Oral evidence: The Impact of the Bedroom Tax in Scotland - Continued, HC 937-ivMonday 10 February 2014
Oral evidence, 10 February 2014.
Witnesses
Mike Bruce, Chief Executive, Weslo Housing Management, Sandy Young, Housing Manager, Almond Housing Association, Alison Kerr, Chair, West Lothian Tenants Panel, and Andy Ashcroft, Lead Officer, West Lothian Housing Partnership, gave evidence.
Chair
Gentlemen and lady, can I welcome you to this meeting of the Scottish Affairs Committee. I understand that most of you were sitting in listening to the previous sessions, so you will be aware of the general background. The Committee has produced an interim report on the bedroom tax, where we made a string of recommendations. We very much welcome hearing your views on those points and whether or not you think that those address the difficulties that have been caused by the tax. Of course, we have also been overtaken just recently by the announcement by the UK Government that in its view the Scottish Government has now, and has always had, full powers to mitigate. I think we are interested in exploring how best that can be achieved. We have touched on some of the points in the earlier session about whether or not DHP is the best route, writing off is the best route, how we deal with the question of moral hazard and so on. Your views on those issues would be welcome. In particular we would want to hear from you whether or not there are any issues that are particularly relevant to you here in West Lothian. We have been to Fife. We have been to parts of Glasgow. We have been to Airdrie as well. Clearly, a lot of the issues faced by tenants everywhere are similar. If you could draw to our attention anything unique about West Lothian, I am sure there are hundreds of things, but particularly relating to this, but also how we have moved on from where we were before, and issues relevant to that, that would be great. I wonder if we could start off with yourself, Ms Kerr, and ask people just to introduce themselves and just give an initial observation on the points I have raised about our report, the Scottish Government having powers to deal with this matter and your opinion on what is the best way.
Alison Kerr
I am Alison Kerr. I am Chairperson of West Lothian Council’s Tenants Panel, and I am a bit confused: if the Scottish Government did or do have these powers, why haven’t they used them before now? Why are people in the situation where they are sitting on hundreds of pounds arrears in rent, wringing their hands, sitting in a corner, and yet we find that politicians indeed could afford that power, to take that problem away?
Andy Ashcroft
Good morning. My name is Andy Ashcroft. I am area vector with the West Lothian Housing Partnership. I am also connected with the Wheatley Housing Group, which is the largest housing group in Scotland. The bedroom tax has, for us, been an unmitigated disaster. It is quite clearly one of the most iniquitous pieces of legislation I think we have ever come across, and we have spent an inordinate amount of time in the last year as an organisation, with Wheatley and West Lothian Partnership, trying to mitigate against the impacts of the bedroom tax. It is our view that it has perhaps penalised those who are the most needy elements in society, and we have spent quite a lot of time trying to reassure people, giving them advice and assistance, both in terms of how they can maximise their entitlement to housing benefit, but also, I think more worryingly, people now have huge issues around fuel poverty and other pressing issues. That has very much been our focus and we are mitigating against that, so much so that the Wheatley Housing Group has introduced a transitional support fund, a £2 million fund, to try to assist those people who fall out of discretionary housing payment, particularly those people who have more recently been impacted by a number of sanctions with jobseeker’s allowance, the claimant commitment. That has been our focus, we have put quite a tremendous amount of resources on the ground to try to mitigate against that. Absolutely this is a big pressure for us—50% of West Lothian partnerships rent is tied up in housing benefits, so it is a major risk issue for us. The one final point I would make is that the bedroom tax, for us, is simply the tip of the iceberg. Universal credit is clearly the one that we are all worrying about. Some of the mitigating activity that we are doing is preparing people for the impact of universal credit, so we are offering advice about bank accounts, digital inclusion and that type of activity. I think it is worthwhile pointing out that this the tip of the iceberg and what is coming worries us even more.
Mike Bruce
Hi, I’m Mike Bruce, I’m Chief Executive of Weslo Housing Management. Like Andy, we have been spending a large amount of time and resources directing towards mitigation of the bedroom tax. The effects of that are relatively well documented. Again, I agree, although it has been very difficult for many of our tenants, that will pale into insignificance with the advent of universal credit in a year or two, if that stays on time. Not to repeat what has already been said today, the pertinent point that I think has been made this morning, is yes, it would be good if we could mitigate the effects of the bedroom tax and write off these debts, but we have ourselves about 66% of our tenants who are paying the bedroom tax. What are they going to think when other people who have not been able to pay have their debts written off? There is a serious issue about the whole amount of bedroom tax that has been accumulated. Many people are, in fact, paying it and they will look to think, “Where is our money?”
Sandy Young
I’m Sandy Young, the Housing Manager at Almond Housing Association. Again, a lot of the points that have been raised here are the same for our organisation and we did spend a lot of time working with our tenants long before the bedroom tax kicked in in April last year. Because of that, we have managed to get about 60% to 70% of them actually paying the bedroom tax at the moment. Just to be clear, they are struggling to pay it, our housing officers have found that on the ground, with the difficulties that these people have had to try to get that money pulled together. A few of them have mentioned how lucky it is that we have had a very mild winter because of the difficulties in heating the home, as well as paying the shortfall of the tax. Whilst I welcome the news that it looks like there might be a solution to it, the question I would have, as Alison said at the beginning, is why has it taken them so long, and how are we going to deal with the fact that, while we have managed for up to 70% of our tenants to find a way to pay this, what is going to happen with them? They have struggled and scrimped and saved, used up money to pay that, and now are they going to be penalised because of it? As an organisation, it has been very difficult for us, but it has been extremely difficult for our tenants as well, and we want to see something resolved on that score.
Chair
Can I just pick up one point? We sent our report to the UK Government, and hopefully they will consider it as part of the review that they are making about how the bedroom tax is amended across the UK as a whole. Leaving aside for the moment the question of the Scottish Government and mitigation, there are certain recommendations that we made. Do they seem to have been along the right lines, or were there any major issues that you think we omitted?
Sandy Young
I had a look at in more detail again when we were asked to come along because it seemed a sensible thing to do.
Chair
That concentrates the mind. I understand that.
Sandy Young
Yes. The report made some points about orphan properties being offered to someone, and then, if they did not accept that, whether that is an acceptable offer and so on. It also referred to trying to find ways to slowly sort out the situation of the bedroom tax, but I am not sure that those proposals could work for us, regardless of what suggestions you were making in the paper, because the simple fact is that we have 500 people who are affected by the bedroom tax. We are getting a turnover of about 17 properties a year on one-bedroom properties. The situation will never be fixed under that current policy. While the report’s recommendations contained some really good points, and there was certainly nothing that I could say, “Well, that wouldn’t work”, the reality is that, for me, I would just like to see the whole thing binned, absolutely binned.
Chair
To be fair, we did actually recommend that as well. If it did not get binned, we always thought it wiser to have a fallback position of various amendments, so we offered those as well. I think that is what we are seeking clarification on. Can I just seek a point from you? You mentioned there the number of houses you had and the turnover and so on. We heard earlier on from the previous panel that it would take six to seven years before the problem was cleared under the existing transfer. Do you have a figure as to how it would affect yourselves?
Sandy Young
You might as well put 67 years as opposed to six to seven. The reality is that we have 500 properties and a turnover of 17 in terms of one-bedroom properties, which is what the bulk of people who are affected by the bedroom tax with us require, and of the 17 that turned over, not all of these were allocated to people who were hit by the bedroom tax because of our Common Housing Register and the fact that it was allocating properties through nomination agreements and so on. The reality is that I do not think you would ever see a situation, had this policy continued, where we would ever be able to clear the 500 people that are affected by it. There is no point even saying it would take us 10 years or 15 years. I just do not think it would ever happen with the sort of numbers that our association have. We just do not have the stock to make it work.
Andy Ashcroft
I think that is reflected right across the country. The reality is there are just not enough one-bedroom properties to make this policy work. It is just not going to happen.
Alison Kerr
It is not just the case you have one-bedroom properties. Why should the tenant be penalised? Yet again it is another financial resource on the tenant, who has to then pay to move to downsize. They may find that, like myself, it took me 25 years nearly to get the house, the mid terraced house that I am in at the moment. I have done a stint in a top flat, and then I have done a stint below, at the bottom of a block of four. All the connotations go along with that, the noisy neighbours and things like that, so you get 25 years to get a house, and then they are saying, “If you do not move out of that house, into a one-bedroom house, we are going to hit you with 25% bedroom charge”, which means that—how does a tenant get the money to move into the one-bed house? I am not being disrespectful—I might just be being stereotypical—but the one-bed houses you would normally find would be for younger people in life. It is fine if middle-aged couples or older couples wished to move back into the very situation that took them 25 years to get out of.
Andy Ashcroft
I think that is an excellent point. There is no doubt—and I would agree very much with Sandy’s points as well—the fundamental flaw in this legislation was very much the assumption that people could move to smaller properties. Absolutely crazy, when you look at the stock profiles. Another point I would make is that if organisations have ambitions to build houses, and certainly my own does in terms of the Wheatley Housing Group, the fundamental issue here is that, at the moment, looking at scheme profiles over the next couple of years, you would naturally be erring on the side of caution and saying, “Well, maybe 70% of our small builds should be one-bedroom”. If the bedroom tax is ultimately scrapped, that is a potentially huge issue, and Alison’s point is absolutely correct. Why should tenants in this day and age not have the luxury of an additional bedroom for visiting family, friends, carers, that type of thing? It is absolutely crazy, ill-conceived, and clearly not working, as has been well documented.
Lindsay Roy
Human rights issue.
Chair
Get off the fence. You have an opinion in these things. Just tell us it straight. That is much better.
Lindsay Roy
I am looking for some brief answers in terms of statistics. What proportion of your tenants are mostly under-occupying houses, as determined by the Government criteria?
Andy Ashcroft
I will start. We are a very small RSL based in Livingston. We have 381 units. Fifty-four people are impacted by the bedroom tax. Effectively two-thirds—similar to Mike’s figures—of these people are paying, and one-third is not. It is equivalent to about £7,000 in terms of our arrears simply on bedroom tax alone. For a small RSL, as you can imagine, that is quite a significant amount of money. You can start to stack that up, but the larger you get—
Lindsay Roy
Arrears.
Andy Ashcroft
Absolutely. In terms of resources, the point was made in the previous session. The amount of resources that we are now investing in terms of trying to recover what is a scarce pound competing against all of the other priorities that people have, and I mentioned the utilities, 500% rise in fuel costs over the last four to five years. That is huge for people. Our experience is that people are making stark choices between fuel, food and rent, and that is a fact. That is what is coming back from the doorsteps.
Mike Bruce
15% of our tenants are affected by these charges, and that amounts to about £200,000 a year in rent. Some of that is mitigated by DHP, but nevertheless it is a massive amount. Just going back to an earlier point, I do not think you will find anybody who is going to be supporting this tax here. Everybody is off the fence on this one. If you talk to housing professionals, quite frankly, it is—in my career, this will be the only policy I have ever come across that is actually unworkable. This is not really about political beliefs or grief or anything. This just is not going to work.
Sandy Young
Yes. We have higher numbers. 20% of all our tenants are affected by the 14% or the 25% impact of bedroom tax, and that has an impact on our organisation. If all these tenants were not to pay that, it is about an annual figure £300,000 a year, which is a significant sum of money, and had our tenants not been working with us and scrimping and saving to find that money, we would be looking at a major hit and an impact on our finances for this year and the years going forward, which has a number of implications for the services we provide and any potential attempts to decide whether we are going to build any more houses. Fortunately, we have been able to work with the tenants to get a fair number of them to pay that sum, but there is no doubt it has had an impact on us. One in five tenants in Almond Housing Association currently see this as an issue.
Lindsay Roy
How many of them have been able to downsize?
Mike Bruce
We altered our transfer policy to give priority to applicants within the Weslo stock who wish to transfer, first of all, and downsize. That came along with the bedroom tax in mind, but we have only been able to help 20 people in the time since we adopted that, which was just before the introduction, probably about February last year. In about a year, maybe 20, maybe a little bit more.
Chair
Sorry, 20 of how many?
Mike Bruce
350 people affected, so less than 5%.
Lindsay Roy
Do you know how many people have said, if there was availability, they would downsize?
Mike Bruce
No. I don’t know that, no.
Andy Ashcroft
One of the factors, I think, that is becoming more and more obvious is there is more and more media coverage about the bedroom tax and the potential for Government assistance in terms of mitigating against it. People are making some choices, which are, “I am going to hold fire, I am going to hold tight and see how this goes”. In terms of Weslo in partnership, we have had two people who have expressed a willingness to move, but the vast majority of people said that they are going to hang tight and see how this develops.
Lindsay Roy
You are not offering incentives for them to move?
Andy Ashcroft
We, as the Wheatley Group, offer incentives to our subsidiary partners, basically very much around things like removal costs and stuff like that. Basically the incentive is start-up costs in someone’s new home to try to make that transition as smooth as possible for people. The fact is there is very little demand from people, and I think there is a strong sense that people want to hold on to something that they have, in many cases, waited a long time for.
Lindsay Roy
That is a very practical approach, because they can see their housing upgraded.
Andy Ashcroft
Yes.
Sandy Young
We are finding the exact same situation as my colleagues here. We have had more in terms of numbers and proportion, but we have only had about a dozen people we have been able to move, partly because there just isn’t the stock to move them to, and, as Andy was saying, a number of our tenants have said they do not want to move. This is the area that they have lived in, this is where their family and support is, and they do not want and cannot afford, actually, to pack up and move. You are talking about tenants who barely can afford to put carpets in their house. If I am asking them to move house, who is going to put new carpet in? They are not furnished properties. You are talking about huge upheaval, so it is not surprising that they do not want to move. We did ask the question when we interviewed everyone affected by the bedroom tax before it came into play, and the numbers of people who were looking to move were fairly small. Those who did want to move, we put them on to the HomeSwapper and so on, and we gave extra points and amended our policy, but the fact is there is just no stock to move them to, and not much willingness among tenants to make that move anyway.
Lindsay Roy
At the other end of the scale, do you have families that are looking for bigger houses, that are overcrowded?
Andy Ashcroft
Yes. I think that it is always the case that people, because of their family circumstances and growing families, need to move, but some of them clearly are thinking twice about the impact of the bedroom tax on decisions about upsizing in terms of property. That is a big consideration for people, and we are always giving people advice about the potential impact of those decisions on their finances.
Lindsay Roy
Do you have availability for bigger houses?
Andy Ashcroft
Certainly in my case, no. We have a very, very small turnover of properties, about 25 properties per year, of which one in 50% of those properties are nominated by the council, and those tend to go to section 5 referrals for homelessness. Our scope for movement is extremely limited, as you can imagine, in a very small RSL.
Lindsay Roy
In terms of overall design or overall strategy, to what extent is under-occupation a priority?
Andy Ashcroft
I will start. It has been a significant priority for ourselves as the West Lothian Housing Partnership to very much minimise the potential risk associated with non-payment. We have been very careful about the messages that we have put out about our approach to collecting rent, because we do not make a distinction between bedroom tax and rent. It is rent, and it is often important to make sure that we do not cloud that issue. We, as an organisation, continue to give a very strong message that if people engage with us, we will give them as much advice, support and assistance as we can to help mitigate against the worst excesses of this particular reform.
Chair
Can I just clarify? Presumably, though, you still have a fair number of people that do not engage.
Andy Ashcroft
Yes.
Chair
It is a bit like the issues that we were raising with the council earlier on about people not applying for DHP. To some extent, that is people hiding and hoping it will go away, but are there are other explanations as to why people are not engaging?
Andy Ashcroft
Our experience is that people bury their heads in the sand, basically. There is a whole range of reasons why people will not engage. What we try to do is be as clever as we can about trying to contact people. We have a 24-hour, seven-days-a-week call centre, so we do outbound calling at different times, other than nine to five, to try to engage with people. We very much focus on visits, face-to-face contact, so we are using every available opportunity to try to get people in. But in some cases, people refuse to engage, and we are left with some difficult decisions as landlords.
Lindsay Roy
You have also had to train your staff, in the sense of dividends around this?
Andy Ashcroft
Absolutely, and I think staff have a professional responsibility, but some of them keenly feel the impact of this and they see this day in and day out with people who have extremely difficult circumstances, as I said earlier, making really stark choices between fuel, food and rent, and that is a very difficult place to be. Yes, the staff are sensitive and empathetic, but in some cases they have to be firm because the rent has to be paid.
Mike Bruce
Going back to resources, like our colleagues at Almond, we have spent an enormous amount of time preparing for this in terms of training of staff, conducting a census of tenants, writing to every tenant, articles in the newspapers, all that kind of stuff, and costing an enormous amount of money. I do not know exactly how much; we could take a stab at it, but if you are interested in how much that is costing in resources for RSLs, certainly, I would recommend this. I do not know if you have seen this, Real Costs of the Bedroom Tax, which the Scottish Federation of Housing Association has produced quite recently. There are some stark figures in there.
Chair
That is right. We have it in black and white. We do not have a colour copy like yourselves.
Mike Bruce
No, I had to pay extra for that.
Chair
That is a special effort for today. I understand that.
Jim McGovern
Certainly in Dundee over the past 40 or 50 years, any new build social housing has been based on two or three bedrooms. Very, very few have been one-bedroom houses, new build. Is your housing allocation based on the size of the house or how many bedrooms are in it?
Mike Bruce
Yes.
Jim McGovern
If it was a couple without children, say newly weds or pensioners, would they get the appropriate size of house, a one-bedroom house?
Mike Bruce
No, they would probably get a two-bedroom house in the past, recognising that people have needs for just more than the single bedroom. It is just a way of life that people would need room for other facilities in their house. In the case of older people, they are maybe downsizing, but they would still have an enormous amount of possessions, for instance, stuff that they have built up along the way. No, it is not just that easy to move into a one-bedroom house. It is probably more likely with a young married couple in the example you give, but they themselves would be looking typically, maybe even stereotypically, to create a family, so we would tend to put them in a two-bedroom house.
Jim McGovern
Yes. That is pretty much in line with the evidence we have heard around Scotland; newly weds get a two-bedroom house because the chances are they are going to have a family at some stage in the future. Does anybody else want to add anything?
Sandy Young
The exact same situation. It has meant our policy allows that, but again, it comes down to stock. As an organisation, we have a lot of two-bed and three-bed, two-bed flats in particular. How do we decide that we are not going to let these properties to a couple or a single person? There are not that many people on the housing list that would fit the profile for a two-bedroom property. Two pals moving in, a person, in our case, with an older person—a single parent, a child, or a family with one child. Our policy initially did not allow that anyway, for a young child in a flat. We tried to get them into a house. We have created a situation because we have had to use the stock that we have available to us. We have to let it. The result of that is that we have a lot of people, couples and single people, living in a two-bedroom flat, because that is what we have given them. That is what we have offered them, and they have quite rightly accepted it. It is not that they have come along and said, “I only want a one-bedroom and I will only take a one-bedroom”. We have said to them, “We will give you a two-bedroom”, and they have said, “That’s great, thanks” and moved in, unbeknown to them that, years from now, they were going to be penalised for that decision.
Mike Bruce
I think that is part of the big issue. People have accepted the accommodation in good faith over the years, the accommodation they are in, and then overnight, with virtually and practically no warning, they find themselves incurring additional charges. Had even the legislation been introduced to take effect a year hence or something like that to give people who were at that time accepting houses that, according to legislation, were too large for their needs, they would have had some information on which to base their decision. But no, they have just been caught overnight, and that is part of the absurdity.
Chair
There is also the suggestion that the grandfather rule only applies to new cases. A number of those things have been raised.
Jim McGovern
I think it is accepted wisdom that there are not enough small properties anyway. Even if there was a year’s notice, there are not enough small properties for people.
Mike Bruce
Yes, but people might have been able to decide in the knowledge that if they accepted a particular tenancy, they would know and would be able to prepare for the additional charges when it was introduced.
Chair
Alison, you wanted to come in.
Alison Kerr
Yes, if they knew that, if the bedroom tax had been mooted before the person had the bigger house, that would be different, whereas the village that I stay in has in particular some very low-demand areas and low-demand properties, and on occasion it has been known where single people get three-bedroom houses—and in particular in a block of four that I was telling you about that I did my 12-year stint in—and nobody wants to live there. Rather than a house be empty, would it not be better giving it to one person, but then lo and behold, that one person’s circumstances change, they lose their job, they go on a benefit and there will be a 25% bedroom tax charge. It is just a horrible, vicious circle and to sort of amplify your point—it was Graeme I think made it—that the original idea behind the bedroom tax was there was too many people rattling about in big houses. I am sorry, I am not being disrespectful, but the majority of people that are rattling about in big houses are exempt, so that was an ill-thought out thing as well. It is people at working age that are on very low benefits or disabled by some manner or means that are in fact suffering the most. Lindsay made the point about people upsizing. I would like the opportunity now to mention I invited another member from the Tenants’ Panel, but unfortunately she has a hospital appointment. Back in May last year, Janine and family, her husband, her partner and four children lived in a two-bed house and they were offered a bigger house in May of last year. They went along. Janine went and saw it, that was great. However, they would not allow Janine to sign on her own, her partner had to be with her. He had not long started a job. He asked for time off, he was told, “No, you cannot get it” whoever had to take it, because there was no other way around about this. If he did not sign for it the next day, they were not getting offered that five-bed property, so he took time off work, signed it, got the house, went to work the next day and was discharged for gross misconduct. They now have a five-bed house, they have no pay coming in because hubby has been told just to go away back home. They incurred the bedroom charge, because obviously the age of the children, 10, nine, seven and two, the 10 and nine can share a room, the seven and two can share a room, so they now have two spare bedrooms and that went on. That has just recently been resolved, where Janine and her husband had accrued hundreds of pounds of arrears in the rent and previously they had not a penny in arrears with the rent account. Working tax credit would not go near her, because they changed their address. That family were living on a child benefit for months. In between times, also her mother-in-law committed suicide, her father was seriously ill and in a coma at some period. The father was showing suicidal tendencies as well.
Chair
Sorry, I am not sure we want to discuss an individual’s personal circumstances too much.
Alison Kerr
I know, but that is all impacting on a young couple’s life—
Chair
Enough.
Alison Kerr
—and originated through taking a bigger house, bedroom tax, no income and everything else that piled on top of that was a truly traumatic thing.
Chair
Graeme, you wanted to come in.
Graeme Morrice
Yes, thanks, Chair. I was going to ask you some questions along the lines of you giving that particular example, Alison, of Janine Elliott, who is the secretary of the East Knightsbridge Tenants and Residents Association, who had been invited to come along today, but you have just explained she unfortunately had a hospital appointment to go to. I know that you have received permission to give her personal circumstances to illustrate this point. I wanted to ask you as a kind of tenant and representative of a tenants’ organisation, in this case it is the West Lothian Council and Tenants Panel, what kind of feedback you are getting from other tenants within your own area of Blackburn and across West Lothian on this issue. Do you have other examples of tenants who have been hit by this, who have to make stark choices of whether they eat or heat and what are people basically saying about it from your kind of personal knowledge?
Alison Kerr
It will be unique and I know certain events, they are totally hands up. You are right, it is a case of they will not put the heating on, they eat or whatever. That is my own personal experience. Some are managing to pay, however, that has had an impact on other things within the family household. Some are not managing to pay and some people do, yes, stick their head in the sand and just hope that when they come back everything is going to be resolved. However, a lot of people still do not know about the discretionary housing payment. How is that possible? Do you know, sometimes I get a bit frustrated as to why is that information not getting out there, because like Mike said, it is in our Tenants’ News, it is advertised in local offices, but then maybe that is places that people in arrears with rent do not always access, because they have this stigma about themselves that they know they are in arrears so everybody will know that they are in arrears as well.
Graeme Morrice
You represent—in fact, you are the chair—of the West Lothian Council Tenants’ Panel. Have you sat down with the local authority to discuss this issue jointly to see how there can be a joint approach involving yourself and other tenants’ representatives to try to help people out there who are experiencing this difficulty?
Alison Kerr
We constantly do that. The Tenants’ Panel meet on a monthly basis and we constantly discuss topics like that and we also have two housing networks in West Lothian, one covers the west, one covers the east of West Lothian, so that is very high on the agenda at any and all of the meetings on a monthly basis. We make arrangements for that, it goes in the Tenants’ News, we make arrangements for information bulletins to be sent out, so we try our hardest.
Graeme Morrice
Yes, that is great. Can I ask Andy, Mike and Sandy similarly in terms of how you are dealing with this and working with tenants? Do you have tenants’ representatives on your boards, do you have tenants’ associations that you work with? How do you address that issue of working in partnership with your tenants and their representatives and representative groups?
Andy Ashcroft
Yes, absolutely, affirmative to all of those points. We have tenants on the board of West Lothian Partnership, we have tenants on the board of the weekly housing group. In terms of getting the message out there, I think that is hugely important. We have put in a welfare reform hotline as part of the weekly housing group’s measures, so as a subsidiary of the group, we are able to access those services. We have had 3,000 calls to that welfare reform hotline from people who have been genuinely worried about the impacts of the bedroom tax. We have been able to give good advice and assistance. In terms of publications, we put out regular publications to again maximise people’s understanding in terms of the benefit. We have secured as part of our arrangements with the weekly group two officers now, one of whom is a field adviser, who goes out and gives specific advice to tenants about fuel tariffs. We have been able to negotiate a deal with Scottish Power as part of our weekly group for reduced tariff arrangements for our tenants to really help in that respect, and our welfare benefit site advisers are going out on a referral basis and speaking to people, as Alison is suggesting, to make sure that they understand all of the available entitlement that they have to mitigate against the bedroom tax.
Mike Bruce
Yes, we have four tenants on our board directly elected by tenants, every two years to stand down, and it goes on like that, and we have done for the last 20 years. We also have a tenant participation committee that ranges in numbers between 15 to 20 people who meet every couple of months to discuss the issues they are facing, as in advice or assist on consultation and policy matters, and obviously our strategy on the bedroom tax has been informed by that. We also created a specific post of a welfare rights officer and she has been very successful in engaging with people. We carry out weekly surgeries now in, I think, Whitburn and Broxburn and they have been quite busy, so that, along with the traditional methods of communication, has assisted us in engaging with tenants, and indeed I hope tenants to engage with us, but still, we are not covering everybody, as Alison says, and it is a constant battle.
Chair
Can I just clarify Alison’s point about sometimes it is difficult to let a house and that it maybe allocated to a single person on the basis that the alternative was just simply to leave it empty, because there was nobody that would qualify for it that wanted it? Were any of you doing that?
Andy Ashcroft
Certainly we have had experience in the past where if there has been a low demand for a property, you would absolutely look to try to match it, but you would look at every opportunity to make sure you were giving that property to the best fit. Sometimes it is not always possible, but certainly from my—
Chair
You would rather have it under-occupied than have it empty?
Andy Ashcroft
Absolutely.
Mike Bruce
Absolutely.
Andy Ashcroft
Absolutely, yes.
Chair
Unfortunately, nodding does not get recorded by Hansard, so it can be recorded that all the three witnesses from the housing associations agreed that yes, they did do that on occasion. Mike.
Mike Crockart
I think Sandy was going to respond to the question I asked.
Chair
Oh, sorry.
Sandy Young
Yes, we have done exactly the same in terms of communicating with tenants. We have people on our board and we have a tenants’ focus group that meets every month with 15 or 20 people on it as well, and welfare reform, not just the bedroom tax, has been a key issue for them. We took the decision about six months before the bedroom tax was due to kick in that we would undertake to visit every single tenant who was affected by it—and that was a huge piece of work—because we felt that we needed to do an individual thing. Everybody had to see and hear how it would affect them individually, because the problem that I think is happening is that we knew before the bedroom tax was due to kick in if you just said you were going to be affected by this in a kind of general, broad-brush method, a lot of people would think that they were not affected by it and they did not understand how it worked. In terms particularly of families where the ages of the children that are living in houses means they have been put into separate bedrooms, going out and explaining to them that policy now means that what should be happening is your 15-year-old boy should be moving in with your two-year-old boy because of this and that means you have a spare bedroom, and explaining that to people had to happen, I feel, face-to-face, and that is why we did that. We went out and spoke to everyone affected and that was a huge piece of work, but that was the way that we primarily engaged with tenants rather than having groups. That all happened, but I felt that it was more important to speak to everybody on a particular basis about their circumstances. We had a lot of success with that, hence why a lot of people have ended up finding the means to pay it, because they have had the advance warning, which of course now brings about the issue for me is what happens with these people that have been paying later on?
Mike Crockart
Yes, at the time of introduction, the DWP talked about various means that they felt would be able to defray some of the expenses, whether that means moving into the private rented sector, increasing their income or taking in a lodger. In your experience as housing associations, what of those choices have any of you had to manage or chosen to do?
Mike Bruce
I have not heard of anybody taking in a lodger, but that may have happened. The idea that it is cheaper, they can defray their costs by moving into the private sector, yes, they could. Again, not much experience of that, but as the Chairman said, I think in the earlier session, the rents are significantly higher in the private rented sector, so any saving to the total welfare bill, which is the raison d’etre of this policy, is just nullified. In fact, in some cases it could be adding to it, so I have no great experience of that.
Mike Crockart
But we are talking about the effect on the individuals, and so yes, the argument that it is more expensive for the individual.
Mike Bruce
Oh, for the individual, yes.
Mike Crockart
So you do not have any experience in your associations of people choosing to do it?
Sandy Young
For us, it is one of the few times that my staff have found it very difficult to give people real options when they went out to speak to them about this coming up, “Move house.” “Where?” “Get a job.” The bulk of our stock is based in Craigshill, which is one of the areas that is high on the SIMD index and unemployment is already very high in that area, so if they could get a job, they would go and get a job. As for taking a lodger in, it has just not been an option. We found that these three options have not met with any success and when we explained that to tenants, it felt as if we were giving them no option at all. The number of people that have moved has been very few and the options that have been laid out, “This is what people can do” have not really been options, I feel.
Andy Ashcroft
I would concur. No interest whatsoever for lodgers. In terms of the private sector options, just to echo what Mike said, I think in some cases that would increase the welfare bill. In my experience, I think what people are faced with is a choice of going into a private sector where, for example, they may be asked for a substantial deposit and they simply do not have the financial wherewithal to cope with that, so very little experience of anybody wanting to exercise those three choices, and frankly, certainly from our perspective, people are more inclined to want to sit tight at the moment, as I made said earlier.
Mike Crockart
I will come to you in a second, Alison, but if I can asking the housing associations, one of the other options is the rehousing. You have each talked about rehousing within your own housing stock. Is there much in the way of cross-co-operation between housing associations to look at the housing stock as a whole? Do people move between different housing associations?
Andy Ashcroft
Yes, they do. There is a common housing register with the council and ourselves in Weslo, so you have that and there is also the HomeSwapper, so there is the ability to move but everybody is experiencing the same problem, a glut of people looking to downsize. In fact, there is a glut of people who should be downsizing according to this policy, although a fair number of them do not want to, but the reality is again that there is nowhere to move them to. It is not as if you are finding that there is hundreds and hundreds of people who are desperately looking to downsize with the corresponding number looking to get into a bigger property. It is just not happening. The policy is not working on the ground, certainly in West Lothian, and from what I can see nationally as well, so whatever things we put in place, whether it be home swap—I have heard all sorts of different ideas about having people get together and try to swap from different organisations. We facilitate that, we are quite happy for that to happen. Under certain circumstances, we will even consider if someone has rent arrears to allow them to move, which in the past we would not have done, because obviously it is counterproductive to keep someone in somewhere that they can barely afford when they could move somewhere that is cheaper, but the reality is it is just not happening on the ground, that the demand for this is not as high as you would expect. Yes, there is integration between the associations and the council, but it is not making much difference for the tenants.
Andy Ashcroft
Even when you incentivise, and in some cases we proactively incentivise people to be able to move out of a situation where they are under-occupying, what you will find is people will say, “This has been my family home for the last 30 years. I brought my kids up in this home. Why should I leave this property?” and it is a difficult thing to argue with.
Mike Crockart
Alison, what is your perspective on it?
Alison Kerr
To move into private takes me back to the thing, the tenant choice, why in my own case it took 25 years to get the house I am in, so why should you even think about moving into the private rented sector? From my understanding of the way that local authorities pay local housing allowance, we find that the amount they have to contribute to the rent is even higher than everybody expected to contribute to the bedroom tax, because you do not always get your full amount of rent paid automatically for you in the private rented sector, so that is a dilemma for tenants to think about. I believe local authorities have taken a stance where if you have incurred arrears because of bedroom charge, you will not be evicted, but finish the sentence off, “You will not be evicted only if you have shown or proven that you have taken everything else into consideration” and two of the things that you must take into consideration is downsizing, which we have heard from the panel just is not an option among the majority of housing providers, and the other one is take in a lodger. I am sorry, the people that made that up, would they just take somebody in that should not be in their family unit? I do not think so. So taking in a lodger is totally, I would say, unacceptable. Then what is the implication or the responsibility for that lodger? For example, if I take a lodger in and he cut her throat or she cut our throats, is it the council’s fault? So does my family then say to the council—it is very vague and very ambiguous.
Mike Crockart
What about the awareness of DHP and ability to apply to that? We have heard in the previous panel that there are a lot of people that despite being contacted to say, “Look, there is a fund you can apply to” are just not engaging at all with that process.
Alison Kerr
I think originally when DHP was mooted, there was a very great deal of uncertainty as to how much local authorities had in their pot, and that changes daily and monthly and they still do not know how much they have in their pot. I think I am not saying it was low-key purposely. However, I believe a lot of tenants would have thought, “What is the point? What is the point in applying because I will not get it anyway”. But then again, you are back to the difficult problem of engaging and tenants who just are confused or vulnerable, they may have learning difficulties, they may have a disability, so it is not just a case of people do not want to engage, sometimes there is a huge majority of people that just cannot engage anyway.
Mike Crockart
We have heard from councils and from housing associations that some people are, by whatever means, managing to pay the extra rent that flows from this. What choices are you finding that tenants are making to be able to do that?
Alison Kerr
To pay for under-occupancy, to pay it so that you do not have arrears on your rent account, yes, people will strive to do that, but the real ramifications in the home is the heating is only on for an hour in the afternoon and that is that. I am not exaggerating that point. It is not on in the morning, the water is on the morning pretty well, the heat is on in the afternoon for one hour and that is it. They do not have meat and two veg and whatever else, maybe have a tin of soup and a tin of rice and that is it. That is my own personal experiences, but that is also, I would say, duplicated by numerous people that I have spoken to.
Andy Ashcroft
There is certainly evidence that we are getting from housing officers on the doorsteps in terms of people having to make stark choices and in some cases, as Alison is suggesting, they are cutting back on their food bills, which is why the likes of Aldi’s and Lidls now are doing a roaring trade, because they are offering cheaper products and people are naturally migrating to that, where they are trying to make some savings to make up the deficit of their rent through the bedroom tax. So absolutely, dramatically people are making those choices. In fact, if you start to look at West Lothian in particular, food banks are starting to emerge in the area. In this day and age, 2014, it is a shocking indictment that people are having to go to foodbanks, so I think that is not something unique to West Lothian, it is happening all over the country. I think it is a real stark set of choices that people are making. That would be certainly my view.
Graeme Morrice
Can I just pick up on that point you raised, Andy, the issue of foodbanks? Do you, as housing associations—I am not sure whether you have the ability to do it—refer tenants to foodbanks if you determine that they are suffering poverty?
Andy Ashcroft
I will talk specifically about the West Lothian Partnership. We are about to embark on referral arrangements for the two foodbanks locally. I think if I am being absolutely honest, Graeme, our concern is why are people having to use foodbanks in the first place?
Graeme Morrice
Of course.
Andy Ashcroft
You could create a bit of an industry around foodbanks if you are being honest. I think the core issue for us is to get underneath why people are having to access foodbanks and then try to address those issues. Certainly for us, it is about getting good, professional referral arrangements in place to absolutely see if we can help people to avoid the necessity of having to go to foodbanks across the country. That is a real challenge.
Graeme Morrice
Yes. Mike?
Mike Bruce
Yes, we have engaged heavily with the foodbanks as well and the welfare rights person we appointed as our key focus. It is a regular occurrence to be sending people along there, and I would echo what Andy has been saying, it is absolutely savage to see in this day and age.
Graeme Morrice
Yes. Sandy?
Sandy Young
Yes, again the same as my colleagues here, we have had to engage with foodbanks, but just as Andy is saying, we need to try to go deeper and see what is it that is causing that. We did not internally recruit a money adviser or a welfare benefits adviser. We were lucky enough to apply and be successful in getting funding from the Scottish Local Aid Board to get a post to do that. They work with CAB and they will refer on someone if need be, but we have also been discussing—I must say only briefly, but it was something that we were considering—looking at whether our subsidiary could possibly run or aid with a foodbank locally, because again, Craigshill, the local one is in Dedridge, I believe, so it would have been handy to have one much closer to home and that is something we were looking at. This whole issue, it has never been something that I have come across. The housing officer is coming back and reporting that people are asking about how do they pay the bedroom tax, “I am going to have to cut what I eat” or, “I am going to have to cut the fuel bills” and a common thing that has come back has been, “We have been quite lucky that the winter has not been so severe”. So presumably they are cutting how they are heating their homes.
Mike Crockart
May I ask the housing associations how well you are managing to work with local authorities in trying to deal with it, because there is the basic difficulty of you deciding what rent to charge and local authorities who get housing benefit, so there is a disconnect here. How well do you manage to work together and how has this particular crisis helped or hindered that?
Mike Bruce
We work with the local authority on many, many areas, as I am sure you are aware, but our closest engagement in this matter is with introducing DHP applications and encouraging tenants with DHP applications and I would hope we have been working quite well with the council on that. In terms of the rents and the fact that we would be putting rents up or one would expect rents to go up annually, rents are not going to go down, so there is no indication that the rent increases are going to be depressed. We have talked earlier about the hidden costs and in some cases not so hidden costs that we are all facing to introduce measures and to maintain measures to deal with the impact of the bedroom tax. That is not going to go away and that is a huge cost for us and it does not give us much room to try to minimise rent increases against that background. That is not going to get any better in the foreseeable future and especially with the introduction of universal credit.
Andy Ashcroft
We are very much keen to engage and do so with the local council in West Lothian around clearly maximising DHP entitlement. I think Alison’s point earlier was well made, that the council this year have struggled a wee bit in terms of they have been given an allocation and then that allocation has changed so their feeling, their outlook in terms of how they were going to award DHP has, if you like, been fluid. They have had to change their award criteria, the length of time that people were given awards and I think it is pretty clear to me that they are being more generous as we get into the final quarter of the year than perhaps they were at the start of the year. That will obviously have a positive impact in terms of our customers. In terms of joint liaison on benefits, I can certainly talk from a Glasgow perspective, that we have an ongoing dialogue with the local council. We obviously try to engage locally with West Lothian as well, because one of the things that RSLs do need to do is to get benefits processed quickly, so benefit processing is a particularly important topic for us. Councils traditionally have a target of four weeks to process benefits, but we find with the direct intervention, direct liaison, that period of time can come down to 10 or 11 days. That is the type of activity that we are very, very keen to promote, working around benefit processing. Quick processing impacts on their income and it is certainly something that we are very keen to explore.
Chair
I wonder if I could start to wrap matters up. We discussed earlier on the question of full mitigation of the bedroom tax and the suggestion has been that just simply raising the upper limit on DHPs would cover that because then there would be unlimited amounts of money through DHPs, but we have already heard that quite a lot of people do not engage with the landlord or the council through DHPs. Is there another method that you think could best be used by the Scottish Government to mitigate the impact of the bedroom tax?
Andy Ashcroft
I think it was said in the earlier session: offset it completely. That is the answer. That is absolutely the answer. Offset it completely.
Chair
Just what, send you a cheque?
Andy Ashcroft
That would be very welcome, yes.
Chair
You think that is the best way of doing it?
Andy Ashcroft
I cannot think of any other way, to be honest with you.
Sandy Young
I would agree with Andy on that completely, because the difficulty we have found, possibly because of the DHP circumstances changing within the council, is that not all of our tenants are engaging and applying for DHP, despite the real efforts of the housing officers to get that to work. My concern would be that you plug all that money in the DHP. There will still be tenants, perhaps through pride or whatever reason, who are not going to go ahead and make that application, which means that the money is not going to be completely spent. The council, as far as I know, have been quite generous recently with these payments and despite that, we still have hardcore tenants who we are struggling to get to sign a DHP application form. It might be the other option would be to allow some straightforward DHP process that was just a nomination or a recommendation by someone like a housing officer rather than have the tenant themselves have to fill out a detailed income expenditure form and sign on it. They are trying to take active steps to prevent the situation they are in. If you could make the DHP application process one of just a straightforward referral that might work, but as it stands at the moment, I would agree with Andy, if you want to be as blunt as to say that, yes, write us a cheque and that will cover it for our tenants.
Chair
How do we tackle the question of moral hazard and cover those who have paid already? Is it just simply by some system of refund?
Sandy Young
It would have to be. I do not think it is fair at all for these people who have, in some cases, borrowed from family members or have scrimped and saved or spent money that they have managed to put together and tried to do the right thing in their mind to then find out that others have not paid. We do have some tenants who point-blank for political reasons have sat down and said, “I am not paying this” and I have a certain sympathy with them, but by the same token, is it fair that they then have their arrears written off, whereas someone who has worked very hard to try to make that payment gets nothing back? They are penalised, so I think there would have to be a series of refunds.
Mike Bruce
Yes, it is a huge problem in the making. They are few and far between, but even if there were people who could afford to pay the additional charge, that would make it iniquitous to be saying, “Well, we are going to pay this debt for some parts of the population who have incurred it, but we are not going to pay for others, because you can pay it”. There is no real logical way to defend that, other than I would think a blanket payment of the charges that have been incurred—I cannot think right now of any way other than a refund to recompense those who have made the effort to pay. I am not suggesting that other people have not made the effort, but there are all sorts of reasons for not having paid.
Chair
You could cope with that, you could administer that, could you?
Mike Bruce
I think we could, but the business that Sandy mentioned about a referral, I think that would go some way towards breaking down the reluctance of some people to apply for any kind of benefit of that nature.
Chair
Yes, that would potentially operate a DHP system going forward, but then I just wanted to clarify, because we have to make recommendations about this, and I just wanted to clarify that in your view, you would be able to make a refund system work—
Mike Bruce
Oh, yes.
Chair
—because you will have records presumably of what people have been paying and so on? Again, nodding does not cut it.
Mike Bruce
I am sorry, I am nodding again, because I was nodding in advance of saying what I am going to say, which I am saying right now.
Chair
Fine.
Mike Bruce
I think we could cope with that particular problem if you said to us a yes.
Chair
Right, okay.
Andy Ashcroft
Agreed, yes.
Sandy Young
There may be the difficulty though of anyone who has given up their home and moved away, how do you—
Alison Kerr
I know about this.
Andy Ashcroft
—pursue them and refund their money? I mean, we have seen instances where for some of the properties, and you will get this right through the social sector, tenants do not always go through the process of terminating their tenancy by handing in keys and filling out a form. They maybe think, “I cannot afford this. I am just going to up sticks and leave” and then we take the property back and we do not have any details for that tenant, so it is potentially the small problem that some people who have given up their tenancies will have built up arrears.
Chair
But there is not another method that would cover them, is there? If there is difficulties with the method of simply refunding, do you have a better idea I think is what we are—
Sandy Young
Just back to the original one, which is to say what is your cost and then just cover the whole thing and that deals with any former tenants, because the other problem as well with a former tenant is that if they have built up rent arrears through the bedroom tax, they may go along to another landlord and say, “I would like to be considered for this property”. “That is fine. I will get a reference from your previous landlord.” “Sorry, they have rent arrears.” How do you deal with that problem? To me—
Chair
But presumably these are just administrative problems that you can sort out. It does not seem to me that there is anything insuperable in any of that.
Sandy Young
No, absolutely, but the difficulty there is we would be quite happy to sort out these problems, but how can I sort them if I do not know about them? If that tenant went to somebody else and they do not come to us about it, then I cannot fix that for them. We will do whatever it takes to get this done administratively. We have records, but it still needs people to engage.
Mike Bruce
We could perhaps in theory—and it is hypothetical—present the paying authority with a list of former tenant addresses that have incurred a debt and we could make a claim for that and they could make good that debt so that in the fullness of time, if that person did come to seek a reference, the reference would be clear inasmuch as there would be no arrears on it. But there are ways around it, you are absolutely right.
Chair
Alison, do you want to make any comment on this area?
Alison Kerr
Yes. The DHP form, I do not know if any of you have seen that form, but if you were previously on full housing benefit, you obviously met the very stringent criteria to be awarded the full benefit. Then because of the circumstances, you incur under-occupancy, then you contemplate filling a DHP form, which can be quite demeaning, because it is asking you everything that you spend your money on, everything. It asks how many times if you go to the shops and you go to shop in Asda or Tesco or whatever and you cannot even very well remember how much it was, because you cannot really remember what you had to get that week, so to try to quantify that into a monthly is very difficult. You have your basics, your gas, your electricity, you know how much that is and you pay it by direct debit, but the rest of it can be very variable, so it was very difficult to quantify that and put it in. Then you take the courage to do that and you put it in and then you are not successful and it is like, “Well, what is this all about?” But to go back to the question, there would definitely need to be a method to recompense or rebate the people who have paid the bedroom charge up to now if that may be on the table—that local authorities now get it and other people get it back.
Chair
Okay. Look, I am conscious that our sound recorder has to pack up to get away to the next hearing, the next venue we are having, but finally, as we said to the previous group, are there answers that you had prepared to the questions that we have not asked, any points that you feel that we have not touched on that it would be remiss of you to leave us without having raised?
Andy Ashcroft
I would just make a general point, which is around what we would probably term as a verification framework for housing benefit, so we have trained housing staff over a number of years to spot potential issues with housing benefit claims so that we get what we term as clean claims, so that when those claims go into the housing department for processing, they are in a fit state to process. My understanding is we have worked very closely with other local authorities to develop a verification framework, and the DWP have not made it entirely clear about whether they will give due credence to that going forwards. So, as the responsibility is moved to DWP, they do not quite seem to have grasped that there is a lot of this activity going on between RSLs and local authorities to try to make that process as smooth as possible, because it really does have a huge impact on the number of days it takes the local authority to process. If they were to get a clean claim, you would argue they could process that claim quite quickly. If they have to come back and ask for more information about earnings and so on, that can simply stop the claim, it stops the clock and it can take four or five or six weeks to obtain that processing, and that is where those types of thing really need to be thought through.
Mike Bruce
A couple of things I would maybe like to touch on, just touching on what Andy has said there, the interface between council and our housing officers and our staff is absolutely crucial. We have had a scheme in place for the last 18 years or so where we have had a member of council working in Weslo’s office and we have paid back the salary in order to provide for our tenants a one-stop shop scenario. That is going to have to stop with Universal Credit. That will not happen any more. That will be an enormous loss. I touched on Universal Credit, because that is a timebomb, and the way that we have talked earlier about some £200,000 in our case of additional rent charged on the bedroom tax, if Universal Credit comes in as planned in 2017, we are going to be looking at physically collecting some £3.5 million a year in rent, whereas before it came to us in the housing benefit. Now, given that and that tenants are going to be expected to claim online, I think we are building up a massive issue of potential arrears for ourselves. The key issue, apart from the issues we have touched on here, which will be writ large, and one of the perhaps unintended consequences is that our credibility in the eyes of our funders is going to suffer. The people that we go to to raise money for building new houses will have their perception of our creditworthiness altered negatively if we are going to be in a situation where we cannot collect as much rent as before. That is going to impact on the margins that they charge us to borrow money and the absolute consequence of that is rents are going to rise. If we are having to borrow money at higher rates, rents are going to rise. So there is not really any good news.
Chair
Alison, any final points that you want to make?
Alison Kerr
I don’t know, you could probably sit here all day and talk about it.
Chair
I have.
Alison Kerr
A huge part of the work of the Tenants’ Panel is working closely with the council officers for future investment in our communities and in our stock, and obviously they are fearful not currently at the moment, not maybe this year or next year, but Universal Credit is coming. It is definitely going to come and Andy is right, the bedroom tax is only the tip of the iceberg. Once Universal Credit comes in and your personal independent payments, I just dread to think how much investment in your stock within your communities is going to have to be drastically reduced.
Chair
Okay. Thank you very much for coming, and I close the session. Oral evidence: The Impact of the Bedroom Tax in Scotland - Continued, HC 937-iv 2