The UK Government's plans for dealing with the impact of the so-called 'bedroom tax' are "not based on any rational assessment of need", according to a report out this morning. MPs on the Public Accounts Committee have been looking at what ministers say is the ending of a 'spare room subsidy'.
– Public Accounts Committee Chair Margaret Hodge MP
The Department of Work and Pensions says it can't accurately predict the effects of its housing benefit changes either on individuals or on the housing supply. Instead it will rely on a 'wait and see' approach and monitor changes in homelessness, rent levels and arrears.
But even small reductions in housing benefit can have a severe impact on the finances of the poorest people. It is not clear whether the additional £390 million set aside to fund Discretionary Housing Payments over four years will be enough. This figure was not based on any rational assessment of need.
The discretionary payments could help people who lose benefits as a result of the rule change if they cannot move to a smaller house, for example if their home is adapted to help cope with a disability. In Wales, the former Housing Minister, Huw Lewis, wanted control of the payments devolved.
– Former Housing Minister Huw Lewis AM
I believe that such a move would enable us to better protect vulnerable people and prevent homelessness. We do believe that being closer to the ground here in Wales and understanding our housing situation much more intimately than at Westminster we could do a better job of alleviating at least the worst aspects of welfare reform through an intelligent use of Discretionary Housing Payments.
I am not under any illusions of the scale of finance when it comes to Discretionary Housing Payments – they are nowhere near the amount that is required, but at least we could spend them more intelligently.
Mr Lewis also promised a fund of £750,000 to mitigate the impact of welfare reform in Wales. He was speaking on the day of the cabinet reshuffle, when Carl Sargeant became the new Housing Minister. The extra money was welcomed by Community Housing Cymru, which represents social landlords.
– Community Housing Cymru Chief Executive Nick Bennett.
It is important that this money is used sensibly. Affordable credit options and good timely advice will be key to helping tenants through these changes. In addition to providing affordable loans and opening saving accounts,
With more than £200m in capital funding available to the Welsh Government over the next two years, investment in new housing is key. Building new, affordable one and two bed homes will not only help with the problems caused by the ‘bedroom tax’, it will create jobs and play a vital role in regenerating communities across Wales.