Welfare Reforms and the Bedroom Tax
Usually Cornwall Council is pretty good on briefing its elected members on major changes to funding, or items that will have an impact on the lives of people who we serve. On Monday, there was a briefing on the Governments Welfare Reforms that will start in April 2013.
My view is any reform to the welfare state has to be for the right reasons, not just reforming the system to save money. That is never a good idea, as it often harms those most in need. Reform should only be carried out to make sure those most in need get the help they require. Granted, it is a difficult balancing act, but as I have just said, a change just to save money is a dangerous way to carry out a reform. More so as this welfare reform is the biggest in 60 years.
The current welfare system has over 30 different kinds of benefits schemes, so I won’t disagree that it could do with a little streamlining to make it understandable to those administering and using the system. This streamlining is being carried out by the introduction of the Universal Credit (UC). Basically, this is a single means-tested support for working-age people who are in or out-of work.
The aim of the UC is designed to ensure work pays; it will personalise conditions according to people’s capability and circumstances, and is payable in a single monthly payment. A worrying point on the one monthly payment is this will be made to the head of the household. I fear this could lead to further issues.
There is also a cap to how much will be paid. This cap on the amount paid will be no more than the UK average household earnings. From figures I have, the current average wage in the UK is £26, 079 (Cornwall it is £21,258). A question was asked at the briefing was would the amount pay be based on regional pay, the answer was no. The current benefit cap is £35,000. Members were informed that this new cap of the average wage would affect 150 families in Cornwall.
Of course, there are far more details on these changes available via the normal channels, like the council’s One Stop Shop. I am not staying the system will be the Holy Grail of welfare reform, as with any new system there are still many of the actual details to be released, and more strangely still to be agreed. Which brings me on to another point of why do successive Governments roll-out new schemes when the real detail has not been finalised? It is like buying a new pair of shoes and only getting the box, and then you have to wait to see what type of shoe you have brought, and find out if they actually fit!
However, the real snake-in-the-grass in this reform is the changes to Housing Benefit. This has the potential to really hurt the people not only in Cornwall, but the rest of the country, too. Under the new scheme if you live in either social housing (a council house) or private rental and you have a spare bedroom(s), the Government is going to reduce your Housing Benefit.
For example, if you have one spare room, you will see a reduction in payment of 14%. In monetary terms (average rent) this equals to £9.70 per week reduction. For two or more spare bedrooms this reduction goes up to 25%, again in monetary terms this is £18.50 per week.
I think the rationale behind this is to make people downsize houses that are not in full use, and therefore free up some under used housing. However, this only would work if you have a surplus stock of houses so it is easy to downsize when rooms are surplus for one reason or another. In Cornwall there is a critical shortage of social housing (22,000 on the waiting list), so it is very hard to downsize because of the lack of social housing. So you will be penalised for no fault of your own!
From next year, the Government will reduce your Housing Benefit if you have spare rooms; even if you cannot move though no fault of your own. Like the lack of available housing. This is a totally wrong on all levels. These cuts will put on added pressure to find that extra money and will also lead to people struggling to pay their rent; which means someone could lose their home. Under the current rules being homeless for non-payment of rent/mortgage is classed as making yourself homeless. Making yourself homeless means the council has no duty to house you.
The figures of households that will be affected by this change is 1200 for Cornwall Council owned social housing (Cornwall Housing). The actual number of households that will be affected is going to be far, far greater because the other Registered Social Landlords (RSL), which includes Coastline Housing, Penwith Housing etc have yet to tell Cornwall Council their numbers. And you will have to add in all the private rental, too. I was told these details would be available by September. However, figures of 33% of households that could be affected were mentioned at this briefing.
These changes will not only be restricted to RSL housing, as those in private rental, will also be subject to the new rules. That I believe will have a far greater impact on people than first thought.
Cornwall already has a housing crisis with the lack of affordable rents, this change to the benefits it going to hurt people the benefit system was meant to help.
To add to Cornwall’s concerns is the funding for Cornwall Council council tax support will have a £6m shortful when this new system comes into effect. There is one positive, these changes will not effect pensioners.