Housing group in reforms warning

Jun 20 2012

Reforms to the welfare system could cost families living in social and affordable housing at least £220 million over the next four years, MSPs are set to be told.

The Scottish Federation of Housing Associations (SFHA) is expected to tell Holyrood's Finance Committee that the UK Government's legislation to alter the benefits system will have a huge negative financial impact on those households.

The Holyrood committee is taking evidence on the financial implications of the Welfare Reform Act, which provides for the introduction of a Universal Credit to replace a number of existing means-tested benefits and tax credits, and is aimed at simplifying the system.

The SFHA said more than two-thirds of working-age households in housing association or co-operative tenancies rely on housing benefit to pay all or some of their rent, and some could see that benefit cut under the new laws.

Mary Taylor, chief executive of the SFHA, said: "The main objective of the UK Government's welfare reform agenda has been to reduce public spending, but the combined effect represents a significant loss to individual households and to local economies.

"Not only will the changes make life harder for tenants, they will also put at risk rental income for housing associations and co-operatives, affecting their ability to provide good-quality housing and services.

"Tenants will also need additional support, to try to prevent rent arrears getting out of control. The implications for housing providers are massive.

"What's more, the risk to rental income will impact on our sector's ability to repair and improve existing homes, and to repay loans already taken out to build much-needed affordable homes, as well as making it harder to raise finance to build new homes.

"This is at a time when there are 335,000 households on Scottish housing association and co-operative waiting lists."

The SFHA is calling on the Scottish Government to work with the Department of Work & Pensions and others to minimise the risks. It is also asking the Scottish Government to help with the cost of advice to social tenants through a series of national campaigns about the welfare changes.