Good morning, everyone, and welcome to the Welfare Reform Committee’s 17th meeting in 2013. I ask everyone to switch off mobile phones and electronic devices.
Thank you for the opportunity to make a few introductory remarks.
Thank you, Professor Gibb. I found the information in your report enlightening and challenging. The report shows that we have a lot of work to do if we are to understand completely where things are and where they are likely to go.
I spoke to only three council landlords in any detail, all of which were trying to make the maximum use of the DHP. They focused more on the problems of engaging with hard-to-reach tenants.
You might not have had the time or the capacity to get into all this, but is there any indication of any sort of “Can’t pay, but wouldn’t pay whether or not we could” campaign? This is not like the poll tax, which people chose not to pay even though they could afford to do so, but some people who are subject to the bedroom tax seem, regardless of the circumstances, not to be engaging with their local authority because they are not prepared to accept that they need help or because they do not want help.
That seemed to be the tenor of the BBC piece that was broadcast yesterday and that is certainly possible. Council officers might be experiencing that, but I do not know whether they are inferring that or whether they know it for a fact.
I will cover some of the ground that Professor Gibb covered in his opening statement. Without giving too much credit to the BBC, I will reflect on some things that it said yesterday.
That is an interesting question. It is always challenging to answer the question whether resource is being allocated in exactly the same way as we might objectively measure need. We could always debate that point.
So we simply need to wait and see.
I think that we do.
You mentioned North Lanarkshire Council, and I suppose that I should apologise to it, as I am going to talk about it as well. I am keen to emphasise that I do not wish to criticise the council, but the information that became available about it informs the debate, so the principles that are at play are worthy of discussion.
They might well be, although evidence from other councils suggests that that is not necessarily the case. For example, I think that Stirling Council made a similar commitment—I might be wrong on that—but I am not sure that it has had a significant increase in arrears.
In the information that has been made available, there seems to have been a fairly quick rise in arrears in North Lanarkshire but a relatively low take-up of resources, such as discretionary housing payments, that were made available to alleviate the problem. Do you think—I am choosing my words carefully and I do not want to give the wrong impression, so when I use the word “political”, please try to understand that in the broader sense—that the political environment that existed in North Lanarkshire Council in the earlier part of this year influenced more people to choose to go into arrears rather than seek the assistance that was available?
Although I am a North Lanarkshire resident, I do not know enough about the ins and outs of the political environment there. For the reasons that I have suggested, I would have been cautious about making the kinds of commitments that have been made. It is also important to remember that people other than working-age social tenants might face problems in the current welfare reform environment. I will say no more than that, as I do not know enough about the political environment.
I will just point out that North Lanarkshire Council must be confused this morning, as the First Minister has accused it of being the first local authority to try to evict someone because of the bedroom tax, while Alex Johnstone is telling it that, by choosing not to evict people, it is causing its arrears to increase. I am sure that the council must be as confused as I am.
As a North Lanarkshire MSP, I have my own perspective on how early the council announced its no-evictions policy.
The figures represent a fair effort to understand what is going on and were provided by colleagues in the Scottish Parliament information centre. However, I am not really satisfied with any single effort to understand what the downsizing or backlog period is. What is good about table 4.5 and the methodology that SPICe used is the attempt to understand the allocation of households to different property sizes and to relate that to the vacancies that arise. That is incredibly difficult to do, even with quite old data—some of the data comes from 2009-10.
So the estimate that it would take three years to rehouse those affected by the bedroom tax could be quite conservative. That suggests that the UK Government’s statement that those who are affected could just rehouse themselves is quite a blithe assumption.
I might not use that language, but it is a strong assumption. It is an aggregate assumption that does not break the thing down.
You mentioned that the pull factor, which encourages people to stay in their existing home, might be stronger than the push factor of the bedroom tax. That is an interesting point, which you also touched on in your opening remarks. Can you talk a little bit more about how you have come to that position? What are the pull factors?
A number of things seem to be going on. Especially outside of cities—in towns and in more rural housing communities—it seems to be the case that people have developed their own support networks of friends and family. They have social capital bound up in where they live, which is where they are used to being. They have also been on a kind of housing journey over their lives, whatever generation they come from, so they expect at least not to go backwards in terms of the quality of housing that they consume. In addition, over time, they have been allocated housing of a certain kind, which may be with an extra bedroom, so they have established a home on that basis.
You said that people have established homes; where they live is not just bricks and mortar. It is not a commodity—the UK Government may think that housing is a commodity that they can shove people into, but those people’s houses are their homes.
Yes, they are homes, and there is a neighbourhood and all the other attributes that go with that.
Some of what I wanted to ask about has been covered, but I have a few issues to raise that relate to housing practitioners.
Certainly. That relates to the idea that, because local authorities are administering housing benefit on a statutory basis, they are dealing directly with tenants and have built up relationships with benefits-eligible tenants. They have a direct line to talk to them about budgeting and financial issues.
Thank you for that. It takes me back to the earlier discussion on paragraph 75 of your report, in which you say that
A lot of the work on arrears seems to be based on assumptions. One assumption is that if people were not in arrears the day before the financial year started but have moved into arrears, and those arrears equate to their rent loss, that is straightforwardly related to the underoccupation charge. That will probably be true in 90-odd per cent of cases: not always, but almost always.
I had not thought of it from a sheriff’s point of view, but you say that the issue of identifying arrears goes all the way through the system, from the person who is charged with arrears management having to make that decision, to further down the line when a case gets to court.
As I said, one of the most striking things in the past couple of years has been the level of proactive arrears management that landlords are taking on. They have obviously learned an awful lot and they are doing good things. To be positive, part of the reason for the situation with discretionary housing payments might be because other ways of solving the problem are being found, such as mutual exchanges.
Recommendation 5 in the executive summary suggests that
Yes. There is a technical issue about what the arrears are and how they change over time. For instance, there might be an issue about someone’s previous arrears and how their behaviour was influenced by the fact that they were already in arrears. Another issue might be the way in which their landlord is working with them to try to reduce the arrears. As I said earlier, in making such a commitment, there is a longer-term worry about behaviour in the context of, for example, the end of direct payments, so it seems that landlords would be making things more difficult for themselves. Again to be positive, in most cases that I am aware of, landlords work hard on a case-by-case basis to understand the nature of people’s financial problems and they do everything that they can to resolve the issue. That more tailored, customised and hands-on approach seems to me to be better than having a simple across-the-board rule.
I want to go back to some of the points that Jamie Hepburn raised. For me, one of the most interesting aspects is the number of one-bedroom lets that are available across the country. You said that vacancies in the market are a bit sporadic. Do you have, or have you been given, any idea of how many of the available one-bedroom properties are either amenity or sheltered accommodation, rather than mainstream accommodation?
The numbers that I looked at related to the housing association sector and the SCORE—Scottish continuous recording system—data, which is reported in chapter 4 of the report. The great majority of properties—in fact, almost all of them—are general-needs housing, so we are not talking about special lets of one kind or another. However, as I said, an elderly resident with mobility issues, for example, would get priority for a ground-floor property. So, although the properties are not special lets, that does not change the fact that a large proportion of the one-bedroom vacancies—maybe half—are not available for downsizing purposes because we have other commitments in Scotland. For instance, England does not have the same statutory requirement to house homeless people, so there could be a focus on downsizing in England in a way that we could not do in Scotland because we are seeking statutorily to house homeless people.
Would it be fair to say that, in terms of local authority housing, a large number of the single-bedroom properties that local authorities have on their books are set aside for amenity or sheltered purposes?
I am not absolutely sure, to be honest. I thought that you were going to say that they would be set aside for homelessness, which I think they probably would be. It will depend on levels of need locally and the kind of provision that there is. Housing associations have nomination agreements, so often half of all the properties that become vacant will have to go to whomever the local authority puts through, which would be homeless people.
I will touch upon some of the past housing policy in Scotland, which I do not think has been taken into account. First, I would like to give an example from Aberdeen. At one point, when there were a large number of voids in certain areas, those areas were designated as housing initiative areas and people were given houses that were bigger than they required in order to ensure that the properties were filled. For a long time, one-bedroom properties did not feature very highly in housing strategies across the country. In many areas we have had the homes for life initiative, which lots of people supported. That initiative ensured that homes were adaptable when things happened to families and to individuals. Have those issues come up in your research? Have folk said that the bedroom tax has been a complete volte-face in housing policy here in Scotland? What have they had to say about that volte-face?
That is entirely right. That is the context in which this discussion takes place and that is the starting point for many housing professionals. For several decades, the direction has been to grow the average size of a social housing unit in general needs terms, so there has been a reduction in the supply of one-bedroom units. Now, in several places social landlords are buying up one-bedroom properties off the shelf because they do not have any or do not have anything like enough. As Kevin Stewart said, that reflects a succession of policies that have moved us away from that spread of properties.
Given what you have just said about local authorities going out and trying to buy one-bedroom properties on the hoof, if you like, do you think that such a response to a crisis is a good way of dealing with housing policy? Has the fact that the Westminster Government has sprung the bedroom tax on people with its very quick implementation caused chaos in terms of housing provision in Scotland?
I guess that people had a couple of years to get their heads round the fact that it was going to happen.
I understand where you are coming from, but at the same time you said that there is a shortage of larger properties—
That is what we are being told.
I am sure that colleagues round the table will have experienced such a shortage. Will the rush to get new one-bedroom properties mean that there is less chance of more large properties coming into the system, which means that overcrowding will continue in a number of areas?
That is the corollary. If resources are diverted into smaller properties, they are not going into building bigger units. This is generally quite a difficult area, though. I have been banging on about the lack of clear information on vacancies and one-bedroom units, but there is also a lack of reliable information about overcrowding, which is the other side of the coin. If there is a housing reason for the policy, it is that there is overcrowding in parts of the system. It is evident that there is overcrowding in some pressured markets—there is no escaping that—and that there is overcrowding in pockets of other areas. What little evidence there is, though, includes a study on Merseyside that suggests that underoccupation is a much bigger problem than overcrowding and that the two things can exist alongside each other.
That is why we had local housing strategies; it was to try to resolve such problems. A hole has been blown under the waterline for the underoccupancy charge, as the Government would call it, or the bedroom tax, as I would call it. Would it be fair to say that that is the case?
That is an interpretation of it, but I do not think that strategies have been blown out of the water, because they are still extremely valuable. However, they certainly face a new challenge.
Thank you for the report, Professor Gibb. Before I turn to the policy’s impact, which is our main focus, I note that the drivers of the policy have been to try to make work pay to reduce dependence on benefits, and to save money. Did you look at the success, as it were, of the policy in achieving any or all of those aims?
As I said, it is still early days to answer such questions. However, certainly, landlords have said that there were instances of people getting work and coming off benefit. Again, who is to say that those people would not have come off benefit in any case because they were going through a cycle of being in benefit, then in work, then out of work and so on? Some people had come off benefit and gone into work, and had therefore resolved the underoccupation problem in a way that the Government would perceive as being a success.
Clearly, the picture is so varied that it is difficult to draw any firm conclusions. However, it certainly appears from your conclusions on the pull and push factors for people that the policy is not having as much of an impact as the Government might have wished. It is less clear—to me or to anybody—that the policy is saving the sums of money that were perhaps originally intended but, from what you say, it seems difficult to draw firm conclusions about those other factors, too.
Yes. I would add that there is an opportunity cost that is not necessarily measured. All the landlords and many of the surveys that the Chartered Institute of Housing and others have done suggest that there has been a really big increase in the management costs for landlords and other providers and in costs for citizens advice bureaux and suchlike that are involved in responding to the policy. That is an opportunity cost that people are paying, be it tenants paying it through their rents, be it through public subsidy or be it a cost to third sector organisations. That cost should be accounted for and netted off against the savings.
Indeed. Of course, there might be other costs associated with the particularly vulnerable group that is being targeted. Will there be a point at which the UK or Scottish Government will be able to indicate the success of the policy in terms of the UK Government’s original intentions?
That is a good question. In a sense, we will need 12 months, because we need a run of vacancies and of people’s decisions to change housing. On the other hand, to work out whether the policy has succeeded, more than anything we need to understand the behaviour of the people who are affected, and whether they have made the choices that the DWP hoped that they would make—in relation to positive changes in the labour market or saving money on rent—as opposed to deciding that the cost is worth bearing because they want to stay where they are. We would have to take some views on that.
There seem to be two sets of behaviours. There is the response of the individuals concerned and there is the behaviour of local authorities, and the Scottish Government for that matter. From what you say, local authorities and housing providers have responded in different ways. Some have put more effort into seeking alternative accommodation. Most—wisely and sensibly, I would say—have focused their efforts on trying to alleviate the impact on individuals. That creates a difficult situation. The issue is to try to work out at what point those approaches might come together.
That is the espoused position—that is what people are saying that they are doing. There is a lot of networking and professional training going on. A lot of people are learning from practice, and everyone is speaking the same language. However, one cannot say that that leads to certain things going on on the ground. We would have to evidence that to be able to say that. However, it is what people are saying. A considerable additional effort seems to be being made. People are saying similar things and doing similar things to try to ameliorate the problems that their tenants or clients face.
Is there any evidence that they have arrived at optimal solutions?
It is hard to say, but I would say no. There are certain circumstances in which people can achieve more, but that is because of the context in which they find themselves, so it is not an optimal solution—it is context specific. One approach is proactively to manage arrears and, in addition, try to tie that up with financial inclusion measures. A number of local authorities are trying to promote things such as employability measures to help people into the labour market. It is not as if local authorities are opposed to that; they try to make those things happen, too.
They would want to do many of those things anyway.
That is the classic dilemma in housing and social security policy. Housing is inherently a local thing. We have always had a national social security framework, and housing policy is increasingly dependent on social security to pay back housing associations’ private loans or to meet the needs of low-income tenants, for example. There is a real dilemma. We want to target resources at where the housing need is, but that is inherently funded by a national policy. I would be really worried about dismantling that national aspect. Unfortunately, both are needed.
Good morning, Professor Gibb. I have a question that deals with wider issues. In the past months, the committee has looked at what I would argue are the more social engineering aspects of the policy. An example would be the scenario in which a non-resident father is seeking a residence order and there is not sufficient accommodation. There is a clear impact on family law in Scotland in, for example, the blithe encouragement to widows—who, I presume, have a right to a private life—to take in lodgers.
That is exactly right and is exactly what I was going to say. There are certainly concerns that, if bedroom definitions are changed, that will be for only one reason: to reduce the number of available bedrooms. That has rental implications. It will reduce the rental income that can be generated. That takes us back to how flat or otherwise rent structures are and the rental impact on properties.
That is interesting. I understand that the first-tier tribunal decisions in the Fife cases are being appealed by the DWP, although I think that Fife Council is seeking to challenge the appeal going ahead. That was at the end of October; I am not entirely sure where we are with that at the beginning of November.
Yes. It is a matter of unintended consequences and the things that flow from a policy that have not been thought through. We do not really know yet how it will play out, but the most likely impact will be that rents will have to increase at some point to try to compensate. Some properties might be put into smaller size categories, but if people have to protect their rental income overall, they will have to increase the average rent to try to compensate, as far as they can.
The thought crossed my mind that, if bedrooms throughout Scotland are redefined as cupboards as a result of legal action, that might increase the number of one-bedroom properties, to our surprise. When a legal precedent is set and decisions are made, and if it turns out that those legal decisions stand, how big an impact will that have on the social housing sector in Scotland?
The short answer is that I do not know. The key question is: what is the potential scale of the replication of that kind of decision elsewhere? I simply do not know.
Can I clarify or redefine the question slightly? If a legal precedent is set, will local authorities and housing associations throughout Scotland have to redefine the sizes of some of their properties in a wholesale sense?
Again, I am speculating, but I guess that it will depend on the position of individual landlords, the nature of their stock and the ways that they are already dealing with underoccupation, for example. That might not be relevant to everyone. However, I am guessing. I am not a lawyer, and I do not know.
So that is another variable that we will have to factor in.
I am afraid so.
Is any particular work being done to look at the impact on single people and the ill, and to measure the effect of the policy? Those are particularly vulnerable groups. Some single people might move back home. I do not know what will happen. Everyone has to worry about the impact of such a major policy on a vulnerable group such as the ill and the effect on their health, welfare and behaviours.
The report referred to a study by McCafferty. I admit that I did not look at that in detail, but it focused on that. The fact that such a large proportion of working-age social tenants have a disabled, ill or long-term-ill member of their household suggests that that is a critical issue on which much more work needs to be done.
Thanks very much, Professor Gibb. The session has been helpful in allowing us to explore your findings so far and in giving us food for thought as we look ahead to what requires to continue to be done as we monitor the implications of the legislation. Obviously, had some of the variables that we have discussed been considered before the draconian legislation was introduced in the first place, we might not be sitting here talking about them. We look forward to considering those issues in future.
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