Blog: How benefit cuts will hit the 50,000 homes programme
LHA restrictions will hamper the Scottish Government’s plan to deliver 50,000 homes over the next five years, writes David Bookbinder.
It looks like the April 2018 cuts to Housing Benefit and Universal Credit for social housing tenants won’t attract the same public profile – and public derision – that the bedroom tax has.
But apart from bringing misery and debt to tenants and hugely difficult dilemmas for landlords, the cuts are a significant threat to the success of Scotland’s 50,000 social/affordable homes programme.
In April 2018, tenants who began their tenancy after March 2016 and who are reliant on benefit will find that the help they get is restricted to the Local Housing Allowance rate for their area.
Tenants in housing with higher rent and service charges – most notably in supported housing – will face significant cuts, though it looks like there will be at least some degree of protection for specialist stock.
But the biggest group affected will be single people under 35, whose help will be limited not to the one-bed LHA rate but to the shared accommodation rate. Some current examples of the rate are £68.28 in Glasgow, £61.36 in Argyll and Bute and £60 in Renfrewshire and Inverclyde, and these rates are frozen at least until April 2020.
In existing stock, the impact, whilst bad enough, will be gradual, because it affects only tenants new from April 2016. But in new build schemes, the impact is likely to be much greater.
One of our member associations contacted us this week to highlight that a proposed new build project would have around a third of lets allocated to homeless applicants, the majority of whom would be single people under 35, with a number of further allocations through the housing list also likely to be to people under 35.
Realistically, whilst associations join with others in making huge efforts to support people into employment, a good proportion of these lets will be to people reliant on support with their housing costs.
The association’s current estimate is that rents for one-bed homes will be around £15 per week above the LHA shared accommodation rate. That blows a hole in the association’s efforts to make the development’s funding package stack up.
It also puts the association between a rock and a hard place. Should they just not allocate to people under 35? Ah, that’s unlawful. Don’t allocate to people on benefit? That’s unlawful too, and rightly so of course. And anyway, where would such restrictive allocations practices leave the association’s response to homelessness and other acute housing need?
So allocate as normal but, as you surely must, warn prospective tenants about the shortfall. Some are bound to be put off and will probably reject the offer. Others may accept but then face a build-up of arrears from day one – a dire situation for tenant and landlord alike.
We can’t expect the Scottish Government to mitigate the impact of every punitive Westminster cut. But as we finalise our responses to the consultation about Scotland’s new social security powers, it’s a conversation we desperately need to have, and soon.