The perfect storm: ‘There will be an almighty crash in the autumn’
Published by Jon Land for 24dash.com in Housing and also in Bill Payments, Universal Credit
The perfect storm: 'There will be an almighty crash in the autumn'
The bedroom tax, the benefit cap, the new council tax regime and a range of other welfare cuts are upon us. Throw in cuts to legal aid, advice services and the state of the UK economy and we’re faced with two powerful weather fronts and a hurricane. Jules Birch (photo) dons his sowester to gauge opinion from organisations trying to navigate choppy waters.
We know something big is coming. Landlords around the country have spent months trying to mitigate the impact and raise awareness among their tenants. In place of George Clooney going down with the ship, we have Iain Duncan Smith and his first mate Lord Freud saying they see no storm and accusing everyone else of scaremongering.
What we still do not know is what the precise impacts will be on tenants because so much depends on how they will react. As landlords prepare as best they can, they warn that this will not be clear until the storm actually hits.
“People are very worried that tenants are not fully aware of what’s going to happen,” says Rob Warm, Yorkshire & Humberside lead manager at the National Housing Federation. “Everyone is trying to prepare for it and try and predict what each individual tenant will do but the reality is that until it hits and people start seeing actual reductions, we don’t know.”
London-based Family Mosaic has welfare rights and money advisors plus two dedicated bedroom tax officers and an employment team. “The biggest challenge is getting people to engage with us,” says financial inclusion manager Mirca Morera.
“Often when people come to the number crunching they realise that they can’t afford the 14 percent charge [for under-occupation] and realise that they may have to take in a lodger or take on part-time work.”
However, she adds that the biggest barrier to work is affordable childcare, especially for lone parent families. Family Mosaic has around 1,000 tenants affected by the bedroom tax and 141 by the benefit cap, but the latter is much harder to alleviate because the financial losses are much greater.
So what happens if those efforts fail? “If somebody engages with us we will do what we can,” says Viv Davies, the association’s director of collections and credit control. “But if they don’t engage with us, what can we do? We would have to go down the possession route.”
However, Family Mosaic is taking a range of other steps including collaboration with local authorities on council tax benefit and using money judgements earlier in the arrears process as an alternative to possession.
“It depends what sort of organisation you are,” he says. “If you want to go along the route you’re used to then possessions will probably increase. If you want to become an organisation in which possession will not be the be all and end all, you need to get creative.”
Liverpool-based Riverside estimates that the bedroom tax will affect 7,000 of its tenants. It has recruited an 11-strong money advice team and believes it has saved tenants close to £1 million through measures such as savings on their energy bills and help in claiming extra benefits. “We will adopt a firm but fair approach to income management,” says John Wood, director of housing services.
Read the full article on the 24housing website.