Ten years of the bedroom tax has failed every key government objective whilst exacerbating the housing crisis.
It is ten years since the Cameron-Clegg coalition government introduced, as part of its austerity measures, the under-occupancy charge, or the spare room subsidy, which quickly became the bedroom tax, when it was introduced in April 2013 as part of the 2012 Welfare Reform Act. The key government objective was to ‘cut the benefits bill’ and ‘free up housing to help 300,000 in overcrowded housing’. In May 2013, 547,000 households were impacted by the bedroom tax, and yet, even with a brief fall to 465,000 by May 2014, it was becoming clear to the government that the bedroom tax was more of a problem than a solution.
It was not just the shortage of housing stock and options to move that brought this policy to a grinding halt. The report also confirmed that local councils and housing associations had staggering rent arrear levels of 40% as a direct result of the policy. Yet the government ploughed on with it, even though its own report echoed what charities had been saying across the UK, that this poorly thought through policy was not fit for purpose when the country had a chronic shortage of housing.
In 2015, the government commissioned a report, ‘The Spare Room Subsidy Evaluation’. The report was published in December 2015, and it was made clear from councils and housing associations that tens of thousands of households across Britain could not find any alternative housing to downsize to, pushing tens of thousands of people into poverty and through the doors of the nation’s food banks. All this, whilst over 50% of landlords who invested in this sector reported that they would be moving away from building and creating larger homes, which was the key government objective, to instead building more one-bedroom homes. In a further twist, many landlords reported that homes with more than three bedrooms were harder to let and not economically viable due to their having to wait several weeks as they sought to find tenants. This was a direct impact of the bedroom tax.
Running the largest multi-award-winning independent food bank, We Care Community Hub at Kath’s Place in Deptford, we saw the crisis increasingly causing more families, the elderly, and disabled people to come through our doors. Our advice team was alarmed at the number desperate to move but failed by the policy. Living in and based in Lewisham in south east London, I was able to see first-hand the problems with the system, and the three case stories which follow almost certainly could be duplicated in every community across the UK:
Carole has a large period three-bedroom house in a nice street. However, due to its size and energy costs, she applied to move to a one-bedroom ground-floor flat which would allow her to keep her two much-loved dogs. She has been unable to take in a lodger or even offer a room to a refugee, unable to do improvements to her house, or even grow a vegetable garden, because, as she is on the list, she could move tomorrow. However, Carole has now been waiting nine years to move, and the council has offered her nothing with a garden, or indeed any property which would allow her to keep her dogs, and she has decided now, at pension age, to do up her house, fix the garden and stay, as the uncertainty is undermining her mental health.
Joan lives in a four-bedroom four-storey period house. Most of her children have moved out, and she remains in this huge house with her twenty stone-plus adult disabled son. She has received just two offers in ten years, one with a bathroom so small her disabled son would be unable to access it to use the WC or shower, and the second property offered had a staircase so narrow that, even if her son could squeeze up the stairs, he would never come down again. The housing officer has told Joan she is being unreasonable in refusing the two properties she has been offered, yet she occupies exactly the type of house the council needs, and, if they rehoused her in suitable accommodation for her and her son, they would then be able to offer a larger family a home.
Jackie swapped the three-bedroom house she loved to escape the bedroom tax, but, with two grown-up children with disability issues who came to stay, she still needed two bedrooms. The council which moved her out because she could not afford the council tax has now got her much-loved larger home and is charging her bedroom tax on her new home, a home she was moved into by the council to escape the charge.
Many are unable to move because, as they are already in a home, they are not seen as a priority under most local councils’ housing allocations policy. Councils do not seem to understand that, if they put these people at the top of the list, they would get back larger much-needed family homes rather than paying taxpayers cash to boost the buy-to-let market, whilst solving more than one housing crisis at the same time — and probably saving money.
Many people think councils profit from the bedroom tax, but my freedom of information request to Lewisham council (see below) confirms that the council makes no income from the bedroom tax, and in Lewisham in 2023, although 934 are paying the bedroom tax, a staggering 2,053 are exempt. For example, once you get the state pension you no longer have to pay, again reducing rather than increasing the number of properties available.
The latest figures released to former Green Party Leader, Baroness Natalie Bennett, in a Freedom of Information request, show that, because of the chronic shortage from failing to build more homes or have in place an allocation policy which prioritises those who want or need to downsize, the policy is still not working 10 years on. There are almost 500,000 paying a bedroom tax most cannot afford. During a cost of living crisis, we have 396,100 households with one spare bedroom, 84,000 with two, and 500 with three or more empty bedrooms, and the target of freeing up 300,000 homes to help with overcrowding ten years on has still not been met.
Five hundred thousand empty homes in just one sector of the housing market, if managed correctly, could transform the UK housing market, see a fall in rents, and save all taxpayers from the staggering sums local councils pay hotels, hostels and private landlords for emergency housing. Yet here we are, ten years into this failed policy, while calls for it to be abolished to both the Conservative Government and the Labour Party have fallen on deaf ears. A policy which is a jewel in the crown of that austerity agenda of the last coalition government has become page one of a Charles Dickens novel. Yet our politicians are doing remarkably little about it.
After all who truly cares about the poor?
Re: Freedom of Information Act 2000 Environmental Information Regulations 2004 Reference No: 20033509
Thank you for your request for information held by London Borough of Lewisham. Please find below, a copy of your request and our response:
How many homes in Lewisham pay Bedroom tax? 934
How many elderly residents in Lewisham do we have who would be charged bedroom tax if not for their age making them exempt ? 2053
How much money does this produce for Lewisham Council? It doesn’t produce any money for Lewisham. We pay less benefit for these households but the Council does not make savings because the monies for housing benefit are provided by central government grants.
What does Lewisham council spend this money on? N/A
We hope you will find this information helpful.