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Move from welfare to wellbeing through housing reform

This opinion piece is about 8 years old
 

Robert Black, chair of the Commission on Housing and Wellbeing, argues that housing benefit reform can make a real difference to quality of life

Robert Black
Robert Black

A recent report by the Joseph Rowntree Foundation fired yet another warning signal of the scale of the problem Scotland will face as it attempts to tackle poverty over the next decade. The report demanded policy responses from a range of sectors as it revealed one in seven working-age adults and children could still be below the poverty line by the mid-2020s.

So, what are the policy responses which could improve the wellbeing of the more disadvantage communities and bring about positive change? In my view, housing policy and reform of the housing benefit system are part of the solution.

As we face the possibility of independence or the promise of more devolved powers to Holyrood, I think it is timely to consider what options are open to us.

Nine months ago Shelter Scotland launched an independent Commission on Housing and Wellbeing, which I chair. During that time we have considered the many and various ways in which housing and housing policy impact on the wellbeing of Scotland’s people. And rather than following a narrow housing policy agenda, our considerations have taken us inevitably to matters such as welfare, tax, the labour market, health and social care and the environment.

We need look no further than the changes made to housing benefit by the current UK Government to see the folly of rushing through changes in this area

Housing policy makes a significant impact on the wellbeing of Scotland’s people – including health, education, employability and life chances. And it is no surprise that those on the lowest incomes in Scotland are disproportionately affected by the shortage and quality of housing available to them. That’s why I welcomed the focus brought on housing benefit reform in the recent report published by the Scottish Government's Expert Working Group on Welfare.

Changes to housing benefit have to be introduced carefully and must be evidence-based to avoid creating more problems than they hope to solve. We need look no further than the changes made to housing benefit by the current UK Government to see the folly of rushing through changes in this area. Research shows that those changes to benefits targeted at the private rented sector (PRS) in an effort to control costs have failed to lead to lower rents – as originally hoped.

Housing benefit cannot be ignored - with an annual expenditure of £1.8 billion in Scotland on personal housing subsidies in the rented sector, it dwarfs the direct expenditure by the Scottish Government on housing. In Scotland, 65% of tenants in the social rented sector receive housing benefit, compared with 32% of private sector renters. But the increase in expenditure on housing benefit in recent years has come largely from the increased reliance and take up of tenancies in the expanding PRS.

This increased take up has, to a large extent, come from working people in low income jobs and, consequently, the PRS is now much more dependent on housing benefit. Rental income supplemented by housing benefit enables landlords to repay long-term loans to lenders and helps low-income tenants pay their rents.

The recent report by the Scottish Government's Expert Working Group on Welfare made some very helpful suggestions in relation to housing benefit in Scotland. In particular, its suggestion that it might be possible to move money from personal subsidies to financial support for more house building, deserves detailed consideration. So, too, does the suggestion for a new form of tenancy regime in the PRS. Its recommendation to increase the provision of social housing as a way of preventing public money from flooding into PRS accommodation is equally sensible.

But there are longer term issues which also need consideration: the extent to which benefit is reduced as income increases can act as a strong work disincentive; the fact that households of similar circumstances in identical properties are treated differently as a result of tenure differences; and the fact that housing benefit only helps low income households in the rented sector are just a few of the issues we face.

Irrespective of the Scottish constitutional future, housing policy could and should be centre stage and any programme of reform should make housing benefit a priority.

Robert Black is chair of the Commission on Housing and Wellbeing, charged with considering the relationship between housing and wellbeing for the people of Scotland in the second decade of the 21st century.

 

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