In 2013 a change to Housing Benefit was introduced which meant that those in social housing with spare bedrooms faced a reduction in benefits. This was (dishonestly) described as the “Bedroom Tax”. Rather than have their full rent paid for them they had to cover some of the bill – on average £15 a week – themselves. It is certainly a tough policy – if you are on a low income, £15 a week is a lot. However it is also fair. Why should a low paid household in overcrowded conditions in the private rented sector subsidise a household in social housing with a spare room?
But the point was not just about greater fairness and reducing the burden on the taxpayer. It was also about changing behaviour – to reward work and to encourage those with a spare room to consider swapping with a household in overcrowded conditions. A measure of success is the sharp fall in the numbers affected by the policy. When it came in, 660,000 were affected. The latest figures show it has since fallen to 449,000.
Last week the Department for Work and Pensions produced an evaluation – including extensive market research by IPSOS MORI with social landlords and those whose benefits have been cut due to having spare rooms. It was published along with a large number of other announcements as Parliament broke up. This may have been the nature of an administrative struggle to meet a deadline. But some cynical elements in the media felt it was a wheeze to “bury bad news”. Either way, any one who actually reads the report can see that a lot of good news has been buried.
The media gave attention to those who had responded by saving money. 77 per cent said they spent less on food, 75 per cent, less on clothes and 47 per cent less on fuel. (I did not see it reported that 38 per cent said they had cut spending on eating out, 34 per cent on holidays and 26 per cent on smoking).
The story of those who responded in a different way – by earning more – has been ignored.
Remember that most people on Housing Benefit are in work. It often might be low paid or part time work. Many of them have responded to a shortftall of £15 a week by increasing their number of hours. The “taper” is a 65p reduction in benefit for each extra pound earned. So someone affected earning £10 an hour works four hours to get an extra £14. The report found:
“20 per cent of affected claimants say they have looked to earn more through employment-related income as a result of the Removal of the Spare Room Subsidy (RSRS), rising to 63 per cent of those who said they were unemployed and seeking work.”
Among the social landlords the survey found that better use was being made of housing stock as a result of the reform:
Some tenants took in a lodger – far more took in a friend or family member in a less formal arrangement. That is also a positive outcome in terms of freeing up the housing supply – including in the social sector. It is probably an area social landlords could be doing more to promote:
“The claimant survey supports the finding from the landlord survey that many local authorities and housing associations have not proactively promoted taking in a lodger as a response to the RSRS. Among still affected claimants, six per cent said they had been contacted by their landlord about this possibility.”
In terms of promoting employment, much of the response from social landlords was that their response to the spare room subsidy cut was focused on the long term. That suggests that further advantages to helping people into work and of reducing overcrowding will come in the future:
“The case study LAs were all operating schemes of some sort to help people into work or training. Most of these were not aimed specifically at those affected by the RSRS, but efforts had been made to inform RSRS-affected tenants about them so that they might take part if appropriate. Many of the case study landlords also ran schemes of their own, though again these were usually open to all tenants, rather than targeted at those affected by the RSRS. One landlord had piloted a scheme specifically focused on a large block of flats where very high numbers of tenants were affected by the RSRS – this was due to a historic policy of not placing families in the high rise flats, even though most of them had two or three bedrooms. The LA had made receipt of DHP conditional on participation in the programme and reported that the scheme had helped some into work, though had not yet formally evaluated its effectiveness in reducing the numbers affected by the RSRS…
“Landlords and LAs running schemes to help people who had been out of work for some time to get back to work, emphasised that it could take quite a while to build skills, address health issues and work up to paid employment. Apprenticeships, voluntary work and gaining qualifications were all part of their work, but unlikely to result in a quick reduction in the numbers affected by the RSRS. Addressing debt issues and budgeting were considered to be more important in the first instance, whilst finding work was more likely to be a longer term solution.”
Naturally there will be limits to the scope for this research. Discretion might lead to some unofficial arrangements not being disclosed. Would you tell an Ipsos MORI researcher if you responded to the benefit cut by doing some work in the black economy for cash in hand?
There will certainly be some with good reasons for not taking up the choices available to them. If your family is in a street property with a spare room would you choose to swap for a smaller place in a tower block just to avoid an extra £15 a week?
Yet the evidence shows that many are responding to the rewards for work – or the incentive to downsize.
The “landlord survey suggests that nationally around 45,000 RSRS-affected claimants had downsized within the social rented sector”. Consider the moral aspect behind that statistic. This week 45,000 families are alleviated from overcrowding due to a policy that left-wing campaigners have been hysterical in attacking.
Far from “bad news”, the latest report is a vindication.