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Agenda: To tackle poverty we must address housing policy and benefit system

A report by the Joseph Rowntree Foundation fired yet another warning signal about 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 and, in light of the fact housing and housing benefit reform are gaining wider traction across the political spectrum, it is timely to consider the options.

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

Housing policy makes a significant impact on the wellbeing of Scots. It is no surprise that those on the lowest incomes are disproportionately affected by the shortage and quality of housing. That's why I welcomed the focus on housing benefit reform in the 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 UK Government to see the folly of rushing through changes. Research shows that those changes to benefits targeted at the private rented sector (PRS) 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 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 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 report by the Scottish Government's Expert Working Group on Welfare made very helpful suggestions in relation to housing benefit in Scotland. In particular, its suggestion that it might be possible, to some degree, 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 flooding into PRS accommodation is equally sensible. But there are longer term issues that need consideration: the extent to which benefit is reduced as income increases can act as a strong work disincentive (although there are many other factors at play); the fact households of similar circumstances in identical properties are treated differently as a result of tenure differences; and the fact housing benefit only helps low-income households in the rented sector are just a few of the issues. Irrespective of the constitutional future, housing policy should be centre stage and any programme of reform should make housing benefit a priority.

Contextual targeting label: 
Local government

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