UK government urged to strengthen social security system - Action Needed To Help Renters

14th June 2020

Housing Minister Kevin Stewart has written to the UK Government calling for urgent action to support housing tenants affected by the coronavirus (COVID-19) pandemic.

In a letter to the Secretary of State for Work and Pensions, Mr Stewart identifies five key areas in which the benefits system and support for people who rent their home should be urgently strengthened.

The Housing Minister urges the UK government to:

• lift Local Housing Allowance rates further to make more homes affordable to renters

• suspend the removal of the spare room subsidy

• suspend the benefit cap

• suspend the shared accommodation rate for under-35s

• extend the backdating of benefits for those who might not have realised they were eligible and relax the criteria under which backdating is allowable

The Scottish Government took action in the first emergency COVID-19 legislation to protect tenants from eviction for at least six months. Recently it made an additional £5 million available in discretionary housing payments to support those renting, increasing this fund to £16 million - this is further to that made available to fully mitigate the bedroom tax.

FULL TEXT OF LETTER

The Rt Hon Dr Therèse Coffey

Secretary of State for Work and Pensions

Caxton House

Tothill Street

London

SW1H 9AJ

Dear Ms Coffey

I am writing to urge further consideration of the need to strengthen the social security system for renters affected by COVID-19.

In this unprecedented crisis, the Scottish Government and local authorities swiftly took a range of steps to protect renters from eviction through extended notice periods and extension of mandatory grounds. We have also moved to provide additional financial support within our devolved powers and budgets.

In order to support tenants during the crisis, we have increased the amount available for other discretionary housing payments (DHPs) by £5 million to almost £16 million. This takes our overall investment in DHPs in 2020/21 to more than £76 million. We took these steps to support those for whom the UK welfare state is not providing the safety net it should.

We are also supporting private landlords by offering loans and encouraging them to take mortgage breaks where available, although we know this is limited for some. We continue to engage with landlords across the rented sector to ensure that they are coming to agreements with tenants on rent arrears and signposting tenants to the range of financial support available.

The Scottish Government remains committed to working collaboratively with the UK Government to ensure that the social and economic effects of COVID-19 are mitigated effectively and efficiently so that people do not face hardship or homelessness. We have set out the steps we would like you to take in various pieces of correspondence during the pandemic.

The benefits system is an essential lifeline for many people facing or experiencing homelessness throughout the UK. Housing elements of social security remain a crucial part of the support required by tenants facing financial difficulty or homelessness as a result of the pandemic and remain reserved to you. The changes you have made to local housing allowance (LHA) rates are welcome, but fall short of what is needed to provide comprehensive support to people living in rented accommodation.

In addition to our previous calls to lift the benefit cap; to scrap or relax the restrictions around the removal of the spare room subsidy; to provide more information to local authorities to help signpost available support to tenants; and to support quicker payments for discretionary housing payments, I urge you to consider further action to support people who rent their homes. This is an area where urgent intervention is required in light of emerging evidence of the inequity of support available between those who rent and those who hold a mortgage.

Recent research by the Resolution Foundation demonstrates this in stark terms, finding that mortgage holders entered the crisis with lower average housing costs relative to income and a bigger financial buffer than renters, a disparity reflected in the fact that renters were far more likely to be facing difficulty in meeting their housing costs than those with a mortgage. This same research also found that the level of mortgage holders seeking and successfully securing a mortgage holiday is far higher (12%) than the number of private renters seeking and successfully securing rent reductions from their landlords (5%).

We know that many people will find themselves in financial difficulty for the first time from job loss or substantial income reductions. Given the scale at which this is occurring for households across the country, it is vital that the safety net of social security is accessible and sufficient to support people through this national crisis and a new approach to the housing element of social security is now needed.

• We know that low-income families will have no savings to cushion them from the financial impact of the pandemic. We urge you to suspend the removal of the spare room subsidy, particularly as a spare room becomes essential when larger families need space to isolate.

• To support those with high rents who are currently unable to source lower cost accommodation, we would ask you to suspend the benefit cap. This will help to reduce the risk of immediate and short term hardship for families who are unable to meet housing costs, and will help to ensure that the support you have made available through investment in LHA rates and the increase in the standard allowance rate of universal credit is not undermined.

• We have seen the benefit of restored LHA rates in Edinburgh, with several hundred properties now affordable to renters, but the majority of renters will still struggle to source affordable accommodation and people must be able to maintain tenancies beyond the immediate crisis. We urge you to lift LHA rates further, bearing in mind that the 30th percentile still represents a cut when compared to the 50th percentile that applied before UK Government welfare changes.

• The high number of individuals under the age of 35 who have moved in with their parents during this crisis highlights the need for better housing support for young people. Like many stakeholders in the Scottish housing sector, we believe there is a strong case for suspending the shared accommodation rate for under 35s, especially as many who have lost jobs during the crisis are likely to be younger people.

• Finally, we ask you to extend the backdating of benefits for those who might not have realised they were eligible and relax the criteria under which backdating is allowable.

The Resolution Foundation figures are concerning and the risk to households who rent their homes is immediate and pressing. We must work collectively to act now to support a group of people facing mounting rent arrears and financial difficulty they would not have if they were mortgage holders. You will be aware of similar calls from leading homelessness organisations who are hearing concerns from their clients.

I am happy to discuss any of the points raised in this letter and wish to further reaffirm the offers from Scottish ministers to work with you on any other actions you are considering in response to COVID-19. I hope that by working together our governments can provide the most effective form of support during this crisis and afterwards.

Kind regards

KEVIN STEWART

MINISTER FOR LOCAL GOVERNMENT, HOUSING AND PLANNING