Bedroom tax slammed by minister after costing more than saving

The controversial bedroom tax is costing more than it is saving, according to the Scottish government.

The UK coalition's widely hated under-occupancy policy was designed to cut government expenditure, but Scottish housing and welfare minister Margaret Burgess has said that the annual costs of implementing the penalty will exceed savings by £10 million.

In a letter to Lord Freud, the UK government's minister for welfare reform, Burgess cites the Convention of Scottish Local Authorities' (COSLA) findings that revealed the loss in savings and has demanded an urgent meeting.

The Scottish government has provided local authorities with additional funding to increase the amount available for discretionary housing payments, announcing in October an extra £20m to help 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Bureaux and other advisory groups have all reported an increase in callers who have seen their benefits reduced or withdrawn.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.”

COSLA’s latest estimate is that the annual costs of implementing the bedroom tax will be around £60m, due to the cost of DHPs, increased rent arrears, additional administrative costs, and the increased burden on advice and support services. This figure compares with only £50m in savings made by the Department for Work and Pensions if the penalty were to be applied in all cases in Scotland.


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