UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 288-vii i

House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

SCOTTISH AFFAIRS Committee

THE IMPACT OF THE BEDROOM TAX AND OTHER

CHANGES TO HOUSING BENEFIT IN SCOTLAND

wednesDAY 6 novemBER 2013

CLLR HARRY McGUIGAN and MICHAEL McCLEMENTS

Evidence heard in Public Questions 970 - 1060

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Oral Evidence

Taken before the Scottish Affairs Committee

on Wednesday 6 November 2013

Members present:

Mr Alan Reid (Chair)

Mike Crockart

Graeme Morrice

Pamela Nash

Sir Jim Paice

________________

In the absence of the Chairman, Mr Alan Reid was called to the Chair

Examination of Witnesses

Witnesses: Cllr Harry McGuigan, Community Well Being Spokesman, and Michael McClements, Policy Manager, Convention of Scottish Local Authorities (COSLA), gave evidence.

Q970Chair: Thank you very much for coming. To explain, I am Alan Reid, the MP for Argyll and Bute. I am the Vice-Chair of the Committee. I am chairing the meeting this afternoon. Ian Davidson, our Chair, apologises that, because of the shipyard statement a couple of hours ago, which is obviously an important issue for his constituency, he is dealing with some of the implications of it but hopes to be here later in the meeting. Thank you very much for coming. Maybe you can start by introducing ourselves.

Cllr McGuigan: My name is Harry McGuigan. I am a councillor in North Lanarkshire up in Scotland and am the COSLA spokesperson for community well being and safety.

Michael McClements: I am Michael McClements, policy manager for COSLA.

Q971Chair: Maybe we can start off by asking you to tell us the main findings of the initial survey of local authorities that you carried out in May.

Cllr McGuigan: Perhaps I could start by embarking upon why it was necessary to undertake that survey. I will refer to my notes so that I do not miss anything. I say to you in the first instance that COSLA is firmly opposed to the bedroom tax, which we consider to be ill-conceived, unfair and unworkable. We believe that it should be abolished. That is the fundamental statement I want to bring down to you here.

Chair: That is loud and clear.

Cllr McGuigan: I will move on to some of the detail later, but perhaps you will let me go through these points because they are very important. We believe that the bedroom tax will do little to increase the supply of housing in Scotland and that the UK Government have not done a sufficiently effective impact analysis of what the consequences, intended or otherwise, might be, particularly in Scotland. It is a bad concept and ill-considered.

Any savings to the UK Government, as COSLA predicted, are being passed on in increased rent arrears to councils and registered social landlords, and the distress is being passed on to all of us but is particularly acute for the tenants who are affected by this. All councillors in Scotland, and I am sure all MPs, are aware of the particular impacts. They turn up at my surgery, and I am sure they will turn up at yours. I am sure that is the case right throughout the UK.

Councils are doing what they can through discretionary housing benefits and other support to assist people, but discretionary housing benefits and payments were not set up for this kind of ongoing support arrangements. They were set up for crisis situations that would arise, not as a sustainable solution to something like this that has been imposed.

Our analysis and COSLA’s sampling of housing stock availability in Scotland shows that many tenants have no option whatsoever to move. I cannot emphasise that enough. It is crucial to understand that we have a situation-I am sure it applies across the UK too-that is particularly acute in Scotland where we have a big rented sector. There are no options available to them. There are simply not enough one-bedroom properties available, and we have checked and confirmed that. That is one big message that we want to bring down here.

There are many ways in which the bedroom tax is unfair. It is hitting people in council-owned temporary accommodation. We fail to understand why it hits that particular segment of housing while at the same time leased or licensed temporary accommodation, which is more typical in England than in Scotland, is not being hit. It would seem as if we are hitting those people who have no choice in the matter, and it is just wrong to do that.

You wanted some information on the survey. COSLA has had feedback from 26 councils-or 78%-across Scotland. The original discretionary housing payment allocation in Scotland was £10 million for the year 2013-14. Funds have been added since, mostly for very rural authorities, to take the DWP allocation up to £13.5 million in Scotland. Councils can add a maximum of 150% to that allocation. After very serious consultation with local government and others, the Scottish Government have recognised the need to deal with the pain caused by the bedroom tax in Scotland. They came in with £20 million to assist. I have to tell you that that was after considerable lobbying and persuasion being brought to bear there, but we were pleased to see that happening.

The total available in Scotland as far as discretionary housing payments are concerned is £33 million. Discretionary housing payment is not, however, just for the bedroom tax. It should not be seen as something used for bedroom tax, an imposed policy, but for housing need and hardship. That is what it was set up for, not as a sustainable means of implementing a policy that we think is quite a hideous one.

However, prior to the recent welfare reform changes, the Scottish allocation was about £2 million. The key findings at 30 September from 26 Scottish councils are as follows. Fifteen Scottish Councils, or 58%, have spent or committed 50% or more of their DWP discretionary housing payment allocation.

Q972Chair: Was that the original DWP amount?

Cllr McGuigan: That is 58% of the total DWP.

Q973Chair: Those are the two tranches of DWP money.

Cllr McGuigan: Yes.

Q974Chair: Am I right that that would not include the £20 million that came from the Scottish Government?

Cllr McGuigan: Yes.

Michael McClements: It includes the money allocated by DWP. That is the £10 million plus the additional rural money allocated in July. It does not include the £20 million from the Scottish Government, nor the bid fund of £20 million from the DWP.

Cllr McGuigan: It is also important to understand that local authorities did make up the DWP moneys to the maximum. We were allowed the 1.5 multiplier, which you will know about. Fifteen per cent. of councils in Scotland have spent or committed 100% or more of their DWP allocation.

Q975Mike Crockart: You made quite a wide statement there that all the councils had topped up to the maximum. That is not our understanding and is not the evidence that has been given to us. The evidence that we have had is that there is a wide variety.

Cllr McGuigan: I did not say that all councils had done that. We are dealing with 26 councils that replied here. We are not saying that even all of those 26 councils topped up to the maximum, although the information we have is that they are certainly moving towards that.

Michael McClements: As to the position at the end of May, we identified 14 councils who had topped up, not necessarily to the maximum. Some had topped up to the maximum, and quite a few were monitoring it with the intention that they would top up, depending on the demand for the fund. We now expect that everybody will top up to the maximum because of the money made available by the Scottish Government.

Mike Crockart: We are going to come back to this anyway.

Q976Chair: In terms of the survey, once that extra £20 million from the Scottish Government is added on, have you done any calculations to find out what that means as far as the percentage already committed by local authorities is concerned?

Cllr McGuigan: Just before you ask Mike whether he has that detail, can I finish my points?

Chair: Yes, of course.

Cllr McGuigan: I hope, Mike, that clears up that confusion there. Only three councils had spent less than 30% of their DWP allocation, and all were rural councils. At the end of September, those 26 councils had received 42,247 applications and had made 27,826 awards. There were successful awards in 66% of cases. Some of these are still being processed, so it may be higher than that. The total spend committed by those 26 councils at 30 September was roughly £7,431,000.

The picture is changing very quickly. We now expect to see an even sharper rise in the demand for DHP-discretionary housing payments. Councils at the moment are revisiting some of the failed applications submitted when it looked as if the money would be smaller than they currently have. They are also trying in some areas to target those people in receipt of housing benefit who will be victims of the bedroom tax and are unable to apply, or have not applied, for discretionary housing payment. We think there is a considerable audience of people out there in that particular category. Various authorities across Scotland are taking a set of proactive measures to try to make sure they maximise that and ensure that the resources go to those people who really need them. Mike, do you want to deal with that detail?

Michael McClements: On the DHP.

Q977Chair: Yes. The information that came out of the survey was before the £20 million was given by the Scottish Government. I just wondered whether you had had time to do fresh calculations to tell us the amount councils have spent as a percentage of what is now the total allocation.

Michael McClements: No, we have not. We found that those 26 councils had spent almost £7.5 million in total as at 30 September. We know that the position is changing quite rapidly. To give an example, Highland told us that a figure of about £300,000 had been spent at that point. Subsequent to that, I had an e-mail from Highland to say that by 21 October that figure had more than doubled, because they are doing a lot of proactive work. Remember, they will have had some of the rural top-up as well as a proportion of the £20 million. Therefore, £7.5 million was spent. We intend to go back and try and check the position every few months to get clarity of where the overall spend is, but most councils probably started the year profiling their expenditure on the assumption of what money was available. It has changed very rapidly, probably since the end of July. A lot of that has not yet fed into the spend patterns. Quite a lot of councils are now reviewing their practices. They are looking at previous awards, the criteria they applied and doing proactive work to target those who are identified as being hit by the bedroom tax but have not come forward for a DHP.

Q978Chair: You said that a figure of £7.5 million had been spent at the end of September. Is that your estimate of what all local authorities will have spent, or are those just the ones in the survey?

Michael McClements: They are 26 out of 32.

Q979Chair: Twenty-six out of 32 have spent £7.5 million.

Michael McClements: Yes.

Q980Chair: What is your estimate of what is the total amount of money available to those 26 authorities now for the whole year?

Michael McClements: It is probably about-well, I would need to look at it more closely-

Chair: A ballpark figure.

Michael McClements: It is 80% of £33 million. If anyone is good at the maths here, it is probably about-

Q981Chair: Is it something like £28 million or £29 million?

Michael McClements: Yes, £28 million, say.

Q982Chair: It sounds as if they have three times as much to spend in the second half as they spent in the first half of the year. Is that correct, roughly?

Cllr McGuigan: We would expect to see an overspend of the £33.5 million as far as bedroom tax is concerned.

Q983Chair: I think that is illegal.

Cllr McGuigan: But you are asking a question where the threshold is. I am telling you where the threshold is. We will reach a situation where we have exhausted the resources and there will still be increasing demand being made.

Q984Chair: We can go into more detailed discussion later. At the moment, I am just trying to establish the figures. Am I right in saying that, in rough terms, these 26 authorities had spent £7.5 million in the first half of the financial year, but your estimate is that, in total, they will have £28 million available to them for the whole financial year? Is that correct, roughly?

Michael McClements: As a ballpark figure, yes. They will not have known that until relatively recently.

Q985Chair: That is right. Some of the questions later on will go into it in more detail. At this stage we are just trying to establish something else.

Cllr McGuigan: To take one local authority, North Lanarkshire received 1,500 applications in April; in September, there were 3,500. It has rocketed. It is the same as far as the determinations are concerned. There were only 715 determinations made back in April; in May there were 1,100; in June, 2,100; in July, 2,700; and it has now jumped up to 3,000, so it is climbing all the time. To be fair, we are trying to make sure that we are alleviating some of the misery this is causing people who sometimes do not know where to turn and who to turn to. These people are not claiming discretionary housing payment to ease the pain. We are trying to make sure that we are taking that proactive action.

Chair: That is fine. We are seeking clarification at this stage. I know that Pamela wants to ask more detailed questions about DHPs later.

Q986Pamela Nash: Cllr McGuigan, does the figure of 3,500 that you gave relate to all applications, or is that just on bedroom tax?

Cllr McGuigan: That is for bedroom tax.

Pamela Nash: That is just for bedroom tax.

Q987Chair: I think you did a follow-up survey of six local authorities. Is that correct?

Michael McClements: In recent weeks we did a survey of six local authorities to get clarity about the position on rent arrears.

Q988Chair: Can you tell us, first of all, which six local authorities were chosen, and whether there was any particular reason for choosing them?

Cllr McGuigan: The six local authorities chosen to give a good geographic and demographic spread were: Highland; North Lanarkshire; North Ayshire; Fife; Edinburgh; and Dundee. The number of people in Highland who would be affected by the under-occupancy reduction of the bedroom tax was 623. Do you want me to give you these figures or do you have them?

Q989Chair: We are just trying to get the figures at the moment to set the scene, so please give them.

Cllr McGuigan: In summary, those six councils identified 20,021 tenants impacted by the bedroom tax or by under-occupancy. Thirty-seven per cent, or 7,500, were in arrears on 31 March before the bedroom tax came in. On 30 September, after the introduction of bedroom tax, the arrears in those six councils had risen to 68%, 13,712 people, which is a rise of 31%. Arrears at 30 September were 41%, which translates to just over £5 million higher than in the same period last year. That is an extremely gruesome and worrying scenario that is developing.

Michael McClements: The 20,021 impacted in those six councils are just council tenants, because those were the only data on which they had arrears information. In the survey in May we found that, altogether, there were 82,500 people in Scotland impacted by under-occupancy measures, of whom 47,500 were in councils.

Q990Chair: Have you noticed a difference between local authorities that are still landlords and those that are no longer landlords in how they have reacted to the bedroom tax?

Michael McClements: In relation to DHPs or rent arrears?

Chair: In general.

Michael McClements: All local authorities are basically working closely with their partners in their areas. Advice agencies and registered social landlords publicise, if you like, the assistance that is available. We have not seen any real difference in the spend levels. To take the example of Glasgow, which is the biggest local authority, I know the Committee has heard from that authority. Their spend levels are around the middle range of authorities just now. There is nothing that would suggest that those authorities that are not landlords are spending less of the resource than those that are.

Q991Chair: Did your survey show whether there had been any changes in under-occupancy rates since the bedroom tax came in?

Michael McClements: It is difficult. We know that the figure changes and people come off and go on to housing benefit; some people’s circumstances will change. We did not specifically ask that question.

Q992Chair: It seems an obvious question to ask. Why did you not ask it? That is one of the purposes of the policy, so it seems an obvious question to ask.

Michael McClements: It has probably not changed that much. For example, we know that 48% of all council tenants in Scotland are in those six authorities, so the figure we got was 20,021. The figure at the end of May for all council tenants was 47,500, so that does not suggest a lot of movement. Maybe there are a couple of thousand in there.

Q993Chair: Are you saying you think that a couple of thousand have downsized? Is that what you are saying?

Michael McClements: No. I think it is difficult to pin it down unless you look at every authority.

Cllr McGuigan: That is something we would want to investigate; we would want to get a better understanding of it. This is moving at a pace that makes it very difficult to capture that information at this moment in time. It is certainly something we will be looking at, and we will make sure that information does get fed back to you. We are trying ensure that we work with our partners in the private and social housing sectors-the RSLs. We are not hostile to the idea that people should make their homes available, if it is suitable for them to do that and they have homes they can move into-one-bedroom homes from two-bedroom homes-and if they want to do that. We are working to try and make sure that we have an allocation policy that is sensible and that we are advertising well enough mutual exchanges so that people can move. We will work proactively where we think it is in the best interests of the tenants themselves; indeed, that is something we would also try to do-and, indeed, have always tried to do-in local authorities. We will try to get that information.

Q994Graeme Morrice: Good afternoon, gentlemen, and good to see you again, Harry. I want to touch on the issue of the behaviour of those tenants who have been impacted by the bedroom tax. In the report that went to your executive group back in August you mentioned that four out of every five councils are receiving half or less of additional rent now due from tenants; three out of five councils are receiving 40% or less of the missing revenue. You also say in your report that most of the councils put this down entirely to the under-occupancy deduction in housing benefit. On the basis that any tenant having to pay this additional amount will not be particularly happy about it, what kind of change in behaviour have you seen from these tenants? Presumably, many of them will be beating paths to the door of housing providers in an attempt to downsize, whether through an allocation or a mutual exchange. As we discussed earlier, those eligible would be applying for discretionary housing payments. Maybe people are taking in lodgers to avoid having to pay it. Can you give us some tangible evidence, following the survey, that you had from your local authority members about that change of behaviour, and what kind of patterns you are seeing as a result of that?

Cllr McGuigan: The tangible evidence is that it is an extremely difficult undertaking to secure and capture in finding the accommodation that people would need to move into a situation where they were safe from that incursion into their finances in having to pay the bedroom tax and find that money. As I said earlier, lots of things have been happening. Some happened prior to the bedroom tax coming in, but there is an intensification of it to try to make sure that we discuss with people in that situation the best ways and means of alleviating them from the pain. Have we got statistics on that? I think we do have some data, certainly from North Lanarkshire.

Michael McClements: Generally, councils have been following up the individuals who are impacted, discussing how they are going to pay their rent and offering them assistance. They have offered them benefit cheques and discretionary housing payments. A lot of them have also been referring people to employability services, where they want that. From recollection, in North Lanarkshire, an additional 531 people have been referred to employability services.

The main way to avoid the penalty is either to secure employment or move. In a lot of areas of Scotland, securing employment is not that easy for everyone. It will take some time. They are heavily dependent in the meantime.

As to stock availability, our inquiries have suggested the general picture is that there are not nearly enough two-bedroom houses and particularly one-bedroom houses, because about 68,000 of the people in Scotland have been hit with the one-bedroom penalty. The majority of people would require to downsize to one-bedroom accommodation, so we know that is not available. The Scottish Government statistics from 2009-10, which I think are the last available, suggest that in any one year only about 21,000 one-bedroom properties are available in the social sector in Scotland.

Q995Graeme Morrice: We accept that. We have had evidence in the past from other witnesses that there is a real problem in terms of the shortage of suitable accommodation for people wishing to downsize. We all accept that is one of the big problems with the bedroom tax. Nevertheless, can you give us some indication, even roughly, of how many who are affected by the bedroom tax are trying to get smaller accommodation? Is it most of them, half or less than half? Do you have any kind of tangible or anecdotal information on that from your survey of local authority members? Have you seen a big rush of people to try to get smaller housing as a result of the bedroom tax?

Cllr McGuigan: One of the things that we have to bear in mind here is that we have local housing strategies that are worked out across councils and other public sector RSL agencies and so on. We have strategic housing investment plans and programmes. They are developed usually with a five-year vision. They identify the needs within the particular locality or area and work to address them. In a situation where we have a bedroom tax and arrears accumulating as a consequence of that, that will impact on those local housing strategies and distort them in a way that is extremely unhelpful to what we are trying to achieve. Remember this: at the last count, in North Lanarkshire there were about 12,000 people on its waiting list aspiring to move from a two-roomed apartment to a three-roomed apartment, or one-roomed apartment into a two-roomed apartment, but the availability of those properties is very small. That has to be factored into the whole consideration of trying to find accommodation for those people affected by the bedroom tax. If all of them were to move out tomorrow, it would still not solve the problem of housing. Even if we received the funds needed to build all these new one-bedroom houses, and it was a sensible thing to do in terms of the housing strategy-even if we received all of the money to do that-it would take between three and 10 years to achieve it.

Surely, Governments have a responsibility to understand the consequences of the legislation they put through, and that certain things have to be put in place before you aim at an aspired target. This certainly has not happened here. It may have happened in some areas of England; I do not know, but it certainly has not happened in Scotland where we have a shortage of the very type of house that many people, who are affected by the bedroom tax, are looking for. We cannot build those houses; we cannot somehow conjure them up out of nothing. That is a big, big issue. I hope that helps, Graeme.

Q996Graeme Morrice: As always, Harry, it certainly helps. What is factored into local authority strategic housing plans will be primarily family and special needs housing; there won’t particularly be a lot of one-bedroom properties, I would assume. It is not like the good old days when these were provided just for pensioners.

Can I touch on the issue of allocations? You mentioned that, apart from those in bigger properties being hit by the bedroom tax and wanting to downsize, there are tens, if not hundreds, of thousands of other people on local authority and other housing association waiting lists. We have talked about changing the pattern of behaviour among tenants, but we are going to see that with the housing providers because of the changed circumstances. Are we seeing local authorities re-prioritising their housing allocation policies to give greater weight to those who are impacted by the bedroom tax and trying to get smaller properties, compared with those already on the list who are not impacted by it? I know it is a difficult one for everybody, but are we seeing any kind of re-prioritisation in housing allocation rules?

Cllr McGuigan: I think we are. There are some wise and unwise authorities. I will not name the local authorities, but there is one in particular which offers financial incentives to people to move out of their houses. Very often, that is a short-term benefit as far as the tenant is concerned. The attraction of receiving a sum of money seems good at the time, but six months down the line they are not so happy. They have moved and in some cases have lost the support of community in particular localities.

We want to see people living in the types of homes that meet and interface with their needs. To take North Lanarkshire, which I am more familiar with than anywhere else, the allocation policy recognises that and gives priority to people in these difficult situations. It is not something that is supported by all of the people on the waiting list because it increases competition for other houses.

On the whole business of allocation, many people in Scotland think that when they are allocated a house it is a house for life. It meets their needs at a particular moment in time. Maybe 20 years later it does not; the children have gone and so on. They do not expect a chap at the door telling them they now have to pay 14% or 25% more out of the very small incomes that most of these families have. It is a very hurtful shock to them if they have to move out of a home that has emotional and social attachments. It is as if the contract with their local authority, the UK Government and Scottish Government has been broken and they have been cheated in some way. They did not know that an extra bedroom was being subsidised. The term "subsidy" did not come in anywhere.

There are parallels in other countries in Europe. Certainly, the German situation is one where need is always the priority. When a social house is allocated, they know perfectly well that, if the composition of the household changes, they will be required to move. That is part of the contract that has been established in Germany. I know it to be the case there. People in that country would not feel it was a terrible thing to happen, but when the contract is one like this, which is very different, it will receive a very different reception from tenants.

Q997Graeme Morrice: To follow on what you just said, which is developing a very interesting theme, if we look at social housing policy in Scotland, underpinned by statute and legislation through the Scottish Parliament, it is based primarily on housing need. You mentioned that earlier. It is not based on your financial situation but on your housing need, and I think that is right. How do we square the circle in terms of local authorities adjusting the housing allocation policy to try to prioritise those impacted by the bedroom tax who are looking to downsize, because that is not about housing need but the financial situation? I do not disagree that local authorities should be helping out there of course, but how does that equate to the current legislative framework in Scotland with regard to social housing policy, which has to be based on allocation to those in housing need?

Michael McClements: A number of authorities have looked at their allocation policies, but they have been developed quite often over many years and they have taken account of local circumstances in terms of available housing and the needs of the area. For example, homeless people will have priority in a lot of situations in terms of access to houses and people whose needs would suggest that they require a larger or smaller house. If suddenly you add to that new people who are coming forward as a consequence of the bedroom tax, local authorities cannot just discard the way in which they have determined who should have priority and who has the greatest need for a particular house.

Q998Graeme Morrice: It is the law of the land of course.

Michael McClements: Yes. I know there are authorities who are reviewing their policies. For example, in some authorities, if you have rent arrears, it is very difficult to get any house. The perverse situation here is that people are almost put into rent arrears from the start and then, in order to get out of rent arrears, they need to move. Some authorities are looking at how to handle that situation and make it easier for people. We are talking about a resource of smaller houses that was over-subscribed in terms of existing demand before the bedroom tax came in. That is not a situation that can easily be absorbed, nor can local authorities ignore how they define housing need in terms of local circumstances.

Cllr McGuigan: If we look at the sample we were talking about-Fife, North
Ayshire and so on-it is said: "In total, these councils estimated availability of 4,697 one-bedrooms and 5,337 two bedrooms. For these local authorities, 18,000 tenants are subject to a one-bedroom reduction and 4,229 to a two-bedroom reduction. To put these figures into context, North Lanarkshire"-I keep repeating it, but of course it is the best council in Scotland-

Graeme Morrice: The second best, Harry.

Cllr McGuigan: -"identified 12,390 applicants on its common housing register requiring one or two-bedroom property at April 2013, with a total annual availability of property at 2,811." It would take years to sort all of that out. We are working at it, as we always do, but this is a big worry for us, Graeme. I am very worried-and I know local authorities across Scotland are very worried-that we will see arrears accumulate, more problems for local authorities to handle but fewer resources to deal with the issues that need to be dealt with to achieve the outcomes. There are some well-intended outcomes in the welfare reform that is taking place. There may well have been some well-intended outcomes as far as the bedroom tax situation is concerned, but we need the resources to help us do that job. If we are hit with arrears, we will not have those resources and the situation will get worse. It seems so simple.

Q999Mike Crockart: How many tenants are actually affected by the reduction? Last week, the Scottish housing regulator, who produced a report, gave evidence to us. That report gave a substantially different figure from the one you produced. They came up with 59,818 tenants, whereas your estimate is 82,500. We tried to pin down with them why there was such a difference. Do you have any information you could add to that?

Cllr McGuigan: I am going to ask Mike to answer that one.

Michael McClements: Our figure was one that we got at the end of May, so there will be some movement or change in that figure now. I do not think it will be substantially changed. We think that is a fairly robust figure, because it was provided by the benefits services in the individual councils to the people to whom they were then applying the under-occupancy reduction to housing benefit. That is almost at source, if you like. We got a 92% return. Thirty councils had given us figures. We made an estimate based on that to get to the figure of 82,000. We think that is a fairly robust figure in terms of the numbers that were then impacted by the bedroom tax. There will be some movement up and down; the figures are fluctuating. We are not aware that the figures are coming down dramatically in any way, but that is probably a more reliable figure because, as I understand it, the regulator got their figure from the RSLs who replied to their survey. While they got a fairly good return, it would not have included everyone, whereas we were not going to the landlords; we were getting the figure from the benefit services in the councils.

Q1000Mike Crockart: Those figures from the benefit service would take in both the council side and the RSL side.

Michael McClements: Yes. There are 47,500 council tenants impacted and 35,000 RSLs impacted by it.

Q1001Mike Crockart: One of the things that they thought could partially explain the discrepancy is the difference in housing stock between RSLs and councils, and potentially the higher proportion of council tenants affected by it as opposed to RSL tenants.

Michael McClements: It may be a slightly higher proportion on those figures. The latest figure I have seen is that councils have 54% of the social housing stock in Scotland, so 47,500 versus 35,000 suggests there are proportionately more in the council sector but not to a very marked degree.

Q1002Mike Crockart: You are fairly confident that your figure is the more accurate one because it comes from a source where the benefits have been decided.

Michael McClements: It is coming from the benefits service within the councils who are applying the under-occupancy changes to the housing benefit, so those are source figures as opposed to landlord figures.

Cllr McGuigan: We heard that evidence being given, and it is something I have now asked to be investigated. I want to be absolutely guaranteed that we are talking about the same thing, and it is a good question to put.

Q1003Pamela Nash: In the beginning you clearly stated that DHPs were supposed to be for crisis situations and not long-term planning. Can you tell us more about the evidence that COSLA has seen of how important they have been in mitigating the full impact of the bedroom tax?

Cllr McGuigan: Pamela, can I say that prior to welfare reform the total amount made available for discretionary housing payment crisis situations in the lives of tenants was about £2 million for the whole of Scotland? It is important to bear that in mind.

Michael McClements: In terms of the difference, whatever figures we have seen in rent arrears, the amount paid out so far in discretionary housing payments will be reducing. We expect that to be more so as councils are perhaps more proactive, now that they have additional resource and are utilising discretionary housing payment. The total fund available when all the money is added in is about £33 million. If authorities bid for the £20 million from DWP, that might take that up to about £35 million or something like that. The estimate I have seen of the impact of under-occupancy in Scotland is about £50 million. Even if all that money is spent, it will not cover all the impact, and arrears will be seen as a result of this.

The arrears in councils are still looking high. The six councils we looked at were showing a 41% increase in gross arrears from 30 September 2012 to 30 September 2013. Not all of that may be to do with the bedroom tax, but it is probably the most significant thing that has been going on. The regulator mentioned seasonal factors, but, given that is over six months into the year, I think you would see some of those seasonal factors having worked themselves through.

Cllr McGuigan: Can I add to that, and it is another important consideration here? It worries me a little that local authorities will become-I will not use the word "obsessed"-more focused on the bedroom tax and the support needs and resources that need to go into that. We could find ourselves in a situation where those other cases for which discretionary housing payment was set up become less prominent in receiving attention than they should. That is something we have to be diligent about. They should make sure that, for the other casualties that need to access DHP, it is still doing what it was set up to do. As far as I am concerned, this can be only a very temporary measure. I am not even sure it will continue next year. We do not know what resources will be coming from the DWP.

Q1004Pamela Nash: That was what I was going to go into. First of all, is there any indication so far that the requirement for these DHPs is reducing? My understanding is that people are not moving, certainly in Scotland and North Lanarkshire, into smaller properties yet because they are not available, and their circumstances are not significantly changing. Has COSLA seen evidence elsewhere in Scotland that would indicate we would need less than £50 million next year?

Michael McClements: There is no evidence that the demand for DHPs is tailing off. I do not think we are seeing that. The numbers are continuing to rise, and they are significant. Because councils have had additional funds made available, they are reviewing previous applications for DHPs where perhaps they have determined they will pay a percentage of the loss suffered, or they will pay it for a few months. They are reviewing those judgments and going back over those judgments to see if there is additional help that they can give people. We also do not know what is available next year. As far as I know, the DWP has not announced the moneys that are available next year. The Scottish Government have given an indication that they will make available the £20 million again next year, but whether that can be used wholly for DHPs depends to some extent on the DWP.

Q1005Pamela Nash: I was not aware of that. Has it been confirmed that the Scottish Government will make available £20 million?

Cllr McGuigan: No, it has not been confirmed.

Q1006Chair: Have they set a figure of £20 million? I understood that figure was calculated at 150% times whatever DWP had put in, so presumably, if the Scottish Government’s policy remains unchanged next year, the amount they put in will be a percentage of what the UK Government put in. Is that your understanding?

Cllr McGuigan: No, I am not aware of that calculation.

Michael McClements: I think they made available £20 million to assist local authorities to deal with the consequences of the bedroom tax.

Q1007Chair: I thought that £20 million was calculated so that local authorities could all spend 250% of the UK Government’s allocation because the legislation puts a cap on what the local authority can put in. Is my understanding correct?

Michael McClements: If £20 million was made available by the Scottish Government next year, for example, and DWP made available less DHP moneys, it could not be spent as discretionary housing payments. There may be other ways in which councils could spend that money-for example, on some of the homelessness consequences and so on-but not as discretionary housing payments.

Q1008Chair: Have the Scottish Government ring-fenced that £20 million for particular purposes, or is it available to local authorities to spend on anything they want?

Michael McClements: My understanding is that it was made available to assist authorities to deal with the consequences of the bedroom tax and the welfare reform changes.

Cllr McGuigan: It was welfare reform changes.

Michael McClements: I do not think it is tied just to DHPs.

Q1009Chair: But is it ring-fenced?

Michael McClements: I think there is a degree of discretion. There is an expectation that authorities will use it to increase their DHP budgets.

Cllr McGuigan: There is no question but that that is the calculation that has taken place. It is expected that that is how it would be used. "Ring-fenced" can mean almost a Big Brother approach to these things. We do not like ring fencing too much in Scotland. That is not because we would spend the money on other things; it is simply because we believe we know how the money can best be spent locally. We know the best way to spend that money to meet the needs of the locality, but all the evidence has shown that that money will be spent on DHP. But I make the point again that it should not be spent on DHP. We should not be facing a situation where discretionary housing payment becomes a rollover to sustain housing benefit money. That is not what it was set up for at all. We have to deal with the policy here and recognise its deficiencies.

Q1010Pamela Nash: On the additional costs, were councils given any additional funding from DWP at all to administer the requirements of DHP, and has that fully met the additional cost of administration?

Cllr McGuigan: Yes, they were. That is not included in those figures; it does not come out of the money we are talking about here. That was money that had to be negotiated with DWP. You never receive all that you want, but I think in the main we are reasonably satisfied.

Q1011Pamela Nash: I understand. For us to calculate the cost-benefit analysis of bedroom tax throughout the country, we have to include also how much the UK Government have spent on administering those benefits.

Michael McClements: There was a sum of £10 million made available by DWP, but it was not just for the administration. It was to assist-

Q1012Pamela Nash: Was it £10 million across the UK?

Michael McClements: Yes, that was in the UK; so it was probably £1 million in Scotland. What we hear from councils is that administration of discretionary housing payments is a very big burden on them. It is not always shown as additional spending; it is about allocating even the different duties.

Q1013Pamela Nash: But that is a spend; it is salaries.

Michael McClements: Yes, absolutely.

Q1014Pamela Nash: Has there been any analysis of that yet, or would it be possible to have an analysis of the costs to local government to administer it?

Cllr McGuigan: We would expect to be able to get that information.

Michael McClements: It is quite complex, but we would probably do some sampling on how that is accounted for. We know from feedback that this is a considerable burden, and we are absolutely convinced that any saving to the UK Government has been shown in rent arrears, DHP spend and additional burdens on councils and RSLs in dealing with this.

Q1015Pamela Nash: To go back to the point made by Mr Reid, at the beginning you highlighted that only £2 million was available for DHP before the introduction of this. Do you think that reflects the proportion of DHP that has been spent on bedroom tax now?

Michael McClements: We have not specifically asked what the awards are made for. It is clear, just in terms of the size of awards and the number of applications, that the bulk of the spend is on the bedroom tax. The numbers in May were about four to six times the normal demand for DHPs. Some councils have told us about an eightfold increase in demand, but there are other things for which people can make application for DHPs, not just social sector tenants but private tenants, who can demonstrate housing need. For example, DHP could be used for deposits being paid to secure a house, if you are in receipt of housing benefit.

Q1016Pamela Nash: If you are doing a follow-up survey, could you add that as a question, as well as the admin cost?

Michael McClements: We will see if we can get a breakdown of other non-bedroom tax matters.

Cllr McGuigan: Pamela, you ask a good question. We should look at that to make sure there are not other casualties that are not being given the attention they should be.

Q1017Pamela Nash: I was just going to say that. Is there evidence that councils are being-I wouldn’t say overly-cautious-ultra-cautious about these funds because other benefit changes are coming up for which they might need DHP money?

Cllr McGuigan: Possibly at the beginning, there has been, but I would hope that, since the additional resources have become available, that hesitancy will have disappeared. It should never have not been getting applied to the cases that Michael just explained. It is a question we have to keep asking to make sure that we review the number of cases coming through. We will try to get that information to the Committee.

Q1018Pamela Nash: Previously we took evidence from Shelter Scotland. One of the concerns they raised was the possibility of a postcode lottery in Scotland in terms of DHPs. There was concern that there was considerable variation in both the criteria in awarding DHP to people but also in how councils decided how much was put into the DHP fund. Mike asked for clarification earlier. The evidence we have seen is that all councils are not putting in or topping up the DHP fund. It is clearly called discretionary for that reason because it should be moulded to fit the requirements of that area. Is COSLA confident that that variation is based on need in different areas, or do you have any concerns that a postcode lottery is in place and perhaps that needs are not being met uniformly across Scotland?

Cllr McGuigan: The term "postcode lottery" is one that I don’t like, quite honestly-I know we do come across it-because it suggests that there is a dereliction of duty by local authorities, and I find that hard to understand. Local authorities, working with colleagues and other partner agencies, are best placed to identify the needs, priorities and what services communities want to see in those areas. I have great regard for my colleagues in Shelter, but what they might call a postcode lottery are simply different needs that require to be met in a particular locality and those being prioritised because there is a heavier call for resources to be used in that particular way. Convincing evidence would need to come forward from Shelter to show that there was a dereliction of duty.

Q1019Pamela Nash: I suppose I was asking if you had seen any evidence of that.

Cllr McGuigan: No.

Q1020Pamela Nash: It is clear that money is being spent at different levels in different areas of the country, and, of course, that should be the case because of variation in need. I was just checking whether COSLA had seen evidence to the contrary and if it has any concerns that perhaps some areas are not applying it.

Cllr McGuigan: We are very aware of the fact that not all local authorities went for the 1.5 resource increase in the DWP moneys allocated to them. Some went for 30% of that; some went for the whole 150%. That is a matter for the local authority. If there was a rogue local authority that was not evidencing that there were real reasons for spending such a low amount, because they are meeting it in some other way, that would be of concern to me and my colleagues in COSLA.

Michael McClements: In so far as there would be a difference between authorities, it would probably have been reduced now with the additional £20 million made available by the Scottish Government. Fourteen authorities had done some top-up in May. We would anticipate that all authorities will now top up to the maximum, so that element would change. We see a different spend pattern in some authorities, but those that probably had the least spend were some of the rural ones who had also had a similar need to top up. I think it is just a time difference. Everyone is now focused on trying to help the people who need it and target those who have not come forward at the moment. We would expect to see some of that even out over time.

Q1021Pamela Nash: Shelter produced a paper with guidelines for local authorities. Is this something of which you are aware? Were COSLA and local authorities using this, or were there any other guidelines available to local authorities on how much they should top up and award DHP?

Cllr McGuigan: I hope we would always listen to the representations that have been made by COSLA and that, where local authorities felt it was appropriate to be implementing their views and it would be helpful to them, that would be the case, but we would not regard Shelter’s recommendations as necessarily prescriptive ones.

Q1022Pamela Nash: But they would be distributed and considered.

Cllr McGuigan: Of course.

Q1023Mike Crockart: There is an inconsistency in what you are arguing. You have got to defend the decisions councils have made and the different allocations and top-ups that each has chosen to make, but it is quite a wide variety from some choosing not to top up anything at all to some using the full 150%. To say that that is based on their assessment of the need in their areas seems to suggest an amazing difference in need. If that is the case, surely you should be arguing that the extra money being allocated from the Scottish Government should be allocated on the basis of that need assessment that the councils have already done, but that is not what is happening. The money from the Scottish Government is being allocated across all councils based on the original DWP allocation. Both sets of circumstances cannot be true.

Michael McClements: Some councils chose to top up early on. Quite a lot of councils decided to monitor the situation, to see the level of demand coming forward and how they would meet it. Those who did choose to top up had to make a decision about relative priorities. Wherever they are taking that money, they are taking it from somewhere else. As you are well aware, councils are under a lot of pressures, and they would have to identify where those top-ups would come from within their budgets. There is a variation in how councils felt able to provide that money at the start. That variation will probably not exist now to the same extent in Scotland.

Q1024Mike Crockart: That is the point that Shelter is making. The variation in the decisions made by councils at the start is what Shelter is describing as a postcode lottery.

Michael McClements: It is a discretionary housing fund; it is a power to top this up, so each authority would have to determine the biggest priority in their area. There may be other housing priorities to which they would have to give more attention. The reality now is that they are all pretty much likely to top up to the maximum now that additional moneys have come forward, but it is about balancing those priorities. After all, this need has been created by a UK Government policy; it is not one that has arisen because of objective housing need there. This is a purely subjective need created because the UK Government made a change in policy. Therefore, councils had to consider whether or not to fund that need that has now been created by central Government.

Cllr McGuigan: To bring it back to the UK Government, they instituted the policy but they are not responsible for the consequences. We find ourselves in a situation where there is no question that arrears would accumulate, because there are no homes for the people living in the subsidised houses, as they would call them, to go to. Instead of this being seen in any way as a subsidy, it is simply taking money from local authorities. That is what is happening. The discretionary housing payments that are subsidising this particular policy are coming from resources that local authorities could use on other services. Shelter is the same as the rest of us; it has to look at that broader picture.

Q1025Mike Crockart: We have wandered rather from the point of the question, which was that you were saying that the allocations were based on need. Councils had looked at their individual circumstances and allocated their top-up on the basis of need, but, now that this extra money is available, suddenly the need will be found to use that extra money. That is where the inconsistency resides.

Cllr McGuigan: Extra money has been found. The threshold at which we say, "That is a priority one need or a priority two need" is always there; it is moving all the time. It has moved since last May, when it was a very low threshold for applications. There was a high failure to secure DHPs because councils were guarded about whether this money would be available to them through the year to compensate for all of the crises that could arise, but the picture has changed. A priority one need might now be up there.

Q1026Mike Crockart: With respect, you are now making Shelter’s argument. Those councils that topped up to the full extent at the start set their hurdle much lower because they had allocated the extra money themselves, whereas for some councils, who potentially had not allocated extra money but who now have and are now reassessing, their decisions were made on very different criteria. That is the point Shelter was making. Because of those different top-ups, the decisions being made were very inconsistent. I guess you would argue that, with the same allocation now available across all councils, that will equalise itself, but that does not remove the point.

Cllr McGuigan: That may be the case. Can I just simply say this? Councils have a responsibility to ensure that they deal with the difficulties that arise day in, day out in communities. When we see a situation where the misery that is being created by the bedroom tax is such that it causes us to have grave concern for the welfare of the people we represent-for example, my own authority of North Lanarkshire was one of the 14 that maximised the top-up straight away-we make the decisions accordingly. I cannot answer for every local authority in Scotland, but I think that the vast majority of them were being maybe a bit more studious, and perhaps waiting to see if they could get extra money before committing themselves. If that extra money was not coming, I think they would still have had to commit to doing what we did in North Lanarkshire and what the other 14 local authorities across Scotland have done.

Mike Crockart: I am not so sure.

Chair: We have got to the stage where we are debating the same ground, so let’s move on.

Q1027Pamela Nash: There has been recent press coverage of local authorities, including, dare I say, North Lanarkshire council, who have topped up 150% but still have quite a lot more money left in the fund than was expected. Clearly, this is not an indication of need because the arrears still being accumulated show that. What are local authorities doing to promote the availability of DHPs and available support, and what more could local authorities be doing?

Michael McClements: The position of North Lanarkshire at the moment is that they have spent 124% of the money made available by DWP for DHPs. They are now eating into their top-up money, and we are halfway through the year in that respect. A lot of other authorities, who had set their policies to try to make sure the funding available lasted throughout most of the year, are now reviewing the policies and revisiting previous determinations they had made. A number have identified people who they see going into rent arrears but have not come forward and asked for DHPs. The position changes all the time. I know Renfrewshire council identified 1,800 people who had a rent reduction as a consequence of the under-occupancy measures and at that point only 600 had made application for DHPs.

Q1028Pamela Nash: I suppose that is what I am trying to get at. Is there any analysis of that or do you have any idea of the reason for that? Why are people who are entitled to it not applying?

Michael McClements: You could speculate. Some people will perhaps not have been used to having to pay the rent. They will have had letters through their doors; they may have put those letters to one side and may not have realised. The reality is that, to ensure those people do not get further into rent arrears and have a problem themselves, a lot of councils have now realised that they need to be proactive. A lot of them are doing home visits, for example. Having said that, even doing home visits-and I have seen the figures from some councils-they are not managing to reach everyone. For a council to do that is very labour- intensive and is a costly exercise, but quite often councils are doing that. Highland’s figures of spend have doubled in less than a month because they are taking that sort of proactive approach.

Cllr McGuigan: There is no easy way of doing this. You cannot assume that, because you go out there and publicise something, even with extensive coverage of a particular issue, people will become aware of it. Many people-God help them-do not have the competencies or responsibility to make themselves aware of it and tune into that type of thing. There is no stereotyped Mr Public out there.

Q1029Pamela Nash: I understand that. I am sure all representatives here told constituents about DHPs, and months in they still had not heard of it or picked it up. What more can be done? There are still people who are just not getting reached. Also, is there an issue with the application process at all? Could that be simplified for people? Is it putting people off?

Michael McClements: Councils are looking at that. People have to apply; that is the way DHPs have to work. You have to have an application. I know that Highland, for example, has looked at a simplified application form, and other councils are looking just now at how they can reach people.

Q1030Pamela Nash: Is the design of the application form in the hands of each local authority?

Michael McClements: Yes.

Q1031Pamela Nash: It is not a standard form for Scotland or across the UK.

Michael McClements: No. It is left to local authorities to determine, but authorities are now looking at any barriers to people making application and ways to highlight, publicise and work with partners to identify those people for whom they have to target assistance. Those are all in the figures now.

Q1032Pamela Nash: How does COSLA share best practice in areas like this? Obviously, some local authorities will have better experience. How is that done? Is it a formal process, or how would you do that?

Michael McClements: Because it is concerned primarily with policy we do try to encourage best practice. We share information that we get about the spend and what other authorities are doing. Councils obviously pick up from each other. That is clearly happening at the moment. Information about what we are identifying that we make available to you will go out to all the councils, but we are not an improvement organisation as such. We are not the only ones who can share best practice, but we certainly do what we can to encourage authorities to share information among themselves.

Cllr McGuigan: We do what we can. Graeme sat on many of the committees of COSLA and saw how it worked. COSLA cannot direct its member councils to do any particular thing. It can provide good advice and information to them to encourage them to learn from best practice happening at the moment across Scotland. We are constantly alert to that need, no more so than in DHP, to make sure that we help councils achieve the best outcomes for people that we can.

Pamela Nash: Exactly.

Q1033Mike Crockart: Having fallen out with the Chair over statistics at the previous session, I have now been given all those questions. I want to look at the data gathering you do, and whether there are any particular things you would have liked to have known but did not manage to get the data to back it up. We have already talked about not knowing the number of people who are downsizing or the exact proportion of DHP spent on the bedroom tax. You have talked about a feeling about the general picture of a mismatch in housing stock between the demand for particular property types and the supply, but do you have detailed information on those? Is it something you are planning to get? What is the future?

Michael McClements: COSLA does not have an analytical research capacity, so our ability to gather this information is constrained by the size of the organisation and the resources it has. We share with other organisations. For example, stock analysis is quite complex. We have tended to do some sampling of those kinds of things rather than try to check the position with every council. For example, at the end of June we did a survey jointly with the Scottish Government. We were intending to repeat that survey and ask more refined questions, but the Scottish housing regulator was then doing a survey and we thought we would await the outcome of that before we determined whether we should do something else, because a lot of people are seeking the same information from the same people. We certainly want to be clear about the rent arrears position going forward and what has happened with DHPs.

We did a good practice event last year, and we will do one in the new year, not just on the bedroom tax but the general challenges to housing delivery because of a lot of the welfare reform changes. We are looking at the bedroom tax but also looking forward to the implications of direct payments and so on, and sharing practice on what has been happening. So we will do that, but, with regard to analysis of some of the very sophisticated stuff about allocations, demand and housing registers, for example, we would not have the capacity to gather all that information across all 32 councils. Some of it is quite hard. To gather some of that stuff is almost an academic study.

Q1034Mike Crockart: There are two aspects to the question: there is the part about gathering information, which perhaps you are uniquely best placed to do, and then the analysis. If you were able to gather the information, you would not necessarily then have to do the analysis. There are plenty of other organisations that would love to get their hands on the data and put some meaning into them. It is difficult for this Committee to come up with recommendations, unless it is able to back them up with evidence about what the impact is and what difficulties people face in being able to move to a smaller house. For that we really need to know the detail of the housing stock, especially geographical factors and how difficult it is for people to change their behaviour. Therefore, if you have that opportunity, it would be useful to gain more information to help the debate.

Cllr McGuigan: We would obviously desire to be able to provide as much information as we can to help you to combat the worst features of this legislative faux pas, as I would call it. We would try our very best to get that information. It would not be a routine undertaking on which we would embark; it would be an undertaking to try to get into some of the detail of this in a way that can help you. I can certainly give you a commitment that we will try to do that as best we can at the COSLA end.

Q1035Mike Crockart: DWP have said that they are going to do a study of the impact of the bedroom tax. Do you have any information about when they are likely to publish their findings? I take it you would want to make the point that you would want to have it sooner rather than later.

Michael McClements: Our concern is that they seem to be talking about a two-year independent review. We need to see their analysis of what is going on. You are asking about data, but our concern, overall, is that we do not think there was a proper impact analysis done when this policy was dreamed up, if you like. What has been encountered is what a lot of people predicted at the time this change was going through the legislative process. We think it is important that DWP evaluate how that policy is working out in practice. A two-year time scale is really far too late; we need to be seeing some analysis of what is going on across the UK at this point.

Cllr McGuigan: We have been negotiating with the DWP on some aspects of this for the last two and a half years, and it has been quite labour-intensive. It is not personal, but I do not think DWP come out of it with a lot of credit. They have dragged their heels, and only when pressure mounted on them were they able to move. That is not to say we do not engage fully. We would want to see DWP undertake with us a full review of the kind of support services that we are providing and how DWP resources are being utilised to alleviate the pain out there. Although discretionary housing payments should not be the remedy for the bedroom tax and it is the wrong use of discretionary housing payment, we are hoping to see additional resources coming to meet the need out there next year. We do not know what is going to happen next year; we do not know what resources will be available from DWP next year, and that is a big worry for us. We still have to prepare for the crisis that may arise should DWP cut their support next year, but we can try to get into that kind of depth.

Q1036Chair: What is your view of the outcome of the recent appeal tribunals in Glasgow and Fife that found against the local authorities?

Michael McClements: We track these, perhaps as the Committee does. Generally, we do not issue guidance to local authorities because they need to take account of appeal tribunals and interpret the regulations in their own way. One of the difficulties we observe is that it is quite problematic because first-level appeals do not have wider application. A next- door neighbour can be in a very similar circumstance. Local authorities are then unable to apply the logic of that judgment to the next-door neighbour, unless it is a second-tier appeal. Authorities have to take account of what has been determined. A lot of difficulty about the definition of "bedrooms" is starting to arise. The direction or guidance given to local authorities by DWP was that they should rely on how the landlord defines "bedrooms". When cases have gone to appeal, other judgments have been applied about sizes, what is reasonable and so on, but there is no clarity in the law. Local authorities still have to follow the regulations and guidance as best they can. When you talk to people, it feels as if they are trying to operate against a moving target here. Some of this shows the illogicality of the whole policy.

Q1037Chair: You expressed the problems that the uncertainty is causing. Would you like the local authorities concerned to appeal to the second tier so that we would get a clear outcome-a clear verdict?

Michael McClements: It is a decision up to the individual authorities. One of the difficulties is that the local authorities have no choice perhaps in the initial determination. They are operating in relation to how they interpret the regulations under which they are operating. They may take the view that they have got a decision and they implement it. It is up to local authorities to decide whether they want to go to second-tier review, but some may not disagree with the decision that has been reached. Often, they would not want to go to second-tier review for a decision with which they did not disagree just to get the precedent set for everyone else; so it is a difficult one for authorities.

Q1038Chair: If the two authorities concerned, Glasgow and Fife, do not go to the second tier, does that mean they have to implement the decision of the first tier for all the people affected?

Michael McClements: I am not an expert in this, but my understanding is that the decision is binding on whoever moved the appeal in the first place. It does not necessarily have wider application. Those authorities will check with their own legal services their interpretation of the judgment in light of the regulations, but until there has been clarification they are a bit hamstrung in how they can operate.

Q1039Chair: It sounds as if the only way we can get clarification is for a local authority to go to the second tier. I can understand that for political reasons they may not want to do that, but it does sound as if it is the only way we are going to get clarity.

Cllr McGuigan: That is a matter for the particular local authority, not for COSLA. I would not want to venture into the territory of what I would do if it was North Lanarkshire.

Michael McClements: It is also open to the DWP; they can take it to the second tier if they want.

Q1040Chair: Even though they are not an affected party, they can still take it.

Michael McClements: Yes.

Q1041Graeme Morrice: I was wondering how welfare reform and the bedroom tax, in particular, was impacting on tenants seeking temporary accommodation and also the provision of supported housing in Scotland.

Cllr McGuigan: In Scotland, temporary accommodation is provided mainly by local authorities. That would happen in the private or leased sector in England. We find ourselves in a difficult situation here. We cannot secure exemption from the bedroom tax for local authority premises, yet the private or leased sector is relieved of it.

Q1042Chair: When you refer to the private sector, does that include housing associations?

Cllr McGuigan: No. You would not include a housing association in that, would you, Michael?

Michael McClements: It would depend on whether it was leased or licensed. The difficulty arises for council-owned property.

Q1043Chair: But I am trying to clarify which side of the fence housing associations fall in this particular case. Do they fall on the same side as councils or the private sector?

Michael McClements: In relation to temporary accommodation?

Chair: Or supported housing.

Michael McClements: I am not sure if you are asking me generally whether they are so regarded.

Cllr McGuigan: I know the question you have asked. You are asking that question only in respect of temporary accommodation. RSLs do provide temporary accommodation in some circumstances. There is not a lot of temporary accommodation in Scotland, but my understanding-we can check this out-is that they would fall in the same sector as local authorities. That is my understanding.

Q1044Graeme Morrice: Local authorities have a statutory role in relation to assisting homeless people by providing accommodation. That may be local authority accommodation or housing association accommodation, or they may contract to bring in private rented accommodation, or bed and breakfast accommodation. The private sector has no role, and the housing association sector obviously supports local authorities in that regard. That is my understanding.

Michael McClements: The situation in Scotland is that 57% of temporary accommodation is provided in council-owned properties. By comparison, for England it is 17%, which includes both council and housing associations in England, so there is a very different stock of temporary accommodation in Scotland. In England, in particular, the majority of arrangements are through leases with third parties or licence arrangements. That exists in Scotland, but it is very much a minority. The DWP have granted an exemption from both the bedroom tax and benefits cap where it is leased or licensed temporary accommodation but not where it is council-owned temporary accommodation, which is the majority of stock in Scotland. We do not understand the basis of that exemption. The people who require access to temporary accommodation have very little choice as to what is available to them. It seems perverse. There appears to be some penalty that applies to them if the accommodation happens to be owned by the council, whereas in other circumstances it is not. If it is under a leased arrangement, the bedroom tax would not apply.

Q1045Chair: Would that be a lease from an RSL? Would it apply in that case?

Michael McClements: My understanding is that, if it is not council-owned and the accommodation is provided as part of a leased arrangement, it could be an RSL, but in Scotland almost 60% is council-owned property.

Q1046Chair: But for councils like Glasgow or Argyll and Bute, for example, that divested themselves of their housing stock to an RSL, how would that apply in a case like that?

Michael McClements: It also depends on whether it is provided as part of a lease or licence arrangement, and sometimes that is not the case.

Q1047Chair: Can you explain the difference between "leased" and "licensed"?

Michael McClements: Is there a formal lease? For example, maybe a provider is providing temporary accommodation. The property is owned by the council, but the service is delivered by a voluntary organisation or a support service-Women’s Aid, for example.

Q1048Chair: Is that what you mean by "licensed"?

Michael McClements: I think the definition of "licensed" refers to English housing legislation.

Q1049Graeme Morrice: Can I just clarify what you said there? In terms of the unintentionally homeless who are allocated temporary accommodation by the local authority, which in most cases in Scotland will be council housing, if they are claiming housing benefit and the accommodation is too big for them, they are hit with the bedroom tax. Is that what you are saying?

Cllr McGuigan: Yes.

Q1050Graeme Morrice: Is that not unfair, because if, at the end of the day, a local authority is allocating on a temporary basis to homeless people property that is too big for them, it is not the homeless family’s fault? It seems really unfair to me that they are penalised as a result of that, plus there ain’t going to be much temporary accommodation out there, so it is not always going to match exactly the family circumstances of those homeless people. Sometimes that accommodation is going to be far too big, but it is done only on a temporary basis until they get something more suitable and a permanent allocation at the end of the day.

Cllr McGuigan: The whole idea of temporary accommodation is to enable us to offer temporarily that kind of shelter for a family, until such time as we can house them elsewhere. It goes without saying that we can do that only with the houses that are available to us at a particular moment in time. If we do not have a single-bedroom flat to put a single person into, we have to find suitable accommodation for them. It may well be we would judge that the best accommodation for that particular individual, on the basis of need, would be an available two-bedroom flat. That could happen.

Q1051Graeme Morrice: To clarify it further, if it is not council housing-say it is housing association accommodation, because there will be local agreements among RSLs and local authorities about the percentage of housing association housing to be made available to local authorities and temporary accommodation for homeless people-are we saying that the bedroom tax applies there as well?

Cllr McGuigan: That is my understanding. As far as housing associations are concerned, a considerably fewer number of temporary accommodations would be available through the RSL sector than the local authority.

Graeme Morrice: How does this impact upon supported housing in particular?

Q1052Chair: Before we go on to supported housing, I want to clarify one point. If the council leased a house from the private sector or private landlord for temporary accommodation, are you saying the bedroom tax would not apply in that case?

Cllr McGuigan: Yes.

Q1053Graeme Morrice: How does all this impact on the provision of supported housing in Scotland as well?

Michael McClements: Supported housing is quite complex.

Graeme Morrice: Oh dear.

Cllr McGuigan: Why did you ask that question?

Michael McClements: A set of arrangements has evolved over the years about how supported accommodation has been funded. Policy is now changing, making those arrangements and the funding vulnerable, and making people who are accessing that supported accommodation subject to things like the bedroom tax and the benefits cap.

The DWP spoke first about support-exempt accommodation. My understanding of that as a definition is that it goes back some years. It was not intended for this purpose as it has now been applied. Without getting into the complexities, it is a narrow definition of what constitutes supported accommodation. It does not include, for example, council-owned property, so it is a narrow definition of supported accommodation. Saying that people in supported accommodation are exempt from the bedroom tax and the benefits cap is not true; it applies to only a proportion.

We do not have a clear understanding of the amount of supported accommodation in Scotland and the arrangements that have been supported from the housing benefit system. We have been working with the Scottish Government to undertake a survey across local authorities in Scotland to try to get a clear picture both of what all the existing arrangements are and the quantum of the benefit money that supports that.

We are concerned not just about the bedroom tax and benefit cap, but we are concerned going forward, because we understand that DWP’s intention is to identify the supported accommodation and separate out the support costs from housing costs and localise them. Our concern would be that that needs to be all accounted for, and we are concerned that the definitions the DWP are using at the moment are very narrow and will not include all that is currently supported. They have recognised that support-exempt accommodation is not sufficient, but it does not seem clear at this point that they are prepared to widen the definition sufficiently to include all the support accommodation that currently attracts support from the housing benefits system.

Cllr McGuigan: I understand the point you are making, Graeme. There are issues about the quality of supported accommodation that we consider should be reasonable and decent. We think there is a dangerous path we could travel along here, in that we could arrive at the conclusion that, if you put someone in a home or furnished flat on a temporary basis, you have met all the needs of that individual at a particular moment in time. We would contend that you have not. Most of the people that I have seen going into temporary accommodation require other support and help, and there are costs associated with that. That leads to the big debate about what costs should and should not be met. We have to be careful that we do not drive the level and quality of supported accommodation down to an embarrassingly indecent level.

Q1054Chair: If the supported accommodation is owned by an RSL, is it covered by the bedroom tax, or not?

Michael McClements: It is subject to different interpretations. The question of whether or not the support is delivered as part of a leased arrangement comes into it. It is confusing. The practice across authorities may not be consistent with how they have interpreted the existing rules because they are quite confusing, and overlaying that with the bedroom tax and benefit cap makes it more complicated. Some support accommodation may not be attracting any additional support from the housing benefit system; other support is attracting support. COSLA does not have a full understanding of all those arrangements or the quantum. Our concern is that it could be quite a few million pounds across Scotland and it is important that that is not lost in a change of how housing cost support is delivered.

Cllr McGuigan: We are not answering your question, Chair.

Chair: The answer is that we do not know.

Cllr McGuigan: We will write to you on that. I will take a note on this and we will endeavour to get some answers.

Chair: If you can find out and write to us, that would be very useful; thank you.

Q1055Mike Crockart: I think we have covered the last point to some extent, because you have talked about the meetings you have had on this issue with DWP and the Scottish Government over the last two and a half years. Could you outline how those have gone, whether your concerns have been listened to and whether further exemptions or money have been identified? We have not talked about the rural side of things where extra money was found to try to defray some of the issues there. You have just mentioned supported accommodation where, presumably, the opposite is true. Can you outline the meetings you have had with DWP and the Scottish Government and say what the response has been?

Michael McClements: We had a variety of offers of meetings. DWP certainly want to meet with local authorities a lot concerning the implementation of universal credit. We found it more difficult to have the same discussions about other aspects of welfare reform changes. We do not think, for example, that there was a proper understanding of the housing landscape in Scotland. Things like temporary accommodation, the size of the social sector and so on are quite different. We do not think that the policy direction was formed with sufficient understanding. We have endeavoured to try to fill that gap. Our political representative met Lord Freud and has written to Ministers. We have had some progress in some areas. The increased money for DHPs is due in part to the whole lobbying efforts of COSLA and others. Having said that, we do not see any real shift in the fundamental policy direction.

There has been a willingness to look at aspects of the delivery of universal credit. We are in discussions with DWP about how local support services can be delivered. Our view is that that support is funded adequately and should be there for people. We welcome the alternative direct payment options that have been announced, but we are still very concerned about how they will operate in practice. There is still a potential for a lot of people to get into arrears and debt. This is such a big change that it needs to be phased in very gradually and carefully. While we welcome the fact that there has been some adjustment, we still think this is a massive change. We are talking about 380 local authorities in Great Britain and 3,000 RSLs. I am not clear-I do not think anyone is-how DWP will organise the operation when benefit services are no longer delivering housing benefit to ensure that all the people who should be exceptions, if you like, are recognised and it gets handled efficiently. We as councils and registered social landlords will be carrying that risk.

Q1056Mike Crockart: And on the Scottish Government side?

Cllr McGuigan: We have had discussions with Lord Freud. He has tried to be very open and frank with us. While there has been a generous reception, there have not been any generous outcomes from it. I think we managed to get a shift in the situation in Northern Ireland. They got parity there-seven weeks of direct payments.

Michael McClements: For two months. This is the alternative payment arrangements. We recognise that as a movement.

Cllr McGuigan: On the main spinal cord of welfare reform I don’t think we have had very much willingness to listen. Well, there has been a willingness enough to listen, but there has not been much translation of that listening into meaningful actions to alleviate the worst aspects. As I said at the beginning, I do not think it is malice that has brought this in. I have always said on behalf of COSLA that we recognised that welfare reform needed to be reviewed and looked at in great depth to improve it so that people could get the benefits to which they are entitled. There are lots of people under the old system who were not getting that. I have no difficulty with that aspect, but when that welfare reform moves into a punitive mode, in the way the bedroom tax has, it leaves us feeling very frustrated. We have made the politest and strongest representations that we can-I am not often as polite as I would like to be-but we have not had much change out of that. We will keep trying.

Q1057Mike Crockart: I did ask about meetings with the Scottish Government as well. What is the position on that?

Cllr McGuigan: There had to be a bit of push in order to make the Scottish Government realise that they had a responsibility in this particular matter as well as ourselves; that they could not stand on the sidelines and point their finger at the UK Government; and that they had a responsibility to work with us to find ways and means of relieving the social pain out there. We did that and we got it. It wasn’t just us; there were other key agencies doing that too. But initially there was a reluctance to adopt a political stance rather than a solution approach. They have shifted from that, and, hopefully, it continues and will improve even more.

Q1058Chair: If members of the Committee do not have any further questions, before we conclude, is there anything else that either of the two witnesses wants to say to get off his chest?

Cllr McGuigan: I will run through this very quickly. I have made some points. What do we think we could recommend to the Committee? Fourteen per cent and 25% reductions are much greater than typical rent differentials for different sizes of properties in areas of Scotland. Any reduction being applied should reflect these rent differentials in social housing in an area. That is one wee point I would like to leave with you.

The DWP have said that an extra bedroom is allowed if a disabled person has a livein or overnight carer, but that does not apply if the carer is also your partner or spouse. It is astonishing that that differential exists. If you are disabled and your wife is also your fulltime carer but needs to sleep in a different room, you will still face that benefit cut. That is unbelievable. I am sure all your heads are nodding and you will do something about that one.

Councils are being left to determine which disabled people are eligible for discretionary help, and that is an unenviable position for us to be placed in. The UK Government’s own impact assessment suggested that, of the 660,000 households affected by the bedroom tax, 420,000 would have a disabled member. Equally, the Government need to adopt a clear policy for people with disabilities and care needs. The needs of separated parents who have access to children should also be considered and addressed.

I have said repeatedly-I will say it again-that discretionary housing payments are not a solution, but we need the DWP to make available at least the same level of resources next year to enable us to continue to meet the difficulties we are facing out there, and we need to get an announcement of that plan as soon as possible. You cannot leave this up to a month before it is due to kick in and expect us to be able to provide the support arrangements that are needed.

The last point is the one we have just been talking about. The nature of temporary accommodation in Scotland is quite different from that in England, where most people in temporary accommodation are exempt because the accommodation is leased or licensed. We will try to dig into that deeper. In England, 50% is private leased property; 17% is council or housing association. That is the English scene. In Scotland it is 57%. We are saying that all those in temporary accommodation should be exempt, and we hope that you will consider that to be an important aspect.

Maybe I am flying a kite here, but I want to say a little bit-and then I’ll shut up-about other welfare reform impacts. We are really worried about direct payments when universal credit comes in. While the proposed safeguards, like ability to switch back to landlord payments after the two months of arrears, are welcome-I spoke to Lord Freud about that, and that made a difference-direct payments of all benefits in one lump sum represent a massive and risky social experiment. I do not think I need to go into any detail about what the risks are. We start to get into agenda matters and so on, but that worries us greatly. Councils and RSLs will carry this risk. We do not know how efficiently DWP will operate the proposed alternative payments, and we lack any detail of how they propose to operate, as Michael was saying a minute ago, across 380 councils and 3,000 RSLs. I am nearly finished, Chair.

Chair: Take your time. You have come a long way. We do not want to cut you short.

Cllr McGuigan: You are such a gentleman. I have a train to catch as well. People are being squeezed with a whole range of benefit changes, especially breaking the link with inflation and the operation of the 1%. We hope that paying the council the rent will be the top priority against other pressures on household budgets. We are hoping and praying that they will pay. That is not necessarily the outcome we expect. Remember that demonstration projects have not tested any of this, so we will have to wait and see.

The last wee bit is that, when it all goes wrong, it is the people in the locality who suffer the pain and anxiety, and local authorities have to pick up the pieces. I am a great fan of the idea that we have three governance levels in the United Kingdom: local government, the Scottish Government and the UK Government. I do not think we talk as much to each other as we should to make sure that the outcomes we can secure are better ones for the people we represent. I will now shut up, and thank you, Chair.

Q1059Chair: That was a good observation on which to end. We certainly should be talking a lot. Thank you very much for giving up your day today to come along and talk to us this afternoon. We have found it extremely useful. What you have said will be extremely helpful to us when we put together our recommendations to the Government.

Cllr McGuigan: We will try to get that extra information to you as soon as possible.

Q1060Chair: Is there anything else you want to add?

Cllr McGuigan: Not at all, Chair. I would like to thank you and your colleagues sitting round the table. Some I know very well; others I do not know, but I have enjoyed sitting here and having the opportunity to talk to you.

Chair: Thank you very much.

Prepared 12th November 2013