Riverside says concerns over reforms aren't going away

Published by Brian Church for 24dash.com in Housing and also in Communities

The Riverside Group has called on the Government to take a “sensible” line on the bedroom tax and said it remains “very concerned about the impact of benefit cuts on our tenants and the business.”

In a position statement released Tuesday, the Liverpool-based giant said the bedroom tax will affect 7,000 Riverside tenants at an annual cost to them of £5m.

Riverside, which owns and manages more than 51,000 homes, called for clarity over the issue of Direct Payments of housing related benefits to claimants.

“Changes are now less than a year away and if direct payments are going to come in, we need time to set up systems, inform tenants and train staff, amongst other things. There is a lack of evidence about how effective the six direct payments demonstration projects are, with early feedback indicating escalating arrears and the need for intensive and expensive support.”

Reiterating the sector-wide view, Riverside said “we see no reason why tenants should not have the choice to be able to opt for payments to their landlords as part of a sensible money management strategy.”

Riverside noted: “There is likely to be a mechanism within UC (Universal Credit) to facilitate the payment of benefit direct to the landlord (for a short period of time) once someone is identified as’ vulnerable’. However, ministers are yet to define this ‘vulnerable’ category. We are asking that the Government ensure the definition is drawn both clearly and broadly, including residents with problematic credit and debt problems (to avoid escalating arrears), as well as those with health problems, literacy issues or a disability that may make money management difficult.”

On sheltered and supported housing, Riverside said: “In the UC regulations there are significant changes to the definition of services which are eligible to be met by the housing element of UC when it is introduced. Whilst the Government has moved from its initial position, and the sector’s concerns have been listened to, it is important that guidance on eligibility remains flexible rather than attempting to set out exhaustive lists of services.”

On under-occupation, Riverside called for common sense to prevail.

The group said: “Within the bedroom tax, there is a lack of distinction between a bedroom capable of being occupied by one person or two people. This means that people occupying certain property types are particularly vulnerable to having benefits reduced when they do not physically under-occupy their home, because of the technical definition of under-occupation that will be used by the Department for Work and Pensions (DWP), e.g. four-person families living in smaller three-bedroomed houses. Therefore, we are asking the government for sufficient flexibility in the guidance to administering authorities to take a sensible line and not apply the bedroom tax where there is clearly no physical under-occupation.”

It also said lessons needed to be learnt quickly if anything unexpected happened. The report said: “We are also calling for a rigorous evaluation of the impact of the bedroom tax (which Government has promised), with a brief wide enough to look at the indirect housing policy consequences and financial implications of the policy.”

On Discretionary Housing Payments, the report said “there is likely to be an over-reliance on Discretionary Housing Payments (DHPs) to meet future shortfalls in housing benefit, particularly for those living in adapted properties (and who are under-occupying) where a downsizing move would make little economic sense. Whilst £30m additional DHP funding has been made available, this amounts to around £100,000 a year for each Local Authority (LA) which will be spread very thinly. We are concerned that DHP is not fit for purpose for anything other than short-term assistance.”

Riverside also sounded a note of caution over future threats beyond the imminent changes.

“Whilst significant, the Chancellor has identified only around £4bn of savings from the £10bn likely to be required. There could be other cuts on the way. Riverside’s biggest concern is still the possible ‘de-coupling’ of housing benefit/housing element of UC from actual rents for social housing, and pegging increases to CPI or even Average Earnings. Our own calculations show that over a five year period, pegging rent increases to CPI (as opposed to RPI + ½%) would result in a loss of nearly £39m to the business. This seriously undermines our capacity to build much needed homes, and could threaten the credit rating of housing associations across the board.”