Ten years on and no plans to axe the bedroom tax

Houses on St Anne's council estate in Bristol, dating from the 1920's, which now has a mixture of council and privately owned homes. PA
Ten years after the bedroom tax was introduced, has the policy worked? Credit: PA

By Talia Shadwell, ITV News content producer

It has been a decade since the so-called 'bedroom tax' was introduced, to widespread controversy.

But ten years on, there appears to have been little appetite to find out whether the under-occupancy penalty actually worked.

Despite a growing housing crisis shaping up to be a key election battleground, neither the Conservative or Labour Parties would commit to any plans to review or abolish the bedroom tax, when asked by ITV News.

The policy, officially known as the 'removal of the spare room subsidy,' is perhaps better known by its nickname, the 'bedroom tax'.

The government says the policy, which took effect a decade ago, encourages people to move out of socially rented homes that are too big for them to make spaces for larger families.

Figures show despite the disincentive, hundreds of thousands of social housing households still pay today, and critics told us they are troubled by the lack of interest in reviewing the policy given the pressure of the cost of living crisis.

The government has confirmed it has no plans to review or abolish the policy, which was conceived at the height of the austerity era of welfare reforms.

It confirmed no official research into assessing the financial impact or success of the policy had been carried out in the last eight years, and ignored our query on whether any more research into the policy's impact on people's lives was planned.

Four times, ITV News asked Labour whether it stands by its past public commitments to abolish the bedroom tax if the party took power.

And four times, Sir Keir Starmer's party didn't respond, on a policy its MPs had in the past labelled "cruel."

But ten years after the bedroom tax was introduced, the national social housing stock continues to shrink.

Home-building is lagging, mortgage-holders are facing interest rate hikes, private rents are rising, and so are no-fault evictions, according to charity Shelter.

And this week, official figures revealed a record number of children in England are living in temporary housing.

All this has sharpened focus on how lawmakers plan to address Britain's deepening housing crisis.

But one issue appears all but forgotten by the major parties ahead of an election.

Ten years of the bedroom tax

This April marked a decade since the policy, known officially as the ‘removal of the spare room subsidy,’ was introduced.

The bedroom tax policy was conceived by the Cameron-Clegg coalition government during Britain's austerity response to the global financial crisis, and first took effect in April 2013.

As controversy over the concept grew, the Liberal Democrats would later distance themselves from the policy.

What is the bedroom tax?  The bedroom tax applies to people of working age, who receive housing benefit and live in socially rented accommodation. 

Households with one bedroom deemed ‘spare’ lose 14% of their eligible rent from their housing benefit, and those with two or more extra bedrooms lose 25%.

According to the rules, adults in a couple are expected to share a room. Two children aged under ten are also expected to share a room, regardless of its size. Siblings of the same gender are expected to share until they are 16.

This means a room is deemed spare even if it is in use, with children sleeping in their own separate bedrooms.

Households are exempt if one of the children has a disability or medical condition that means they cannot share.  

A room is not classed as spare for adults who have left home to go to university or to join the armed forces- and can prove they will occasionally return to the family home.

People are also deemed to have a ‘spare’ bedroom following a death in the household - applying, for instance, to parents who lose a child in a two-bedroom household.

The bedroom tax doesn’t apply for a 52-week grace period following bereavements.

The government’s guidance for tenants seeking to avoid being squeezed by the bedroom tax, includes: downsizing into a smaller home or ‘home-swapping’ with other council tenants, asking dependents – for instance, working adult children - to contribute to housing costs, working extra hours to make up the gap, or by bringing in a lodger. 

Why is the bedroom tax controversial?

Critics say it punishes social housing tenants who rely on capped benefits but also can't afford to enter the private rental market, and fails to take into account decades of shrinking social housing stock. 

But the Conservative Party has maintained it is a fair way to encourage social housing tenants to downsize from larger homes: to free them up for bigger families in overcrowding situations, and, to incentivise benefits recipients to find work. 

Criticism of the bedroom tax has tended to point to the Right to Buy policy, which allowed tenants to buy council homes at a discount.

Margaret Thatcher's flagship 1980s policy converted vast swathes of Britain’s social housing tenants into homeowners, and many of those properties have since become private rentals.

In the decades since the policy's conception, social homes have been sold faster than they are being replaced. 

But all of this comes against a backdrop of stalling housebuilding that preceded the bedroom tax's introduction, over successive Conservative and Labour governments, contributing to record house high prices.

As they prepare for the next election, the two major parties are targeting housing supply.

Prime Minister Rishi Sunak and Housing Secretary Michael Gove have vowed to relax planning rules to allow for more property conversions, build 30,000 social homes a year, to foster more homebuilding in cities and urban areas - without 'concreting over the countryside.'

Labour leader Sir Keir Starmer's party has promised to allow development on unsightly parts of the greenbelt, and pledged to restore the 300,000 new homes a year in England abandoned by Mr Sunak last year, under pressure from Tory backbenchers.

Prime Minister Rishi Sunak and Minister for Levelling Up, Housing and Communities, Michael Gove. Credit: PA

Some state-driven property market interventions designed to help first-time buyers, such as the now-ended Help to Buy scheme, have been partly blamed for driving up the price of new builds.

And in recent years, concern about housing regulation has never strayed far from the headlines.

The horror of the Grenfell Tower disaster and the ensuing cladding crisis, and the death of toddler, Awaab Ishak, in mouldy social housing have all exposed deep faultlines in Britain's housing landscape.

The government has promised crackdowns on inadequate social landlords following Awaab's case, and has lately promised support in other pressure areas driving household's rising cost of living - rolling out an energy support scheme, and promising childcare reforms.

But absent from the conversation so far, has been the bedroom tax.

Asked whether the government planned to review the policy, in light of its acknowledgement Britain has a housing supply problem, a spokesperson confirmed to ITV News there were no plans to abolish or review it.

It said the number of new homes starting construction in England increased by 16% last year, compared to pre-pandemic levels.

A total of 232,820 homes were built last year, which the government said was the third highest yearly rate over the last 30 years.

While Mr Sunak had recently dropped the official housebuilding target, the 300,000 new homes a year "ambition" remained, the government spokesperson said.

They added: “We have delivered more than 630,000 affordable homes in England since 2010, including 162,000 for social rent, and we are committed to increasing this number even further.

“Our ambition of delivering 300,000 new homes a year remains and we are investing £11.5 billion to build more of the genuinely affordable homes the country needs.”

Party leader Sir Keir Starmer with shadow chancellor Rachel Reeves Credit: Stefan Rosseau/PA

The Scottish Greens have said it would be a "gross act of betrayal" if UK Labour publicly drops its commitment to ending the bedroom tax.

The party called on Labour to urgently clarify its position after shadow chancellor Rachel Reeves refused to say whether a Starmer government would end the tax, when she was asked on the BBC Today show last week.

ITV News has repeatedly approached Labour's headquarters for comment on whether a Starmer government would scrap the bedroom tax- previously a cornerstone party position- but received no reply.

The lack of clarity on the bedroom tax comes after Sir Keir confirmed he would keep the Conservatives' two-child benefits cap policy in place if Labour was elected.

Labour's leadership sought to keep “unfunded spending commitments” out of policy plans set to form the basis of the party's election manifesto.Who is paying for the housing gap?  

The governments of Northern Ireland and Scotland have taken extraordinary steps to counteract the bedroom tax’s effect on housing benefits, by introducing mitigation payments to halt the risk of rent arrears and evictions.  According to a written answer to an SNP question, the Scottish government had budgeted to spend nearly £350 million over the past five years on bedroom tax mitigation costs, because it does not have devolved powers to scrap Westminster's policy.

The government makes an additional pot of cash available to local authorities every year, so councils can grant ‘discretionary housing payments’ to people struggling to afford to rent. 

But councils are drawing from a depleting pool of finding to help struggling tenants. 

In England, 2022/23 government funding for Discretionary Housing Payments (DHP) was reduced by 28% nationally, from £140m to £100m. 

 This March, London Councils warned soaring cost of living pressures were leaving local authorities bracing for an increase in the numbers of tenants in the capital unable to meet their housing costs, at the same time as DHP funding was being slashed.   A spokesperson for the Local Government Association (LGA), which represents England’s councils, said: “If the household benefit cap is to remain, we need to ensure that households are able to respond by moving into work with the right support, and a review is needed so that households that can’t move into work aren’t being capped. 

The LGA urged: “The government must do more to understand why households are remaining on the cap, what is happening to them and what the impact is on children, to ensure councils aren’t forced to make up long-term shortfalls.” 

Living with the bedroom tax: 'I didn’t have any choice'

At the peak of the pandemic, Maggie Tanner lost her job.

Suddenly, she found herself job hunting and needing benefits to scrape by.

Her year on housing benefits led to her being affected by bedroom tax in the Winchester council home where she had lived for 30 years - until that point paying full rent to the local authority as a fulltime worker and mother-of-two. 

Maggie Tanner felt pressured to move into substandard accommodation. Credit: Maggie Tanner

Ms Tanner emphasises she felt she should downsize when she retired. But she has shared her experience to highlight the cost to tenants of what she describes as being forced out.

In keeping with the policy, Ms Tanner’s benefits were docked for each of the two extra rooms in the house in which her now-adult children had once lived.

The council agreed to help her using discretionary housing payments. But in December 2020, after the council made errors in her rental account, Ms Tanner was told her disrectionary housing payment would be stopped. She frantically bid for smaller properties to rent, found one, and was given two weeks to move into it.

Ms Tanner, by then 64, hastily accepted a two-bedroom property, despite its “dire state.”

She was forced to borrow from family to help with her sudden moving costs and a fortnight’s overlap in rents – later receiving £1,000 in help from Winchester Council to assist her after she was forced to move.

Once she moved in, she managed to get a closer look at the property, discovering mould, damp, loose flooring and a crumbling ceiling.

She found temporary contract work, but spent five weeks struggling to get a phone line and internet connected so she could work from the home’s kitchen, while paying exit fees to prematurely end utilities contracts after her abrupt departure from her old house.

Ms Tanner said her constant cleaning could not hold the pervasive mould at bay, which crept onto the oven and began coating her shoes.

In her complaint to the council shared with ITV News, Ms Tanner denied suggestions poor ventilation was driving the mould. She later found vents in the property had been blocked over, and made seven calls for boiler faults that repeatedly left her with no heating or hot water within her first year in the property.

She later found a radiator that appeared to have been leaking for years- the water dropped through the tiles to the concrete underneath.

Ten months after she moved in, a surveyor informed her the exposed broken, dusty tiles in most of the bunglaow contained asbestos. Ms Tanneer said she should have been made aware of this before she moved in.

A broken tile containing asbestos at the home of Maggie Tanner in Winchester, Hampshire. Credit: Maggie Tanner

They were finally replaced early last year, but Ms Tanner found more tiles crumbling in her bedroom behind her bed's headboard. She worried she’d been breathing the dust as she slept. The tiles in the bedroom were removed last September. Further asbestos riles were found in the second bedroom, and removed last December.

For around four months, she said she had use of about half her house, as she stored furniture in the second bedroom while works were being done to the lounge.

But during the time of turmoil over the sudden move, Ms Tanner was still a recipient of benefits, from which bedroom tax was docked for her ‘spare room’ when she wasn't working.

Ms Tanner said she was grateful to have a bungalow with two bedrooms. She planned to have her grandchildren to stay regularly to ease pressure on her daughter.

But horrified by the discovery of asbestos, a primary cause of the deadly cancer mesothelioma, she feared having the children sleep over.

“I’m 66. I might die in 20 years of mesothelioma. My grandchildren are young, my children are young,” Ms Tanner said. “My relative died about 30 years after he’d been near it – I just don’t want people near it.”

Following her complaints, the council eventually offered her another £365 as a ‘goodwill’ payment, which she refused, calling it "more of an insult" as it didn't cover extra costs incurred and days when she couldn't work due to repairs being done.When she turned 66 and began receiving her pension, the bedroom tax deductions finally stopped.

But Ms Tanner told ITV News she felt forced into inadequate social housing at the point she war nearing pension age.

“How lucky I was having help from my family. If I didn’t have them… I was lucky they were able to help me. Some people don’t have relatives, or they don’t have relatives who can offer them help.”

She felt the bedroom tax policy left little room for nuance: “I thought they’d have understanding that people were losing their jobs during the pandemic, it was affecting everyone – it was on the news that more people were becoming unemployed and firms weren't employing people.” 

“I think the hierarchy don’t understand how the rest of us live, quite frankly.” 

A Winchester Council spokesperson said Ms Tanner's move was in line with the government's policy, and tenants who need Universal Credit housing benefit to help pay their rent must pay an under occupancy tax on properties ("if their home is bigger than they need.")

"In this instance, Ms Tanner was a single person in a three-bedroom property and therefore liable for the tax on the two additional rooms. Under the government’s scheme, tenants can choose to make up the shortfall between the rent and the benefit they receive so that they can remain in larger properties but this does depend on what they can afford.

"In this case, the council supported Ms Tanner using discretionary housing payments towards the end of her tenancy to alleviate the financial pressure by increasing the amount of benefit she received, while she was actively looking to move."

The statement also said it had helped her with £1,000 for the sudden move, saying she had chosen to live in the two-bedroom home.

But Ms Tanner rejected Winchester's statement that there was "no pressure from the council for her to leave her previous home."

“I do think it’s understandable because there’s a lack of housing for families." she said. "I would have been happy to have moved after my ancient cats had died, and when the pandemic and lockdown was over, but it was the way they did it. They made it that I didn’t have any choice.” 

Responding to her allegations of substandard housing and repair delays, the council said the home met the council’s re-let standards and repairs were being undertaken.

Ms Tanner rejects the council's statement, adding that some repairs were made, but continued issues included the eventual removal of the mouldy carpet leavng her with rusty carpet grippers, and her calls for the asbestos-tiled floor to be inspected going unanswered.

Fighting the bedroom tax 

The bedroom tax has been repeatedly challenged in the courts since it was introduced.  

In one case, a tribunal agreed that separated parents with shared care arrangements should be entitled to keep a room spare for their children to stay after a dad challenged the rules. 

Presently, only one caregiver – typically the parent who claims child benefit – can keep rooms available for their kids. The other must pay the bedroom tax for any additional rooms in a socially rented property, even if it’s being kept for their child’s visits. 

The tribunal ruled in the dad’s favour, after he complained his housing benefit was docked by 14% because the room in his two-bedroom home, in which his son stayed in for up to three days a week, was deemed ‘spare.’  But his case failed to influence the wider rules. 

But in one landmark case, a disabled man and his partner living in a two-bedroom home successfully challenged the rule that they were only entitled to one room to share. The policy was costing them a 14% from the man’s housing benefit.

Supreme Court judges ruled he was entitled to the full housing benefit, finding he had a medical need for a second bedroom.

The case changed the rules nationwide, and social tenants are now spared the bedroom tax if they can prove one adult in a couple need use of a second room due to a disability or medical condition. 

‘It will have to come from my food money’ 

But some people living with chronic illness still find themselves on the wrong side of the policy. 

One Suffolk woman, who spoke to ITV News about her circumstances on condition of anonymity, said she had been distressed to find bedroom tax still applied to her, despite her disability. 

After her son moved out of home, the 53-year-old receptionist, who has kidney disease, downsized from the home where she had lived for 20 years to a smaller property. 

She applied to rent a two-bedroom home, as she knows she will soon need the extra space for a dialysis machine and, eventually, a carer.

But until that day comes, her benefits are docked due to the second room. 

She says she followed government advice and took in a lodger to decrease costs, but found sharing her home impacted her mental health, as her kidney disease affects her toilet habits.  

The woman says she feels “penalised” by the policy, which removes £63.21 from her housing benefit every month.

If she wasn’t paying the bedroom tax, it would be easier to shoulder higher energy bills after the government’s discount ended in April, she said.  

“That money would be able to pick up the new impending stress of the withdrawal of the £67 a month help with heating, which I will now have to try and find - which will now have to come from my food money each month,” she said. 

The woman said the financial pressures caused by her situation had left her suffering anxiety attacks, and feelings of doom. 

“The whole experience has had me through an emotional roller-coaster, it's forced me out of the only place I could have ever called home.”  

‘They shot the messenger’ 

The government reacted furiously in 2013 when a United Nations (UN) representative released a critical report singling out the government’s bedroom tax policy as a potential violation of the human right to housing. 

Senior Tories called Professor Raquel Rolnik, an architect and former urban planner from Brazil, a “Marxist” after her report said social housing tenants had been failed for decades.

On her 12-day visit as special rapporteur, Prof Rolnik spoke to dozens of council housing tenants, visited foodbanks and homelessness centres, and heard from council officials, who told her of a lack of single-bedroom properties for tenants to downsize into.

Her report questioned how tenants on low incomes affected by housing benefits caps would be able to afford to move into higher priced private rentals, and concluded a social housing gap was growing amid a wider affordable housing crisis.

Speaking to ITV News from Sao Paolo a decade on from the backlash, she said she had been “shocked” to become the centre of attention upon her visit to the UK.

“Never, ever, in any of the other countries or missions I had been on, had I experienced a backlash and attack like that. The strategy seemed to be shoot the messenger if you don’t like the message – and they shot the messenger.”

Her report suggested the UK’s housing for vulnerable people had been progressively degraded over decades, and she recalls being troubled by the accounts of tenants affected by the then newly introduced bedroom tax.

“One of the things I will never forget is the scene of a man who had an amount of disability- both motor and cognitive disability- and because of these housing policies at the time he was living a life of dignity. Then the conditions that made that possible for him were about to be taken from him because he was not, as a single man, to be allowed to have an apartment of two bedrooms.” 

“A grandmother, who was able to be a real support for her daughter - a daughter who was in and out of situations of drug addiction. The fact that she was there and had a space for a night here and there in a spare bedroom for the grandchildren, essentially for them to manage their very vulnerable situation.”

Prof Rolnik said the goal of the rapporteur was not to compare countries, but to measure it against its own record.

Post-war Britain had led a “revolution” in social housing, admired by urban planners like her, she said.

But, Prof Rolnik added: “in the dismantlement of that housing, the UK had a leading role in proposing the paradigm shift from housing as a human right, to being an asset.”

Critics say an increase in stocks of affordable housing is necessary to ease the property crisis. Credit: PA

Does the bedroom tax add up?

The coalition government highlighted chronic overcrowding in social housing as its reason for requiring a bedroom tax.  

The government introduced the policy by arguing it would create an incentive for tenants to downsize and free up larger homes for squeezed families, or, even better – to get themselves off benefits.  But early research, commissioned by the Department of Welfare and Pensions, warned the government that while many tenants struggled with overcrowding, others in larger homes would not find appropriately sized homes to downsize into to avoid the bedroom tax. The research predicted those tenants would instead remain in their home, but become poorer for it.

The bedroom tax maths simply didn’t add up, the 2015 research showed.

Cambridge University researchers explained there were not enough houses for a single person wanting to move into a one-bedroom home, any more than there were enough large homes to accommodate the overcrowded households. 

What’s more, the highest rates of bedroom tax were being paid by tenants in areas where there was the biggest gap in appropriately sized homes for people to downsize into.

Overcrowded London and the southeast fared better in these statistics: With a greater range of housing types in urban areas, tenants had a chance of finding a small flat.

But in Wales and the North East of England, where overcrowding was not as common, researchers found a lack of one-bed social housing properties – but plenty of three-bed homes.

When ITV News asked the government whether it would be carrying out any more investigations similar to the Cambridge researchers' audit, it did not address the question.

Who gets a ‘spare room?’ 

The latest Census figures show the number of extra rooms in private dwellings far dwarfs the number in social housing.

One leading bedroom tax critic says the policy raises the question of who is entitled to space in a housing economy where growing numbers of people may never be able to afford to buy their own home, and private rental costs are surging.

Baroness Natalie Bennett, the former Green Party co-leader, says the ability to maintain a spare bedroom drives generational security.

Official figures show young adults in the UK are increasingly moving back into their family homes.

“Someone living in the ‘executive’ property, comfortably off, whose children know there’s always that bedroom to come back to and to financially depend on the security of having a safety net – allows them to take risks, take that internship," Baroness Bennett said.

"Because ‘there’s always mum and dad’s’.” 

For empty-nesters, she continues, being forced to downsize removes a safety net for the next generation – who increasingly face tough private rental market costs, and a declining supply of social housing due to what she branded the “disastrous” Right to Buy policy. 

Baroness Bennett charges that the bedroom tax was the result of the coalition government deciding it was politically expedient to “scapegoat” social housing inhabitants. 

But it had cost people dearly, she said, highlighting the rule allowing the government to dock the benefits of bereaved people when a member of their household dies. 

“Think about what it’s like to be there a year on the day after the anniversary of their death, uprooting your life across town.” 

Households paying more than £400 million

The government’s statistics show vast majority of properties subject to bedroom tax have just one room deemed ‘spare.’  

In a written answer to Baroness Bennett’s question in the House of Lords this March, about how many households in England were affected by the removal of the spare room subsidy, she was told 286,149 households were subject to the bedroom tax for one extra bedroom, and 63,759 for two or more spare, as of September 2022. 

In a written answer, Viscount Younger confirmed that in 2021/22, a total of £434 million worth of deductions were made to benefits for the removal of the spare room subsidy nationwide.  

In answer to Baroness Bennett’s question about whether the financial impact of those deductions on households had been investigated by the government, she replied that it had not. 

Where are all the houses? 

Experts say developers are not incentivised to build the smaller homes that could accelerate downsizing.

While many local authorities have compulsory affordable property quotas in place for new developments, planning laws allow developers to pay fines to the council for lower rent homes to be built elsewhere.

One expert suggests planning reform, and handing cash directly to local authorities to allow them to target partnerships with developers that back affordable housing.

Paul Neal, director of a mortgage brokerage in south Derbyshire, has more than 30 years’ experience in the industry, including work as a construction project manager on joint affordable housing projects with local authorities.

He believes the problem is being driven by an overheated housing market, as developers prefer to invest in projects that bring in the biggest possible profits. 

Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out What You Need To Know.

“A lot of what it is in property is down to cost and profit. Half a-million pounds for a three-bedroom flat is going to make a developer a lot more money than two-bedroom affordable house. There’s so many government hoops you have to jump through.” 

In the present climate, he predicted there would need to be support for developers to incentivise investment in single-bedroom housing to accommodate downsizing demand.

“When you’re looking at planning properties, the actual footprint of a one-bedroom unit is isn’t that dissimilar to a three-bedroom. If you’re building a property, you’re going to make more profit per square-metre on a three-bedroom house than a one-bed, and the costing is not that dissimilar," he explained.

"For one and two bedrooms the demand is more 'need' than want, and it’s more desirable to build an estate with three or four-bedroom, high-class properties.”

Mr Neal criticises Section 106, the planning rule that allows developers to pay fines to local authorities if they can prove it’s not financially feasible to include affordable housing in a development. 

“It almost feels like it’s a back-hander. The government shouldn’t be imposing fines - it should be that it’s compulsory to have to build these affordable developments. Property developers are building these fines into their costings, so it’s obvious it’s not enough to stop them doing it.” 

He was also critical of residents and countryside interest groups using planning powers to block new housing developments.

Until the industry and government could find a compromise to boost the production of smaller homes, Mr Neal questioned how it could keep a policy that insists on tenant downsizing to homes that in many cases may not exist.

“The bedroom tax seems a little bit ludicrous, to me, where you’re charging someone additional for an empty bedroom - but you can’t provide something smaller." 

The Partygate: The Inside Story podcast brings you fresh revelations and our whistleblowers in their own words in the definitive behind-closed-doors story of how ITV News uncovered one of the biggest scandals of our era.