Welfare reform - housing and social security: second follow-up paper

Summary of key findings

Our modelling indicates that the benefit freeze could reduce Scottish welfare spending by £300 million per year^[1], affecting the majority of the 460,000 Scottish households currently claiming Housing Benefit or the Housing Element of UC^[2].

A total of 3,320 Scottish households were benefit capped as of May 2019. Among Housing Benefit-capped families, the average amount capped each week was £64, equivalent to around £3,320 per year^[3].

Our updated analysis on Local Housing Allowance (see chapter 5) suggests that only 11 out of 90 LHA rates in Scotland are set at the level allowing families to rent a home in the 30th percentile of the rental market.

Since the previous report whilst the situation has improved for 11 of the 90 Scottish LHA rates, 36 of the rates have seen a reduction in the proportion of the market that is available, with 4 areas having access to less than 5% of the market.

The share of the rental market that under 35s can access within the LHA rate has decreased in all areas since the first analysis has been published by the Scottish Government in 2018.

As at March 2019, rent arrears on all council properties in Scotland was £74m, up £9m (14.0%) on last year, representing 6.2% of Standard Rental Income from these properties. These arrears have been rising steadily year on year since March 2013^[4].

The housing revenue account shows at 31 March 2017 that in the five council areas where UC full service had rolled out in 2016/17 rent arrears had increased by an average of 14.1% compared with an average of 4.1% across the remaining councils^[5].