Why the ‘bedroom tax’ provides weak protection for hard cases

Concern at the impact of the bedroom tax has finally tipped into the mainstream, as real families have come forward to share their fears about what April will bring.

The stories reveal exactly why Shelter and others said the bedroom tax – or ‘social sector size criteria’ to give it its proper name – was too blunt an instrument. The impacts on disabled people, grieving families and divorced dads have revealed the crude unfairness of this housing benefit cut.

Such problems, and the way in which the Government reacted to them, tell us two things about the broader direction of welfare reform that are worth exploring.

Increasing discretion

Ministers rejected every single argument for exceptions to deal with difficult circumstances, despite parliament twice voting down the policy. The Department for Work and Pensions instead said Discretionary Housing Payments [PDF] were best placed to support ‘hard cases’, and released an additional £30 million of DHP per year to help disabled people in adapted properties and foster carers.

As the original cut was designed to save £490 million a year, this additional DHP funding cannot help everyone losing out and Local Authorities will have to prioritise the hardest of hard cases. The key feature of DHPs is that they are discretionary, and while Local Authorities will have to report back to Government on how they are spending the money, there are very few safeguards in place if they are unable or unwilling to support the hard cases.

It will be interesting to see who gets the blame when high profile eviction cases hit the headlines. Expect DWP ministers to repeat the line that extra funds were made available to prevent this. Will it be the councils who turned down DHPs, or landlords who pushed for eviction that bear the brunt of public anger? Or will people remember that this was a cut imposed by Westminster?

Many local authorities will rightly be nervous about the mess DWP is storing up for them. Coupled with the loss of the Social Fund and the localisation of Council Tax Benefit, the bedroom tax is part of a broader trend of asking Local Authorities to do more but with less to support their poorest residents.

Reduced ‘complexity’

DHP is an extremely useful pot of money and is designed to smooth out some of the hard angles created by benefit rules. But throughout the debates on the Welfare Reform Bill Ministers insisted it should provide the safeguards that used to be carved out in benefit regulations themselves. This was to avoid re-introducing complexity and inflexible cliff edges into the social security system.

Shelter welcomed the broad intention to simplify the benefit system. But simplification should work for the benefit of those claiming benefits. Much of the so-called complexity in the system has evolved to recognise the complexities of people’s lives. Initiatives like single tapers and streamlining the application process for Universal Credit make sense. Imposing a one size fits all policy when problems are clearly foreseeable and numerous does not.

A poll this weekend found that a majority of the public now think the Government should delay introduction of the bedroom tax while it works through these issues. DWP have resisted reasonable adjustments up until now, but with the impact looming it is not too late for Ministers to provide greater protection for the hardest hit households.