Welfare reform is here – now what?
4 April 2013
1 April 2013, the Monday just gone, was the dawn of a new era in welfare. Many changes which have long been debated came into practice. But the time for arguing is now over, as hundreds of thousands of people struggle to get used to changes—invariably cuts—to their social security.
So far, the change receiving the most attention is the end of what is officially called the spare bedroom subsidy, though often quoted as ‘the bedroom tax’. Over half a million people claiming housing benefit are going to be affected; if they are deemed to have one spare room, the amount of rent eligible for support will be cut by 14%. If they have two or more spare rooms, the cut will be 25%. The long and short of it is that a lot of people stand to lose a lot of support.
The policy idea is that people living in social housing with spare rooms will move to a smaller property, freeing the larger ones up for others in need. We all know there is a desperate lack of social housing stock, particularly at the one bed end of the scale—in Hull for example there are 5,500 people chasing 70 one bedroom properties. So, in reality, tenants are going to be left to make up the shortfall in their rent any way they can. Again, the policy motive is that these people get a job, or work more hours. I hope I don’t need to go into why for many people this isn’t an option. So we can only speculate whether this money will come at the expense of other essentials, such as heating or a healthy diet, or whether they will have to borrow money (from where?) to make ends meet.
I have previously pondered whether we might call what we are facing today a ‘housing apocalypse’ (crisis doesn’t quite seem to cover it). The history behind it is long and complicated, though at the heart of it lies a failure to build enough homes for the UK’s growing population to live in. I also mentioned a piece of work NPC is doing with the Smith Institute, commissioned by Peabody Trust, looking at the relationship between housing and philanthropy. As part of this work I recently attended a roundtable which brought together people from the philanthropy world (eg, advisors and representatives from trusts and foundations) and the housing world (eg, academics and housing association representatives).
I am pleased to report that it was a fascinating morning—it gave the strong impression that two groups that have not shown much interest in communicating effectively really got a chance to do so. The message from the housing side: ‘times are very tough, and they’re only going to get worse. We are having to think creatively about how to get through this, and support our tenants. We need help.’ From the philanthropy side, we heard about a reticence to get involved in housing, as it is ‘too big’ and an area where they feel it is hard to have an impact and gain any sense of achievement. I think they’d like to be proved wrong here though, and the overwhelming message was ‘we need a clear idea of what is being asked of us.’
So, there is a long way to go if we want to bring the two sides together in an impactful and appropriate way. The next step will be a selection of essays looking at this issue from different perspectives, to be published in the autumn. By this point the bedroom tax—along with all the other welfare changes–will really be starting to bite, so we hope this work will come up with some important and life-changing ideas.