Jonathan Werran 20 June 2013

'Bedroom tax' councils could lose HB subsidies, Lord Freud warns

Housing Benefit (HB) subsidies could be axed for councils which have sought to get around the so-called ‘bedroom tax’ by re-designating their properties without cutting rents, welfare ministers have warned.

In a letter sent to all council chief executives today, welfare minister Lord Freud states where local authorities have reduced the number of rooms without reasonable grounds and without reducing rents, the Department for Work and Pensions (DWP) could either restrict or not make HB payments.

Lord Freud states such blanket redesignations are inappropriate and fall outside the spirit of the policy to remove the Spare Room Subsidy - which is designed to trim £500m from the annual welfare bill through greater use of social housing stock.

‘I would like to stress that if it is shown properties are being re-designated inappropriately this will be viewed seriously,’ Lord Freud writes.

‘If the department has cause to believe this is the case, we will commission an independent audit to ascertain whether correct and appropriate procedures have been followed.’

A fortnight ago, Manchester City Council hosted a conference at which 36 local authorities considered how the welfare change was affecting residents.  The conference called for the government to scrap the reform which was introduced in April.

Last month Leeds City Council informed 837 households of its plans to reclassify their homes, many of which are five- bedroom properties, since re-designated as four-bedroom properties.

A DWP spokesman told The MJ: ‘Where re-designation of property does occur it’s expected that the rent charged should change accordingly, and from that, the amount of subsidy paid from the DWP to the council must also be amended. This is fair.

'However it has come to light that some councils are re-designating properties and claiming the same amount of Housing Benefit subsidy,’ the spokesman said.

Click here for Lord Freud's letter to local authority chief executives
 

SIGN UP
For your free daily news bulletin
Highways jobs

Part Time Deputyship Finance Assistant

Essex County Council
£25959.00 - £27613.00 per annum + Pro Rata
Part Time Deputyship Finance AssistantFixed Term, Part Time£25,959 to £27,613 Per Annum, Full Time EquivalentLocation
Recuriter: Essex County Council

Financial Assessment Officer

London Borough of Richmond upon Thames and London Borough of Wandsworth
£31,515 - £47,067
Financial Assessment Officer
Recuriter: London Borough of Richmond upon Thames and London Borough of Wandsworth

Family Help Lead

Gloucestershire County Council
£33,143 - £40,777 per annum
We have an exciting opportunity for you to join Gloucestershire Children's Services Gloucestershire
Recuriter: Gloucestershire County Council

Community Social Worker

Gloucestershire County Council
£40,444 - £48,738 per annum
We are currently recruiting for a Community Social Worker to join our team based in the Forest of Dean on a permanent basis. Gloucestershire
Recuriter: Gloucestershire County Council

Debt Recovery Officer

London Borough of Richmond upon Thames and London Borough of Wandsworth
£33,927- £47,067
Debt Recovery Officer<... Wandsworth, London
Recuriter: London Borough of Richmond upon Thames and London Borough of Wandsworth
Linkedin Banner