What can be done about the Bedroom tax? – The role of Discretionary Housing Payments

The STUC is clear that the Bedroom Tax is an unfair, immoral and frankly absurd policy that will do nothing to improve the housing crisis that exists in this country but will heap misery on some of the most vulnerable people in our society, many of whom were already bearing the brunt of the Government’s austerity policies.

STUC is supporting an array of anti-bedroom tax campaigns across Scotland and is clear that there are a number of ‘asks’ we can make of our politicians at all levels to improve the situation including: ‘no evictions’ policies from councils; reclassification of rooms so the bedroom tax is not incurred; and of course a repeal of the ghastly policy by the Westminster Government.

While undoubtedly all the above approaches are important and will form part of the STUC’s future campaigning work in this area, there was one issue that we believe needs more attention, particularly in the run up to our Bedroom Tax Conference on Saturday 29^th June in Edinburgh. That is: Discretionary Housing Payments.

 It’s the STUC’s view that Discretionary Housing Payments are too often overlooked in the debate about the Bedroom Tax and are an important tool at the disposal of both Councils and the Scottish Government to mitigate it.

Importantly they also stop families falling into debt. Even on the most optimistic assessment people with just one additional room would be £750 worse off or in debt by 2014; £1500 by 2015 and £2250 by 2016. Frightening isn’t it....This is why the STUC believes that keeping families out of debt (and therefore using Discretionary Housing Payments more effectively) needs to play a key role in our anti-bedroom tax campaign.

This blog aims to tell you all you need to know about Discretionary Housing Payments but the STUC is also calling on all those concerned about the bedroom tax to find out if your own Council is topping up its Discretionary Housing Payment fund.

Discretionary Housing Payments (DHPs) are regulated by the DWP with funding provided by the UK Treasury.  STUC’s understanding of DHPs is as follows:

• They are made available on application to individuals in receipt of Housing Support for people who find themselves in difficulties for a range of reasons
• The application is made to the local authority
• Can be used for those in difficulty as a consequence of the change to occupancy rules (Bedroom Tax), Benefits cap etc.
• Each local authority receives funding from the UK Government and may, if it wishes, supplement that amount by up to 150%.  i.e. If a council received £1 million in DHP from the Government it would be able to legally spend £2.5 million on DHP overall
• STUC has not undertaken a full analysis but believes that councils tend not to supplement the basic figure and in some recent years have even underspent their budgets
• Councils are given a fair degree of discretion in how they administer the system and for whom.
• Although the DHP is by application, the UK government explicitly states that individuals can be contacted and encouraged to apply.  They can also apply by phone rather than filling out a form.
• The UK government increased Discretionary Housing Payments substantially last year to partially deal with the fall-out from their disastrous welfare policy.
• The current UK figures for DHP are (approx.) £160 million in 2013-2014, and £130 million in 2014-2015.
• Scotland received an increase in DHP for 2013-2014 (but Scottish Government believes it should have been higher as a proportion of overall total).  DHP in Scotland now stands at £10 million.  This means that the overall capacity for DHP which can be legally spent in Scotland is £25 million.  An increase of around £22 million since last year.  Most of this could be used to mitigate the bedroom tax.
• As the providers of 80% of local government funding it is open to the Scottish Government to provide this money.

BUTWhere does the money come from? 

STUC recognises that budgets are under strain.  Scottish Government has received serial cuts and these have been passed on to local government. The Council Tax freeze further pressurises local budgets. 

HOWEVER
Are we not agreed that the Bedroom Tax presents a particular moral attack which should be opposed? STUC believes that the money should be found and that it should found prior to the Scottish Government’s budget for 2014-2015 being debated in the autumn of this year.

WHAT YOU CAN DO

Contact your Local Council and make sure that they are a) making tenants aware of Discretionary Housing Payments and b) providing additional resources to fund their Discretionary Housing Payments from within their council budget. 

Austerity Uncovered - STUC Highlands and Islands Conference 2013

This year, the STUC's annual Highlands and Islands Conference included an Austerity Uncovered panel during which a number of trade unionists articulated the impact of spending and benefit cuts, job losses and falling real wages on themselves, their families, workplaces and communities.

The slides which introduced the session highlighted the relative impact on the area's labour market and the extent of asuterity's failure on wages, growth and the public finances.

On the road with Austerity Uncovered

 

On the road with Austerity Uncovered

 

This morning STUC’s fleet of two minibuses set off on the first leg of its Scotland-wide tour as part of the TUC, Welsh TUC and STUC campaign to highlight the impact of austerity on people across the length and breadth of the UK.

 

Over the next few months we can expect to hear plenty of optimistic talk from George Osborne and the Coalition Government about possible economic improvement and very modest growth and a slight improvement in the employment market are of course possible – and to be hoped for.  George Osborne will say that things are getting better, but that’s not how it is going to feel for the person in the street.  Where there are any new jobs they are insecure, often low paid and part-time.  There is genuine fear over benefit cuts, the impending full introduction of Universal Credit and of course the hated bedroom tax.

Accompanied by journalists and taking footage to be included in a TUC documentary, STUC will be in many of Scotland’s towns and cities over the next week, inviting people to tell their story, whether it is personal or part of a community story of opposition to cuts and austerity.

 

On the bus today we have the leaders of some of Scotland’s largest trade unions.  Pat Rafferty of Unite and Harry Donaldson of GMB as well as people from a wide range of other unions.  Activists from Unite Community – a new initiative from Unite the Union - will explain the benefits of joining unions (at low cost) for those who are unemployed or for other reasons not able to access traditional union membership.

 

Musical accompaniment, sponsored by the Musicians Union will be provided by the now legendary busker, Citizen Smart. His Bedroom Taxprotest song has over 160,000 youtube hits and his three-hit CD is now being sold across the country and through itunes to support the work of local Anti-Bedroom Tax campaigns. People wanting to support anti-bedroom tax campaigns in Scotland should download the song!

 

Most importantly we will be talking to Glasgow communities. 

 

We will meet the folk in Clydebank Unemployed Workers Resource Centre who are trying to hold together a community which still feels the ravages of previous recessions, let alone the current one.

 

We will visit, talk with and deliver packages to Maryhill Food Bank, one of dozens which have been created across Scotland.

 

We will meet with residents and family carers from those opposing the closure of day care centres and Glasgow.

 

And we will meet campaigners in Possilpark who are fighting against the Bedroom Tax and supporting those who are at the sharp end.

 

Check out the austerity uncovered website for latest progress! http://www.thereisabetterway.org/austerity-uncovered/nationwide-tour

or the TUC page at http://austerityuncovered.org/

or on twitter #austerityuncovered #stuc

or facebook www.facebook.com/forabetterway

 

A Wealth of Nonsense

At the end of last week, Twitter got very excited over this ONS video on the Wealth of the Wealthiest Households 2008/10; a video that was actually released back in December 2012.

Yes Scotland blogged as follows:

“So despite generating more than our fair share of UK wealth, the Westminster system means that we get substantially less than our fair share of the benefit…We are near the top of the league for wealth generation but, according to the Office for National Statistics, we are at the very bottom of the league when that wealth gets shared out. This is a direct result of policies taken forward, year after year, by Westminster. And what it means is that families like yours have lower incomes than they should, higher levels of debt and smaller pensions”.

This line was reiterated in another blog published the following day:

“Yesterday we published a video from the Office for National Statistics showing, among other things, the unequal nature of wealth distribution under Westminster, with Scotland sitting at the bottom of the 'wealth distribution' league (while we sit near the top for wealth generation)”.

I’ve got a lot of time for Stephen Noon, the author of these blogs, but on this occasion he’s writing undiluted drivel. Before explaining why, let me make two things very clear: first, the ONS video lays bare an unambiguously disgraceful state of affairs. It is socially unacceptable – and detrimental to long term economic development - that the bottom 50% of households own only 9.9% of total wealth while the top 10% possess 43.8%. Second, wealth inequalities are indeed largely the result of Westminster policies; it is therefore perfectly reasonable for Yes Scotland to draw attention to UK wealth distribution (although it would be nice to hear something of a developed policy agenda for greater redistribution under independence. And, yes, policies like the Council Tax freeze do exacerbate wealth inequality).

What isn’t acceptable is to use the ONS video as the basis for claims about Scotland’s position relative to the UK that simply don’t stack up.

Stephen claims this graph shows Scotland ‘sitting at the bottom of the ‘wealth distribution league’:

It shows no such thing. Rather it shows the share of Scottish households holding sufficient wealth (over £967,000) to make it into the top 10% of the UK’s wealthiest households. Unless they're supportive of upwards redistribution, it's perplexing how anyone can conclude that having a smaller share of the richest households leaves Scotland 'at the very bottom of the wealth distribution league'! The graph provides but a small part of the whole story on ‘wealth distribution’ and it tells us precisely zilch about total wealth owned in Scotland.

What it does imply is that Scotland has a flatter wealth distribution than the other nations and regions of the UK. This is a good thing – although the aspiration should be to make it flatter still. It’s just plain silly to fret about rising wealth inequality and then complain that Scotland has too few rich households.

Stephen then asks ‘And what does it mean in terms of actual money in your pocket?’ The answer is, again...nothing. This ONS work isn’t about ‘money in your pocket’. Rather wealth owned is measured over 4 categories: private pension wealth, net property wealth, financial wealth and physical wealth.

But we do have decent information on ‘actual money in your pocket’. Here’s a graph compiled from the latest regional stats on Gross Household Disposable Income (GHDI):

Scotland’s average GDHI (£15,654) is just below (97.6% of) the GB average of (£16,034) and higher than all the following English regions: North East, North West, Yorkshire and Humber, East Midlands and West Midlands. Wales is only 88.1% of the GB average and that's despite having more rich households.

And we also know that Scotland has relatively low levels of financial debt and a flatter distribution of wages:

ONS research published today on Total Household Wealth by Region and Age Group doesn't make pleasant reading, particularly in terms of generational equity: see relative shares of 25-44 yr olds and 45-64 yr olds living in households with wealth of less than £50,000/more than £500,000.

However, there is nothing remarkable about Scotland’s relative performance. Indeed, the evidence generally confirms Scotland’s flatter distribution of wealth. Scotland has less than GB average of households with children with total wealth of under £50,000. It has relatively more households in the middle wealth brackets and less in the £1m or higher category.

It's good that the shocking levels of economic inequality across the UK are now being discussed as part of the Scottish constitutional debate - hell, we might yet get onto labour market policy! - and it's understandable that Yes regard this as fertile territory. However there's no problem so great that it cant be exaggerated and distorted and any opportunity will be squandered if the assessment of Scotland's relative position is as spurious as that presented in these blogs. Coming on the back of this ludicrous SNP 'research', it's been a bad few days for Yes on the economics of independence. 

Finally, it’s got to be worrying that either campaign can stick analysis of this quality on the front page of their website without generating any critical comment whatsoever in the mainstream media?  

Stephen Boyd - STUC