This weekend marks the two month anniversary of changes to the welfare system— including the spare bedroom subsidy (or bedroom tax as it’s more commonly known) and the piloting of the benefit cap in four London boroughs. These changes are already affecting hundreds of thousands of people across the country. Of course, we are only in the opening stages, but it has been interesting to see articles popping up in the media, reporting on the impact of these reforms.
Unsurprisingly, it’s not good news. Housing associations have reported that tenants affected by the spare room subsidy are failing to cover the shortfall in their rent. Councils across England have also reported a huge leap in the number of applications they have received for discretionary housing payments (DHP)—the emergency hardship funds available to people in urgent need—with some councils receiving over five times more applications since the introduction of the bedroom tax.
We are also hearing about the additional costs incurred by these changes, which are supposed to be delivering savings. For example, in the north east, three-bedroom homes are lying emptybecause the under-occupation penalty means that families cannot afford to live there. On the flipside, business for those offering temporary accommodation—including bed and breakfast owners—is booming, with local councils having to pay more and more to put homeless families up.
There is also news of people fighting back. In Leeds, the local council is looking to get around the bedroom tax with a heavy dose of semantics, re-classifying some bedrooms in social housing as ‘non-specific rooms’. They argue that it is cheaper for them to keep tenants in ‘under occupied’ homes than it would be to chase them for additional rent, evict them or find them a new home. Several legal cases against the bedroom taxand the benefit cap are also underway, on the grounds that they are discriminatory. Finally, bad news for the Department for Work and Pensions, a Whitehall audit by the Major Projects Authority has found that several of Iain Duncan smith’s key upcoming reform- including the introduction of the Universal Credit and the Disability Living Allowance, are at risk of failure.
So two months in, the picture is mixed, with those delivering the changes and those affected by them facing a bumpy ride. But what does all this mean for charities? Anecdotally, we are hearing that a growing number of people are approaching voluntary organisations asking for help and advice. These charities are pushed to provide extra resources to cope with this demand, with many struggling on less income than before.
This provokes questions about how charities can adapt and respond to these changes, and learn to do more with less. This is precisely the title of an event we are holding in June, looking at how the sector can innovate to respond to the challenges they face, how non-government funders might fill the gaps left by government, and more broadly whether there is a future for more costly face-to-face advice services. These are big questions for which there are no simple answers, but we have some excellent speakers (including from the CAB and Shelter) to help us unpick some of the issues. If you’re interested in joining us, please get in touch.