-

The Government’s charge for under-occupation of homes supported by Housing Benefits, more widely known as the ‘Bedroom Tax’, has already cost one major social landlord in Greater Manchester £1m and has done little to stimulate employment or free up housing for larger families; it has however led to 150 homes becoming empty as tenants have been forced to move on and an increase in rent arrears in an area already hard hit by recession.

These findings and others are included in a hard-hitting report from Wythenshawe Community Housing Group (WCHG), the 14,000 home social landlord which was recently formed from the merging of Willow Park and Parkway Green Housing Associations.

Entitled ‘Six months of the Bedroom Tax: a View from the North’ the report covers the first six months of the change in Housing Benefit for social housing tenants of working age and living in homes judged to have spare rooms. WCHG estimates that the Tax had, in the first half year of operation, already cost the Group £956,000 and failed to deliver any increased levels of employment.

With a majority of tenants not wishing to move, and with Discretionary Housing Payments (the measure put in place to help those hardest hit by the change) proving insufficient to bridge the gap in funding, the Tax has proved a significant challenge for WCHG, exacerbated by the fact that even for those willing to move, there is a lack of appropriate smaller properties in the area for them to move to; the ‘Garden City’ of Wythenshawe is made up largely of family homes offering , three and four bedrooms to tenants.

Over one in five of WCHG’s homes have been affected by the new rules and of these the largest number (48%) are three bedroomed properties that are under-occupied by one bedroom. For the 2,433 properties where there is a single bedroom unoccupied, there has been a 14% drop in housing benefit; for the 590 properties where two bedrooms are empty, there has been an even larger drop of 25%.

Work, move on, or simply default

Faced with the shortfall, there are only three options for the thousands of people affected in WCHG’s homes. Firstly they can attempt to bridge the shortfall by increasing their income through Discretionary Housing Payments, other benefits, taking on a lodger or finding employment. This latter route assumes they are able-bodied or that employment opportunities are available. A second option is that they can move, by registering on the local ‘Manchester Move’ housing register, agreeing a mutual exchange with another tenant or by taking up private rented accommodation. The final option, of course, is to fall into arrears.

This leaves 565 disabled or severely disabled people who have no way to make up the shortfall in their household budgets and so must cut back on food, heat or other expenses if they cannot find employment.

Discretionary Housing Payments (DHPs) have not, in the case of WCHG, managed to bridge the gap. Of the 216 tenants who have successfully applied for DHPs only 131 have actually been awarded a payment representing just 7% of affected tenants. Of these successful applicants, 85 are for disabled tenants whose properties have been ‘significantly adapted’, this still leaves a further 565 disabled or severely disabled people who have no way to make up the shortfall in their household budgets and so must cut back on food, heat or other expenses if they cannot find employment.

Hitting the poorest, hardest

This finding in the report tallies with national reports that show disabled people to have been particularly hard hit by the Bedroom Tax. In December the National Housing Federation published a report that showed nearly a third of disabled tenants had been refused support through DHPs.

After asking every council in England, via the Freedom of Information Act, to supply statistics, the Federation found support claims from the most vulnerable had tripled in just one year. Again the report highlights that the disabled are particularly exposed; two thirds  (420,000 people) of those affected by the Bedroom Tax are registered disabled, according to government estimates.

At the report’s launch National Housing Federation chief executive David Orr said: "Whenever ministers are challenged on the bedroom tax, they tell us vulnerable people are not at risk because of these discretionary housing payments. But many disabled people and vulnerable families are facing miserable odds of getting help.”

"This support fund is ineffective and deeply unfair – just like the bedroom tax itself. The only real solution is to repeal it,” he concluded.

Separate research from the Papworth Trust has shown that for those disabled people impacted the only solution is to go without. Nine out of ten disabled people surveyed by the Trust said that they had to cut back on food or energy to make up the shortfall. The Trust also highlighted that for many the second bedroom was far from a luxury and was needed by partners who needed a break to get some sleep or to store essential equipment.

Finding work… or not

At its launch in April 2013 the Chancellor, George Osbourne, defended the Bedroom Tax as a measure that would encourage those on benefits to take up employment, instead. Talking to workers at a factory in Kent he described the current benefits system as one that ‘penalises work’ and stated that “the system became so complicated and benefits so generous, that people found they were better off on the dole than they were in work.

“We are simply asking people to make some of the same choices working families have to make every day. To live in a less expensive house, to live in a house without a spare bedroom unless they can afford it, to get by on the average family income.”

The reality exposed by the WCHG report is that there has been no uplift in employment as a result of the introduction of the Bedroom Tax in Wythenshawe. In total 112 WHCG tenants have moved into full or part time work since the Tax was introduced, many supported by the housing group’s ‘Real Opportunities’ employment team, but during the same period 93 tenants have lost their jobs or seen their hours cut by employers, leading them to have to claim benefits and subsequently get hit by the under-occupancy rules. There has effectively been no net gain in employment.

For those who are on Job Seekers Allowance (JSA) the amounts involved in the rental claw-back by Government are significant. Around 100 WCHG tenants on JSA have been hit by a double-spare room rule-change costing them £22.40 per week; with an average income of just £71.70 per week this is a heavy, if not impossible cut to take and will mean making an immediate choice between paying their rent or putting food on the table.

"Me and my daughter always had a weekend away in a caravan in the summer but we couldn’t afford this year. I’ve looked for extra work but can’t find it. We are coping at the moment but I’m worried about paying for gas over the winter."

A woman cited in the WHCG report, a mother from Benchill represented as Mrs S, said “I had to pay £24 a week in rent before April 1st. This has increased to £38 per week. I have paid it every week by cutting back on non-essentials. Me and my daughter always had a weekend away in a caravan in the summer but we couldn’t afford this year. I’ve looked for extra work but can’t find it. We are coping at the moment but I’m worried about paying for gas over the winter.”

As a result of the changes rent arrears have been increasing. In total 34% of WHCG tenants have gone into arrears for the first time and even though they have collected 63% of the Bedroom Tax so far, there is still a shortfall for WCHG of £486,718 in just six months.

Making the move

For those who cannot make up the difference through cutting back or finding work there is the option to move to another property but this also throws up significant challenges, again highlighted in the WCHG report.

In the first six months since April there were just 92 one bedroom properties made available across the housing group’s portfolio. This means that at current rates of availability it would take WCHG 16 years in total to rehouse all of those impacted by the Tax.

In total 415 tenants have indicated that they wish to move and 202 have moved so far, most moving to a smaller property or through a mutual exchange.

Only six families have moved into private rented accommodation, focusing attention on the critical factor that this is an unrealistic option for virtually all of those affected: in the period covered by the report for example, there were no vacancies whatsoever shown on RightMove for one bedroom properties that would be willing to accept benefit claimants.

There are now 149 additional ‘voids’ or empty homes that have been created as tenants downsize. This has added an additional cost of £420,000 to WCHG just through the first half year of the change in benefits.

A final irony for those attempting to balance the books at WCHG is the impact of homes now having to be left as a result of the Bedroom Tax. Across their stock there are now 149 additional ‘voids’ or empty homes that have been created as tenants downsize. This has added an additional cost of £420,000 to WCHG just through the first half year of the change in benefits.

Minding the gap and picking up the pieces

The team at WCHG face 2014 with a reduced income and one in five tenants needing to find a way to move or find more money for rent. So far they have invested £50,000 in extra staff to try and tackle the problem and have worked with their tenants on rehousing, mutual exchanges and applications for DHPs. Next they plan to continue to tackle the situation by providing financial advice, a wider range of housing options and by continuing to try and find employment for out-of-work tenants.

“The Bedroom Tax has had a disproportionate impact on Wythenshawe because of the historic make up of our mainly family houses,” Says WCHG chief executive Nigel Wilson.

“No one denies the need to reform the welfare benefits world to make access simpler and more effective but the awful consequences of the bedroom tax are hurting our tenants on a daily basis and run the risk of de establishing families long into the future. No one in 2014 should be faced with a choice of being warm or having something to eat, sadly that’s what some of our tenants are now facing.

“We are committed to doing everything we can to help and assist all those affected by the welfare changes, because it’s not just Bedroom Tax, the other reforms mean we have a considerable workload for our welfare and support teams, to help keep tenants in their homes and where possible help them into training jobs”.