Scottish councils could be facing a £25 million hike in rent arrears because of the so-called ‘bedroom tax’.
A survey of all local authorities in Scotland carried out by Cosla has revealed the significant financial pressures being placed on councils because of welfare reform changes to housing benefit introduced 100 days ago by the UK Government.
Damning statistics show that rent arrears for April are up £2m on last year’s total, giving rise to the assumption that if present trends continue the country is looking at a £25m increase due to this policy per year.
The bedroom tax reduced housing benefit by 14% for tenants with one extra bedroom and by 25% for those with two. Cosla said the changes are already leading to sharp rises in rent arrears.
Of the rent now due to be collected from tenants affected by welfare reforms, 60% of councils reported receiving 40% or less and 80% reported receiving 50% or less.
With the exception of one, all councils with their own housing stock reported an increase in rent arrears, with three-quarters reporting that non-payment of rent following under-occupancy changes is directly responsible for the rise in arrears.
There has also been a sharp rise in requests for discretionary housing payments for those in particular need.
Scottish councils received more than 22,000 requests by the end of May. For most local authorities, this is more than four times the number of requests received in the same period last year.
The survey has prompted Cosla president David O’Neill to call for urgent reconsideration of this “horrendous” policy.
“It will be exactly 100 days tomorrow since the under-occupancy changes were introduced and I derive no pleasure whatsoever in seeing that our predictions about the dire consequences of this ill-conceived policy are starting to be borne out.
“We always said that any saving to the UK Treasury would be reflected in additional costs and financial pressures for tenants and councils. Unfortunately that is exactly what is now happening.
“Councils are being required to reduce housing benefit, only to see rent arrears rise sharply and tenants experiencing distress.”