Housing and Social Security: follow-up paper on Welfare Reform

Ministerial Foreword

We are pleased to jointly introduce the third report on the impact of UK welfare policies on the people of Scotland. This report follows on from our annual report on the impact of welfare reform which we published in June last year, and looks specifically at the impact of UK Government reforms on housing. The previous two reports covered the impacts on disabled people and families with children.

Housing and social security are both high priority areas for the Scottish Government. We are working to increase the number of homes across Scotland so that everyone has a good quality home that they can afford and that meets their needs. We will spend over £3 billion to deliver at least 50,000 affordable homes, of which 35,000 will be for social rent, by March 2021. This builds on the achievement of exceeding our previous target to deliver 30,000 affordable homes by 2016.

At the same time we are taking a very different approach on Social Security from that of the UK government. Our new social security system will be rights based and has at its core, the firm belief that it represents an investment made in ourselves and in each other, with the founding principles of dignity and respect to guide us.

We are also acutely aware of the impact our housing and social security approaches can have across a range of issues affecting the lives of people in Scotland, including health, education, economic growth and child poverty. While the UK Government has scrapped its targets to reduce child poverty, we have responded by making those targets stronger and reintroducing them to the Scottish Parliament, determined as we are to eradicate child poverty once and for all.

As can be seen then, welfare policies have a huge impact on many of our ambitions and priorities as a government, and it is regrettable that UK welfare reforms add to the challenges we face. We expect to spend over £125m in 2018/19 on welfare mitigation and measures to help protect those on low incomes. This is over £20m more than in the previous year. This includes fully mitigating the Bedroom Tax - ensuring more than 70,000 households save around £650 per year on average and are able to stay in their own home. We also took action to ensure that any 18-21 year old facing a cut to their housing support as a result of Universal Credit changes got the support they needed. But mitigation on its own, though it provides vital relief to those worst affected, is no more than a sticking plaster where every penny we spend on mitigation is money we can't then use to invest in vital work to tackle poverty and provide other services.

The previous reports have spoken to the impacts on specific groups. This report aims to complement that by examining impacts in housing. The impacts of welfare reform ripple out, from tenants directly affected, through to support services, landlords and other tenants who ultimately subsidise UK cuts through the rent they pay. On top of that, the good work being undertaken by councils and landlords to deal with the consequences of UK reforms inevitably adds to the wider financial and resource pressure they are operating under and therefore impacts detrimentally on the services they can provide.

This report not only highlights the detrimental impacts from a Scottish Government perspective, but also shows that in key areas even in their own terms many of the UK reforms are a failure. Often an ideological drive to make cuts has taken precedence over the UK Government's own stated policy intentions.

For example, it surely cannot be the UK Government's intention to make private rented accommodation completely unaffordable in some areas, and yet that is the effect. Neither can it be the UK Government's policy intention that social landlords should have to be burdened with significant increases in levels of rental arrears, yet that is the worrying effect of the move to Universal Credit ( UC).

In addition to our mitigation spending, we are also delivering the changes to Universal Credit that we can under the Smith Commission powers, with more frequent payments and direct payments to landlords already in place and being taken up but nothing we can do allows us to change the fundamentals of UC. Changes to UC announced in the recent UK Budget can be viewed as an acknowledgement of the failure of the UK Government to tackle the big problems. Whilst any improvements are welcome often the changes are too little too late with remedial measures lagging behind UC roll out.

The UK Government must end its ideologically-driven assault on those least able to cope. Not only is it causing unnecessary suffering and hardship, but it is placing enormous pressure on all parts of our housing system. Despite these pressures, we will continue to make the case for doing things in a better way, and we will do all we can to maintain our work to deliver a rights based social security system, and to ensuring everyone has a warm, safe and secure home that meets their needs.

Kevin Stewart

Jeane Freeman