Bedroom tax costing more than saving says minister

  • According to the Scottish government bedroom tax is costing more than it is saving.

    Whilst the controversial under-occupancy policy was designed to cut government spending, the Scottish housing and welfare minister Margaret Burgess has said that the annual costs of implementing the penalty will exceed savings by £10m. Tax

    In a letter to the UK's minister for welfare reform, Lord Freud, Ms Burgess cites the Convention of Scottish Local Authorities' finding that show the loss in savings and has demanded an urgent meeting, reports 24dash.

    The Scottish government has provided local authorities with additional funding so that the amount available for discretionary housing payments is increased. In October an extra £20m was made available for those struggling with the bedroom tax.

    Burgess said: "When it comes to the bedroom tax it's clear the policy is costing more than it is saving in Scotland. The apparent savings to the Department for Work and Pensions are simply because the costs are being pushed onto other stakeholders. There was no justification in introducing the bedroom tax to reduce housing benefit expenditure in the Scottish social rented sector especially when you see the financial and social costs borne by some of our most vulnerable households. It's also clear to see there is no legitimate economic and social case for its imposition. Local authorities, Citizens Advice Bureaux and other advisory groups have all reported an increase in callers who have seen their benefits reduced or withdrawn. Foodbanks in Scotland have named benefit delays and changes, including sanctions, as major factors in the increasing demand for their services. This current sanctions regime is unnecessarily harsh and there's little evidence that the penalties will have a positive long-term effect for individuals. I do not believe the UK Government has fully considered the implications of such punitive actions against the most vulnerable."

    In it's latest estimate COSLA says that the annual costs of implementing the bedroom tax will be around £60m. This is due to the cost of DHPs, increased rent arrears, additional administrative costs, and the increased burden on advice and support services. Only £50m in savings will made by the DWP if the penalty were to be applied in all cases in Scotland.

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    Image source: http://www.sxc.hu/photo/169849

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