Belfast Telegraph

Wednesday 30 July 2014

Bedroom tax 'costs more to enforce'

Nelson McCausland has expressed concern about the potential impact of the bedroom tax

Implementing the controversial "bedroom tax" in Northern Ireland would cost more than the policy is designed to save, research has found.

Reducing housing benefit payments to tenants of social homes who are not using all their bedrooms would deliver savings of £17 million a year, but it would cost £21 million per annum to manage the scheme, according to two leading housing bodies in the region.

The Northern Ireland Federation of Housing Associations (NIFHA) and the Chartered Institute of Housing (CIH) said the results of their joint economic modelling exercise supported their call for the policy to be rejected by the Assembly when the welfare reform proposals are debated again later this month.

While the contentious welfare reform measure was introduced elsewhere in the UK this week, the proposed legislation is still being debated by Assembly members, with Social Development Minister Nelson McCausland having voiced concern about its potential impact.

The NIFHA and CIH said the substantial bill for operating the tax would comprise added expenditure for collecting rents, managing tenancies and adapting the current system. If the policy is ultimately adopted in Northern Ireland, around 32,650 (52%) of working-age housing benefit claimants in the social sector will receive less money.

One of the issues highlighted by opponents of the bedroom policy is the make-up of the social housing stock in Northern Ireland, with a disproportionately high number of three-bedroom homes.

There are currently around 24,160 claimants who would be deemed to under-occupy by one bedroom and 8,480 under-occupying by two bedrooms or more. The proposals would see those under-occupying by one room losing 14% of their benefit (around £7-£9 per week) and those under-occupying by two or more losing 25% (£13-£15 per week).

NIFHA chief executive Cameron Watt said: "Most people agree that welfare should be reformed to create a simpler system that makes work pay and reduces the benefits bill. However the bedroom tax is an ill-conceived policy that will achieve none of these things. Rather it will hurt vulnerable people in Northern Ireland, causing financial hardship for tens of thousands of families.

"Government has yet to calculate the true cost of implementing the bedroom tax. However these new figures from NIFHA and CIH show that the direct costs of £21 million for the Housing Executive and housing associations will exceed the projected benefit savings of £17 million. It's clear that the numbers don't add up on bedroom tax. Northern Ireland can't afford the human or economic damage this policy would inflict."

CIH NI director Cecilia Keaveney said the measure was not appropriate for Northern Ireland. She said: "We've always known that there would be a significant human cost to the bedroom tax, but these figures show that there is also considerable financial cost to the sector and Northern Ireland Executive."

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