ScotGov welfare state concern housing support payouts hit record £80m

The average annual Scottish Government spend in the three years since Covid has soared by over 25%.

Campaigners say it shows that the housing crisis is "out of control".

Scottish social justice secretary Shirley-Anne Somerville lamented the rising costs saying the money could have been invested in other schemes to reduce poverty.

Between 2017/18 and 2019/20 the typical annual cost to the taxpayer was at £62.56m. That has risen to an average of £78.3m in the past three years.

There are now typically 136,486 payouts per year - 12,000 more than before the pandemic and cost of living crisis.

The Scottish Government is set to make a record £83.7m available to local authorities in this financial year on DHPs.

They are awarded by local authorities when they consider that a housing benefit or universal credit claimant requires further financial assistance towards housing costs.

Local authorities assess financial hardship, the amount that is to be paid and how long the payments are to be made for.

The vast majority of the award annual spend in 2022/23 is put into supporting renters who have lost up to a quarter of their housing benefit because officials have decided they have more bedrooms than they need.

The under-occupancy penalty or bedroom tax resulted from a provision of the British Welfare Reform Act 2012 and saw tenants living in public housing with rooms deemed "spare" faced a reduction in housing benefit. This resulted in them being obliged to fund the cuts from incomes or face rent arrears and potential eviction by their landlord.

Some £66.9m was given in relation to the bedroom tax - up over £10m since just before the pandemic.

Spending on non-bedroom tax support has risen from £10m before the pandemic to £12.5m. That includes housing allowance claims for those whose official benefits do not cover rent and payments for those hit by the UK Government Department for Work and Pensions welfare benefit cap.

Some £3.5m was given to those hit by an ongoing freeze in local housing allowance in 2022/23 while £2.5m was given to those hit by the DWP benefit cap.

The sums available to local authorities will soar even higher this financial year.

The new tranche of DHP funds will include £69.7m to fully mitigate the bedroom tax helping over 91,000 households in Scotland to sustain their tenancies.

A further £6.2m will mitigate the benefit cap as fully as possible within devolved powers And some £7.9m will mitigate against what the Scottish Government describes as the "damaging impact of other UK Government welfare cuts including the ongoing freeze to Local Housing Allowance rates".

Ms Somerville said the funds being ploughed into DHPs "ensure we can fully mitigate the bedroom tax and also support people with housing costs and protect families from the damaging impact of other UK government welfare cuts.

She added: “The fact that we have to spend this money to protect people shows that the UK welfare system is not fit for purpose.

“If we did not have to spend so much mitigating the impact of UK Government welfare reforms, we could invest further in anti-poverty actions.”

Aditi Jehangir, secretary for housing campaigners Living Rent said: "These numbers are clear, the housing crisis is out of control.

"They demonstrate how poorly designed and punitive our benefit system is. The so-called ‘bedroom tax’ is forcing the government to top up tenants' housing payments due to a punitive policy that essentially says to tenants see your benefits cut and be forced to make up the difference or leave social housing and enter into the cut-throat private rental market.

"Rather than punish people with extra bedrooms, the government should focus on the actual issue in the housing crisis and build the 300,000 homes for the people on social housing waiting lists."

"For the number of people receiving DHP to have increased by nearly 12,000 post-Covid, a time of higher sickness and unemployment, highlights how since then, even with more people in work, rent has become utterly unaffordable for so many across the different sectors."

It comes as it emerged rents in Scotland were to soar by up to 8% this year while those in the private sector were capped at 3%.

Rent rises approved by over 100 housing associations in Scotland are at an average of 5.34% and range between 0% and 8% as arrears hit a record high of £160m.

It comes after tenants’ rights minister Patrick Harvie said in January when concerns were raised about rent increases that voluntary agreements reached with social landlords would keep rents "well below what they are in the private market and limit rises next year".

The rising rents have led to concerns amongst housing campaigners that eviction cases will also increase as tenants struggle to pay.

Ms Jehangir added: "With the average DHP payments increasing by £15.74m, it is not just the number of people affected that is a problem, but the extent rent has increased. For those in the lowest income quintile in the private rented sector, rent now takes up close to half of their income. In the social sector it is not much better at a third of their income.

"As the housing market continues to spiral completely out of control, more public money continues to be funneled into the pockets of landlords. The government needs to: stop the bedroom tax, bring in rent controls to bring down rents and we need the government to commit to building social housing to ensure the 300,000 stuck on waiting lists have access to truly affordable housing."

The development has come six months after the First Minister announced plans for an eviction ban and an immediate rent freeze for social housing and private tenants in September, last year as she branded the cost of living crisis a "humanitarian emergency".

The Scottish Government later turned the freeze into a rent cap of 3% but decided it would only apply to tenants renting from private landlords.

But this was not extended to those renting from social sector landlords such as councils and housing associations who tend to provide lower cost accommodation taken by the poorest and most vulnerable in the country.

In February, the Scottish Government provided an extra £8.6m in direct support for people affected by the UK benefit cap as part of its work to tackle child poverty.

An estimated 4000 families with around 14,000 children were estimated to be able to apply for the extra financial support through the DHP scheme.

The benefit cap was first introduced in 2013 and places a maximum amount on the benefits a household can receive. According to the UK Government, it was established to promote a "fair and healthy society and maintain public confidence in the welfare system, by imposing a reasonable limit on the total amount a household can receive".

John Dickie, director of Child Poverty Action Group (CPAG) in Scotland, said: "It is absolutely right that the Scottish government is funding discretionary housing payments to support families bridge the gap between their actual housing costs and the all too limited support available through the UK social security system.

"Increased spending is largely being driven by the cost of mitigating the UK government’s bedroom tax and benefit cap, policies that need to be abolished at source.

"As cost-of-living pressures mount it’s vital that Scottish government funding for discretionary housing payments also continues to meet other rent shortfalls that people face, and that all those affected by the benefit cap make sure they apply for a discretionary housing payment to make up the loss in UK benefit.”