'Bedroom tax' will mean 1,000 fewer affordable homes. Devolve welfare to Wales!

The moral and ethical arguments against the ‘bedroom tax’ have always been weak. While ideology may lead you to divide between the ‘deserving’ and the ‘undeserving’ poor, ideology cannot deny the evidence, and it is ultimately evidence which should dictate government policy.

Since the ‘bedroom tax’ was introduced just over six months ago, we see a double whammy affecting the housing supply crisis. Arrears from the ‘bedroom tax’ have exceeded £1m and a rise in the number of void properties has meant that over 700 homes in the sector are empty. Just 3% of the 22,000 housing association tenants affected have been successfully downsized. We have always argued that there are simply not enough one and two bed properties to move people to. With an estimated 90,000 on social housing waiting lists, how can we justify a policy that sees Wales losing out on 1,000 affordable homes?

Of course, the effect on housing associations is only half the story. Tenants are already struggling to afford the basics, the use of food banks is increasing, energy companies are increasing their prices and we are seeing a surge in the use of high interest lenders and loan sharks. Some payday lenders are reported to be planning to treble their business on the back of so-called welfare 'reform’, people are being pushed further into poverty and the threat of losing their home is very real.

Landlords are faced with tough choices. We note what’s been happening around Wales with various protests, often the landlord getting the blame. Tenant groups and some politicians have campaigned for a ‘no bedroom tax evictions’ policy, but landlords can’t continue to subsidise the extra costs brought about by welfare reform which would impact on the potential reduction in services for other tenants who pay their rent.

This divisive measure threatens social justice and cohesion, turning tenant against tenant, tenant against landlord and vice versa. We need to stand back and realise that the only solution is to take power closer to the people.

As a sector we have been doing all we can to mitigate against the reforms. We’ve launched the ‘Your Benefits Are Changing’ campaign to raise awareness and have set up an advice line to provide free independent advice to those affected. We’ve also supported the expansion of Moneyline Cymru, a not for profit organisation set up and part funded by Welsh housing associations for people largely ignored by mainstream lenders. Moneyline Cymru branches have issued over 13,000 loans to the value of more than £6m since it was set up in 2009. Customers are also encouraged to open a savings account with nearly a third opting to do so, collectively saving a total of £900k.

Last week the Labour Party tabled a motion in the House of Commons to repel the ‘bedroom tax’, and the vote was lost by only 26 votes. So if robust statistical evidence which shows that this policy is failing is not enough for the UK Government to axe this pernicious policy, what can we do? The solution is for Welfare Reform to be devolved to Wales.

In an asymmetric union, we can now look to Northern Ireland and see them use their powers in welfare policy to do something different. They have legislated to stop the ‘bedroom tax’ affecting existing tenants. Like Wales, it is affected to a far greater degree than England and Scotland, but their devolution settlement has allowed them to protect the people of Northern Ireland from the policy, and also to adapt the upcoming changes to Universal Credit and Direct Payments to fit the needs of Northern Irish tenants. With the Silk Commission due to report on further powers for the Assembly in the New Year, what chance they listen to CHC’s recommendation that Wales is given parity with Northern Ireland on welfare powers?


Nick Bennett
Group Chief Executive, CHC Group


You can read the full press release on CHC's 'bedroom tax' research here.

A day in the life of Moneyline Cymru

I’m afraid I am going to start with the C word. It is October, Christmas is fast approaching and Moneyline customers are getting ready for it. Quarterly savings account statements have just been sent out, so the Moneyline office is seeing a stream of customers coming in to withdraw their savings with most looking forward to starting their Christmas shopping.

People are also coming in to ask about how to get a loan. A loan is only approved after checking a customer’s identification and income & expenditure to see if a loan is affordable. It then takes 3-4 days for the money to reach their bank account. However, Moneyline doesn’t just offer loans and savings. When looking at an application, the loan officers also assess whether a Money Adviser could help. For example, they can see if benefits are not being paid that a customer may be entitled to, if they would be eligible for utility discount schemes or if they are making payments to creditors and have debts. For these and many other reasons, customers are referred to the in house Your Benefits Are Changing Money Adviser for free and independent money advice. This helps customers in so many ways.

One customer rang today to say thank you because a loan officer  spotted that she would be eligible for a discount on her water bill and that she wasn’t receiving Tax Credits. After talking to the Money Adviser it was confirmed that she was eligible and she was helped to apply.  She is now £60 per week better off by claiming Tax Credits, is saving on her water bills through Welsh Water Assist and will receive £135 via the Warm Home Discount in the New Year. This has made a massive difference to her and, through coming in for a loan, she has actually found herself financially better off.

Moneyline Cwmbran has been nominated for a ‘Torfaen’s Most Recommended’ award and customers are completing voting forms with lovely comments such as ‘friendly staff'; ‘non judgemental'; ‘love that you can get money advice as well’; ‘ you really help people’.

Our office is in the middle of the town centre, so customers can easily pop in to ask questions or just say hello, and this certainly adds to the good relationships we have with customers. Today one customer popped in to introduce us to her new baby – cue oohing and ahhing all round in an office of mums.

As the Money Adviser, my day today has included appointments for debt advice, a telephone enquiry for a benefit check, processing applications for Welsh Water Assist and Customer Assistance Fund, an application for Discretionary Housing Payment  for someone affected by the 'bedroom tax', talking to customers about Universal Credit and Personal Independence Payment, and searching for grants (it’s amazing how excited I got at seeing ‘army pension’ on an income sheet at the thought of the grant options I could look into for this particular client). And, on a personal level, thinking about how unprepared I am for the C word compared to our customers.

Your Benefits Are Changing is a Community Housing Cymru project and is funded by the Big Lottery.

Kath Hopkins

Money Adviser