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Opinion: The bedroom tax - policy making in a league of its own

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Opinion: The bedroom tax - policy making in a league of its own

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Published by Jon Land for 24dash.com in Housing

Opinion: The bedroom tax - policy making in a league of its own Opinion: The bedroom tax - policy making in a league of its own

By Duncan Forbes, chief executive of Bron Afon Community Housing in South Wales

The Guardian's Patrick Butler highlighted in his article on 15 July that the DWP’s own studies have shown that 60% of tenants have been unable to pay the shortfall in their rent created by the bedroom tax and thousands have been forced into decisions whether to heat or eat. It is causing massive hardship which is enough reason to repeal it. But it also fails against the objectives the government themselves set for it.

The bedroom tax may not be a tax in the strict sense of the word but it is definitely a penalty and it is a penalty with a difference. Governments normally use penalties to change behaviours. Whilst the government claim they want tenants to move to avoid the bedroom tax, they have known full well from the start that such a move would be impossible for almost all tenants as the housing stock is not available for them to move to.

If it had been possible for tenants to move, then the level of savings the government had predicted and which they are trumpeting would have been significantly less. Instead, the government introduced this penalty with the clear expectation that it would trap hundreds of thousands of people and their families so the DWP could secure their financial savings. It was a “forked tongue policy” based on a deliberate decision to penalise some of the poorest people in the country.

The Equality Impact Assessment relied upon by the government and parliament when introducing the bedroom tax was lamentable. In a nutshell, the government predict their own DWP budget savings but said they didn’t really have a clue what other impact the policy would have, promising to evaluate it later. How is it possible that we can introduce new laws with so little understanding or care about their impact?

The government suggested the bedroom tax would ensure that we make better use of available social housing stock. In our area in South Wales, the opposite is the case and this pattern is mirrored over much of England and Wales. Just 25% of the vacancies locally have been one bedroomed properties whilst the proportion of people on the waiting list seeking one bedroom properties is 63 %. The real bottleneck in our locality is for smaller properties, exactly the properties that the bedroom tax is designed to encourage people to move to. The bedroom tax is making an already bad situation worse and fails to achieve the government’s objective of making better use of available housing.

The government suggested that the bedroom tax would encourage greater mobility within social rented housing and say it is a “promising start” that 4.5% of affected tenants managed to move in the first six months of the policy.

To put this into perspective, well before the bedroom tax was introduced, nearly 10% of our tenants were already moving each year; many upsizing or downsizing. There has been an increase in requests to move since the bedroom tax, but only within the small confines of a borough that is 12 miles long and 5 miles wide; hardly a massive shift in mobility and constrained by the absence of enough suitable homes. We aren’t letting more smaller homes than we were before the Bedroom tax, there are just more people competing for them.

The Employment Minister Esther McVey boasted in March that the bedroom tax was saving £1 million a day in housing benefit. In our local area (Torfaen in South East Wales) the bedroom tax saved the DWP £935k in 2013-14. The DWP paid £194k to the local authority to cover Discretionary Housing Payments, while the local authority and Welsh Government contributed a further £290k towards Discretionary Housing Payments making a total of £483k. We have spent just over £100k on extra support for tenants to secure our rent. The turnover of properties has increased by about 25% with additional rent loss and cost of works to make those properties ready to relet costing more than £150k. So all but £200k of the DWP saving have simply been transferred to extra direct costs for other public services.

What about the hidden costs though? Right across the public, charitable and voluntary sector, volunteers and staff in organisations are picking up the hidden costs of the Bedroom tax working with those who need help. Behind closed doors, there are many other hidden costs.

The Housing Associations Charitable Trust (HACT) have recently published a guide to measuring the social impact of community investment using a wellbeing valuation approach. Wellbeing Valuation is being used by a number of Government Departments including the Treasury and is included in the Treasury Green Book; the UK Government’s core guide to policy evaluation.

It measures a social intervention by how much it increases a person’s wellbeing and then identifies the equivalent amount of money required to increase a person’s wellbeing by the same amount.

The HACT model suggests that the social value of relieving just one adult person’s depression or anxiety is £36,766. So what are the social and hidden costs of increasing the levels of anxiety and depression within thousands of homes as tenants cannot eat or heat and cannot meet their bills? And rather than encouraging people to seek employment as the bedroom tax was intended to do, how much further is that anxiety and depression driving many people away from the labour market as they inevitably and rationally focus their energies on finding ways of keeping warm, eating and keeping a roof over their own and their children’s heads?

The bedroom tax stands out as one of the worst examples of public policy in recent years. Quite apart from being objectionable in principle, it isn’t even meeting the government’s stated objectives other than saving the DWP budget line whilst shifting the costs elsewhere. It needs to be repealed.

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