The test for Liberal Democrats now is whether anyone wants to take them up.
The Independent View‘ is a slot on Lib Dem Voice which allows those from beyond the party to contribute to debates we believe are of interest to LDV’s readers. Please email voice@libdemvoice.org if you are interested in contributing.
* Frank Soodeen is Public Affairs Manager at the Joseph Rowntree Foundation
