21,000 young Scots face losing over £22m in rent from planned LHA cap



Paying bills stockAn interim report on the impact of UK government plans to cap housing benefit for social housing tenants aged under 35 has concluded that 21,000 young Scots could face a rent affordability gap of up to £22.6 million annually as a result.

Commissioned by the Scottish Government in conjunction with the Chartered Institute of Housing in Scotland (CIH Scotland), the Local Housing Allowance (LHA) impact report was submitted this week to the Scottish Parliament’s public petitions committee.

A final report exploring the potential to mitigate against the impact of LHA restrictions is due to be completed this summer.

Since October 2015, the UK government has made various proposals and amendments to cap Housing Benefit or the housing element of Universal Credit for social housing tenants at LHA rates, including for those living in supported or temporary accommodation. The proposals are intended to bring payments for social housing tenants in line with those living in the private rented sector.

Legislation to implement these proposals has yet to be introduced. However, as the proposals currently stand, single people under 35 years of age will see their allowance capped at the Shared Accommodation Rate (SAR).

Comparing DWP claimant data on average awards received by young Housing Benefit claimants with the Shared Accommodation Rate produces an annual estimated rent gap across Scotland of £22.6m. This takes into account mainstream tenants and those living in temporary or supported accommodation. While some tenants living in specialist accommodation may be protected from the cap, it is not yet clear what exemptions will be made or how much funding will be available to plug this gap.

Housing Association rents are typically higher than local authorities and so will be affected more by the proposed LHA cap.

Using data from DWP awards and the recent supported accommodation review suggests that around 14,000, or 65% of mainstream young social tenants might be affected.  This excludes an estimated 7,000 young people in supported accommodation for whom additional support or exemptions may be available.

The interim report has been submitted to the Scottish Parliament public petitions committee following the lodging of a public petition on the Local Housing Allowance by petitioner Sean Clarkin in March 2017. The petition calls for the Scottish Government to bring forward a debate on the planned LHA cap which it dubs “bedroom tax 2”.

Commenting on the findings of the interim report, CIH Scotland executive director, Annie Mauger, said: “Identifying how we might mitigate against the negative impact of the LHA cap on younger social tenants is an ongoing work in progress and a final report will be published at the end of July. But this interim report clearly shows the potential scale of the problem across Scotland. The intention behind this report is to be able to show exactly how social tenants aged under 35 will be affected and hopefully to exert some additional pressure on the UK government to change its plans before they are due to enter into force in April 2019.”



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