A social landlord which leases 644 homes in Cambuslang says the proposed cap on housing benefit could be calamitous for it and its tenants.
West Whitlawburn Housing Cooperative (WWHC) says it could be plunged into financial crisis when the UK Government introduces its planned cut to housing benefit for single people aged 35 and under who are living alone.
Dubbed ‘bedroom tax two’, the proposal would see the new housing benefit, called local housing allowance (LHA), cut by up to one-quarter.
It would mean a Cambuslang tenant renting a one-bedroom flat in West Whitlawburn would have his housing benefit cut from the current £92.06 to £68.28.
The new figure is based on the shared accommodation rate (SAR), the housing benefit paid to people in shared accommodation.
Paul Farrell, director of WWHC, said: “We are extremely concerned about this raft of current proposals, primarily for our current and prospective future tenants, but also for our financial stability.
“We are particularly exposed to this bedroom tax two as we have a considerable number of single tenants under 35 and we also have a high proportion of two-bedroom properties.
“The social and financial impact of these proposals could be calamitous. We will have to look closely at the potential impact on our business plan.”
Several social housing providers in the area – including WWHC, Rutherglen and Cambuslang Housing Association and South Lanarkshire Council – have already begun to assess the numbers of under-35s residing in their properties in a bid to gauge the scale of the problem.
But they believe arrears and homelessness will sky-rocket in this area if the proposal is implemented.
Mr Farrell dismissed the Department for Work and Pensions’ (DWP) claim that the change would bring the social sector in line with the private sector, where tenants receive a set housing payment, irrespective of the cost of their accommodation.
He said: “Clearly the Westminster objective is to cut the welfare bill. However, the human impact and misery of these cuts does not seem to be a concern to those responsible for inflicting such misery.
“We await the Scottish Government’s response to mitigate this potential crisis for tenants and social landlords. We will be lobbying heavily for support for the most vulnerable.”
The DWP says people currently renting a one-bedroom property will not be affected because it will ensure that when they are transferred to universal credit and the new LHA they will receive the same amount of money.
According to a DWP spokeswoman, “These changes are about restoring fairness to the system and ensuring that those on benefits face the same choices as everyone else. The reality is nothing will change until April 2019 and existing tenancies signed before April 1, 2016, will be unaffected.
“We will have provided £1bn in discretionary housing payments across Great Britain by 2020 to support people transitioning to our reforms.”
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