Our approach to the ‘bedroom tax’
As the effects of the Government’s welfare reforms are felt, Deputy Leader Cllr Joyce McCarty sets out Newcastle’s response.
The Government’s radical reform of the welfare system is directly affecting a third of the population of our city, and having a profound effect on the lives of some of our city’s most vulnerable people. Most people would agree that the system needs reforming. But what we see happening risks putting people into poverty rather than lifting them out.
As a council committed to fairness, and to supporting our city through tough times, we cannot sit back and watch from the sidelines. We can campaign against the unfairness of the cuts. But we also have a responsibility to deal with the consequences for individuals and their families. When 36,000 of our residents are worse off, including many thousands of children, and £100 million of spending power is removed from our local economy, we have to act.
Despite the cuts that we have also been forced to make, Newcastle City Council has in place a good support system to address the worst impacts of the cuts, working with an alliance of advice services, such as the Citizens Advice Bureau. We cannot reverse the cuts. I won’t offer false hope. But we can provide unbiased advice and support, and the help people need at a time of crisis. We can help people maximise the support they are entitled to. Last year we helped people access over £24 million in unclaimed entitlements, and helped 5,415 people with unbiased advice to reduce unsustainable debts. Our Customer Service staff are handling many more calls from the public. And our team of benefit experts are helping people understand the new system. We can’t avoid the changes, but we can help people to respond as best as possible.
Over recent weeks, around 7,000 households in this city alone will be forced to pay the Bedroom Tax because of the number of rooms in their house. The effects this has on people with disabled children, or the families of people serving in the armed forces, have been well publicised. But the impact goes far wider. As people are pushed into smaller properties, the housing market in Newcastle will change in ways that are hard to predict. We will need to plan for this, and do what we can to expand the housing options available to people.
Many people will be uprooted from communities they have lived in for decades, in search of smaller accommodation. In a sign of how irrational these changes are, sometimes that new property may be even more expensive than the larger properties they will have been forced to leave.
In response the council’s housing partner, Your Homes Newcastle, has visited many thousands of tenants directly affected, in their own homes. They continue to offer more support as the implications for families becomes clearer. Within the strict limits laid down by the government, we have been able to help people to avoid unfair assessments. For example, we are supporting people who were considered by government to have a “spare room” because they had a special bathroom because of a disability.
Newcastle has one of the lowest rates of homelessness for any city of our size, and we’re determined to keep it that way. That means continuing to invest in a range of services to prevent households reaching a crisis stage. Our approach has seen us halve the numbers of council house evictions and saved hundreds of families from homelessness. But we know this system will come under pressure. Ultimately there will be households who will struggle to pay increased housing costs. Some people affected by the Bedroom Tax are already struggling and in arrears with their rent. There may also be some households who refuse to pay – either as a protest, or to exploit the system. We will deal with each case on its own merits, within our existing policies. Your Homes Newcastle doesn’t make profits, and operates for the benefits of its tenants and the city as a whole. So if it loses rental income, it has less to invest in essential repairs and maintenance for homes, environmental improvements to communities, or to build new homes for the future. We would advise anyone affected by welfare reform changes to take any opportunity offered to meet with their housing officer, support worker or advisors. For those that access help, we will do all we can on a case by case basis to avoid the threat of eviction from their homes.
The government say their aim is for people to move into smaller properties. But, like other big cities, Newcastle simply doesn’t have enough affordable, good quality places to live. We have set out ambitious plans to expand the number of homes, investing in the communities with the greatest need for a different mix of houses and flats. But to meet the immediate need we will also do what we can to increase the numbers of one or two bedroom properties. We can do this by splitting larger homes into smaller flats, and work with landlords to help people move into good quality accommodation in the private sector. But we can’t do enough, and many people will simply be pushed further into poverty by the increases in their housing costs.
A big part of our response has to be helping people access job opportunities. With the economy flat-lining, it’s understandable that people are often pessimistic about the opportunities to move into work. Most people want to work, if they can. And about a third of people hit by welfare reform are already in work. We are delivering ambitious plans to create a Working City, with new opportunities available as we invest for the future, paying a living wage which helps people to move off benefit. We are expanding apprenticeships, bringing new businesses into the city, and supporting people to gain the new skills they need to get on. Our employment support organisation, Newcastle Futures, helped 545 people find work last year.
These welfare changes – to tax credits, council tax, housing benefit and benefits for disabled people – may seem like a revolution. But this is only the beginning. The next few years will see the introduction of Universal Credit. What started as a worthwhile reform to make work pay and simplify a complex system, will add further stress and change to a system under pressure.
Our Council Leader, Cllr Nick Forbes, is joining with other leaders of the largest cities to propose better solutions to the Minister in charge. Proposals to move everyone onto on-line claim forms, to shift housing benefit administration from the council to the jobcentre, and to pay benefits monthly, will all have a profound impact. We need to have the local powers and funding to be able to respond.
The council will continue to stand shoulder-to-shoulder with those affected, and do all in our power to support everyone in Newcastle towards a better future.