1. Housing Benefit Reform – the national context Stephen Sandham Head of Transitions and Support Housing Options and Support Division

2. DWP’s rationale for change “Housing benefit expenditure has ballooned in the past 10 years from £11bn in 1999/2000 to £20bn in 2009/2010” “This is unsustainable in any economic climate, but the need to tackle the record deficit makes reform even more pressing” Making work pay – shortfalls in income and lack of alternative accommodation increase the incentives to seek work?

3. First tranche of DWP changes Private Rented sector from April 2011: –Local Housing Allowance based on 30 th percentile –Removal of £15 excess –Capping of bedroom rates –55,000 lose on average £10 per week –Single people under 35 only entitled to shared room rate from January 2012 (7,500 lose £17-54 per week) Inflation uplift by CPI not RPI from April 2013 Increased contribution to rent for those with income in Private and Social Rented sectors from April 2011

4. Second tranche of DWP changes Social Rented sector from April 2013: –Penalties for working age tenants under- occupying the property –95,000 households could lose £9-16 per week Direct payments to tenants – risk of arrears mounting, reduced security of income for landlords, possible impact on perceived risk of lending to RSLs

5. Assessing impact difficult 9 months transitional protection for existing clients, so full impact not yet seen LAs able to offer short term relief for some through Discretionary Payments transition fund UK Govt expects rents to reduce, but individual landlord responses will vary significantly depending on level of demand / supply of private lets Some small further concessions by DWP possible on exemptions for adapted property, and other vulnerable groups

6. Average weekly loss of income by property size across Scotland

7. Total loss of income by property size across Scotland

8. Anticipated impacts £100m out of Scottish economy annually More people in rent arrears Increase in homeless applications – meeting / sustaining 2012 target more challenging More people moving away from support networks, and children changing schools Further difficulties for disabled people in finding suitable accommodation Increased need for money and housing advice services Private Rented Sector less affordable for HB clients, affecting action to promote vibrant mixed communities

9. Scottish Government response SG Housing Benefit Advisory Group set up Full impact assessment sent to DWP in December, with further research papers published on SG website Joint letters from SG Ministers / COSLA to DWP Use other opportunities e.g. Social Security Advisory Committee Work with SG HB Advisory Group to consider further influencing and mitigating action But no sign of major shift in policy or pace by UK Govt, and significant pressures on Scottish Government and LA budgets (and services)……

10. Further information Scottish Government analysis on impact of HB changes in Scotland, developed with help from HB Advisory Group: http://www.scotland.gov.uk/Topics/Built- Environment/Housing/supply- demand/chma/Benefitchangeshttp://www.scotland.gov.uk/Topics/Built- Environment/Housing/supply- demand/chma/Benefitchanges Ellen Searle 0131 244 0380 Ged Millar 0131 244 0700