Agenda item

The Director of Housing and Neighbourhoods presented a report on the effect the ‘bedroom tax”, introduced by the Welfare Reform Act 2012, would have on Council tenants in Rotherham.

Consideration had been given to all possible opportunities to mitigate the effects on the 3,612 Council tenants including reviewing Council home sizes.  Knowsley Housing Trust had taken the decision to reclassify some of their properties as having fewer bedrooms in order to deal with low demand of a specific property type and to avoid blight through empty homes. 

Consideration had been given to this option but was not felt to be suitable as:-

-          Rotherham did not have any pockets of low demand properties and no downstairs rooms were classed as bedrooms

-          To only review the size of properties where the tenants were affected by bedroom tax would create an unfairness across the Borough where people would be paying different rent levels for the same type of accommodation

-          The amount of rental income would reduce limiting opportunities for other investment options

Despite the results of a recent Inside Housing survey suggesting that some of the larger landlords were considering reviewing home sizes, only Knowsley had taken the decision to reclassify.  This had been much discussed in the media and had prompted questions as to whether Rotherham would exercise its right to review some of its properties particularly in relation to bedroom dimensions.  The advantages and disadvantages of reclassifying properties as having fewer bedrooms were:-

Advantages:-

-          Possible reduction of Council rent arrears and the cost of collecting arrears

-          Possible reduction of evictions and homelessness

-          More people would be able to remain in their home, therefore, the costs associated with transferring to new properties reduced

-          Some tenants would view it as a positive step to reduce the impact of Welfare Reform

Disadvantages:-

-          Collect less rent

-          Data currently not held on bedroom dimensions – significant time and cost implication associated with analysing property types

-          Many who were not under occupying their homes were using smaller rooms as bedrooms and paying rent

-          Major exercise to reclassify properties as having fewer bedrooms and may be difficult to reverse in the future should Policy change

-          Review of bedroom sizes was 1 potential reactive measure that would not deal with all of the problems caused by bedroom tax

-          Government had made a number of recent amendments to the social housing size criteria rules – not prudent to undertake stock classification exercise when the Policy environment was so fluid

-          Non-affected tenants and those in small private accommodation may feel that the Council was operating double standards

-          Concern that taking the reclassification approach may encourage DCLG to revisit the self-financing settlement

Resolved:-  (1)  That consideration be not given to the reclassification of properties.

(2)  That the following actions be taken to support Council tenants in financial hardship as a result of the bedroom tax:-

(a)    Devise and implement a new Downsizing Policy

(b)   Review the Rent Arrears Policy to include specific provisions regarding people affected by the bedroom tax

(c)    Develop a clear procedure and guidance/advice on taking in lodgers as this would be 1 of the key ways of helping to reduce the financial impact on tenants

(d)   Continue to provide excellent money management and income maximisation advice

(e)   Ensure the Council new build programme reflected the need for more 1 and 2 bedroom properties.

(3)  That information be made widely available regarding the exemptions to the bedroom tax.