All HHP tenants could be impacted by Bedroom Tax

HHP is bracing itself for increased debts when the 'bedroom tax' takes effect next month which would lead to a reduction in services.
HHP is bracing itself for increased debts when the 'bedroom tax' takes effect next month which would lead to a reduction in services.
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The Hebridean Housing Partnership could be facing significant arrears, impacting on all HHP tenants as well as local contractors, when the so called ‘bedroom tax’ comes into force in a few weeks time.

John MacIver, HHP Director of Operations, explained that HHP is bracing itself for increased debts if those faced with the under-occupancy penalty are unable to afford the cut to housing benefits.

The bedroom tax is estimated to affect about 300 tenants in the Western Isles at any one time. People who receive housing benefits and who live in an HHP house will lose 14 per cent of their benefits (around £10 a week) if they have one spare bedroom, and 25 per cent (or around £17 a week) if they have two or more spare bedrooms.

This would amount to more than £500 of benefit cuts for a house with one spare bedroom a year – meaning the household will have to cover a £500 deficit in rent money. This figure would be closer to £900 a year for those with more than one spare bedroom.

For HHP this will mean they have to recoup the loss of rent from the tenants – many who are already facing financial difficulty - with arrears increasing if they are unable to do so. 

Mr MacIver said: “It is difficult to quantify at the moment. Our concern is that arrears will increase because of this and this will impact on all tenants.”

He explained that because HHP have guaranteed not to increase rents by more than inflation plus 1% over the next three years “the only real option at the moment would be a reduction in services.”

This could mean a slow down in repairs and investment in the housing stock including replacing windows, installing new heating systems and replacing bathrooms and kitchens; something he said that would have a knock on effect on local contractors and jobs.

HHP are currently contacting everyone who will be expected to pay the ‘bedroom tax’ and are discussing with them how they will make the payments and ways to increase their income to reduce the impact of this change.

The under-occupancy penalty is part of raft of welfare reforms being introduced by the Government in Westminster and is aimed at improving the use of social housing stock while helping to contain growing Housing Benefit expenditure – however no exceptions are in place for those who don’t have the option of downsizing.

Mr MacIver explained: “There has not been a significant number of people who are looking to move. The major problem in the islands and rural areas is that there are not smaller houses available.”

He continued: “For example in Barra we have around 100 houses. In any one year there are only around two or three smaller properties that become available. There will be around 30 people in Barra who will be affected by the Bedroom Tax – we just don’t have the housing stock. It will be the same in most of the villages on the islands.”

He said that for those who will be affected by the benefit changes “there are not a lot of options”.

“What we expect is that people will pay. When we have been talking to people they are saying they will have to cut down on fuel and food. We are working hard to engage with people and provide them with advice and assistance but their options are very limited.

“We are also working with other partners and particularly the Comhairle to try and minimise the impact on the most vulnerable cases.”

He added: “In terms of changes in the legislation there are some things you don’t agree with and there are some things that are just wrong.”

The ‘bedroom tax’ has caused controversy since it was first announced. It has been strongly fought by opposition parties in the House of Commons as well as by the Scottish Government which has appealed to Iain Duncan Smith, the Secretary of State for Work and Pensions, to scrap the policy.

Commenting on the challenges facing HHP in the wake of the bedroom tax Conservative Highlands and Islands MSP Jamie McGrigor said: “I am very aware of the concerns, particularly from housing associations who may only have a small stock of one-bedroom properties. I have written to the Minister for Welfare Reform, Lord Freud, on this subject and further to his reply went to meet him at Westminster last Monday. I outlined to him the deep concerns of constituents, councillors and housing association officials in some areas.

“I ascertained that those of pension credit age are exempt and cases of hardship could be dealt with by discretionary funding supplied by government to local authorities. The Minister also said that houses may in some cases be redefined by the landlord if the second bedroom is too small to be classed as a bedroom. There is a need for flexibility and moderation.”

He added: “Lord Freud explained the need for this legislation which has come about because of the pressure from larger families who need houses. He assured me that the government would keep a very close watch on what the legislation throws up in practice and make adjustments accordingly.”