The wrong cuts: Budget 2015 analysis

Today the Chancellor confirmed how the UK government intends to reduce the welfare budget by £12bn by 2017-18.

As has been widely predicted, housing benefit took a major hit: automatic entitlement to housing benefit for 18-21 year olds is set to end, housing benefit rates for private renters will be frozen for the next four years and the benefit cap is set to be reduced to £20,000 outside of London.

We fear that removing housing benefit for young people will have a disproportionate impact on the 2,148 18-21 year olds who are currently in receipt of housing benefit and jobseekers allowance in Scotland. Many claiming housing benefit in this category have relatively high benefit claims: a sign that some will be in supported accommodation as a consequence of a vulnerability.

There is a serious threat that young people in Scotland will be put at risk of rough sleeping, particularly those who do not have a stable home to go back to. How the UK government frames any exemptions will be absolutely crucial to ensure this policy avoids a rise in rough sleeping.

The other cuts too could have deep and far reaching impacts on those who rely on the housing safety net. For many homeless applicants in Scotland, temporary accommodation remains an important stepping stone to permanent accommodation and away from the cycle of homelessness. Should these households be hit by the benefit cap, their transition into settled accommodation will be made much, much harder. Homeless households in Scotland could be forced into debt and it will become ever more challenging for local authorities to fund vital homelessness services.

Other changes announced: the benefit cap, a freeze on housing benefit in the private sector – alongside the cuts imposed during the Coalition Government – are targeted at reducing the housing benefit bill. None of these measures, however, tackle the underlying causes of the rise in the housing benefit bill: the cost of renting. This has been exacerbated by the failure by consecutive governments at Holyrood and Westminster to build sufficient affordable housing to keep pace with demand. We are in the midst of a housing crisis – in Scotland and across all parts of the UK – and with today’s announcement, the government seems set on addressing the symptoms without considering the cause.

With its lower rents, the case for building social housing is pretty simple: build more affordable homes and reduce the total housing benefit bill. Admittedly it would take time for the beneficial impact of a house building programme to be felt in a reduced housing benefit bill. But if we do nothing then even more household budgets will be pushed to the brink and government expenditure on housing benefit will continue to rise.

We need lasting change and a bold vision on house building. One that seeks to stabilise our housing market (which we shouldn’t forget led to the banking crisis of 2007-08) and provides everyone with safe, secure home they can afford, with the beneficial side-effect of keeping control of government expenditure on housing benefit.

These short term measures which impact upon the most vulnerable people in Scotland should be abandoned and common sense should prevail: invest in affordable housing now.


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James Battye

James Battye

I manage Shelter Scotland’s Oak Foundation funded private rented sector project work. The project is focussed on increasing private tenants’ consumer voice in Scotland, supporting new initiatives to encourage best-practice amongst letting agents and working with private landlords in Dundee and Lochaber to improve standards.