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Rent debt amnesty 'needs caution'

Tenants deemed to have spare bedrooms who have had their housing benefit cut should continue to receive financial support, but a rent arrears amnesty should be approached with caution, a Holyrood-commissioned economist has said.

Discretionary housing payments (DHPs), money set aside by the UK Government for those struggling with benefit cuts, have become a "critically important" tool to help those affected by the under-occupation charge.

The charge, dubbed the bedroom tax, deducts 14% from housing benefit for one "spare" bedroom and a quarter for two or more.

Single people and those with illness and disability are principally exposed to associated hardship, according to Kenneth Gibb, professor in housing economics and director of the Centre for Public Policy at Glasgow University.

In a report to Holyrood's Welfare Reform Committee, Prof Gibb recommends that DHPs should continue at close to its current level, particularly in the next year.

Labour and the Scottish Government have both pledged to abolish the policy if they get the chance, while MSPs and councillors are also debating whether to cover the benefit cuts in full and impose a blanket ban on evictions for "bedroom tax" debt.

Dr Gibb said: "Arrears associated with the 'bedroom tax' are worrying, though we do not yet know their absolute values. DHP has grown massively in value and significance and its continuity is now a key issue in terms of managing tenant hardship in future years.

"DHP and linked support from councils and the Scottish Government has been critically important in many places and its uncertain future underscores its importance to managing the under-occupation charge in future years. Single people and those with illness and disability are principally exposed.

"Securing the continuity of DHP at something approaching present levels of funding, especially for the next year, is critical.

"Arrears arising from the 'bedroom tax' need to be clearly understood, and their relationship with other rent arrears, but caution should be exercised and further consultation should take place before considering blanket forgiveness of such arrears."

Tenants are faced with either taking the benefit cut, moving in a lodger or moving out to a smaller property if available, but Prof Gibb found tenants are "resistant to downsizing" and that there is also a shortage of one-bedroom properties.

Labour MSP Michael McMahon, convener of the committee, said: "Disabled people don't want to leave homes specifically adapted to best suit their needs and separated families want space to come together as a family overnight.

"It is not a case of 'spare rooms' but of 'space to live', so homes have the capacity for either the facilities or loved ones that people need to make life worth living.

"No policy should put such basic rights at risk. The UK Government must answer how it intends to square that circle."

Deputy convener Jamie Hepburn, an SNP MSP, said: "Whilst there is some comfort in seeing that DHPs are doing a lot to solve this problem, there is the worry that the next wave of welfare reform, universal credit, personal independence payments, 1% benefit increases and so on, will reduce incomes and make matters even worse."

Conservative MSP Alex Johnstone, the only committee member from a UK coalition party, said: "This report is so politically skewed it almost discredits itself.

"This report does two things. It comprehensively exposes the severe lack of evidence available, which detracts substantially from any value it might otherwise have had, and secondly it demonstrates a willingness to overly rely on fragmented anecdotal evidence and opinion."

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