Potential bedroom tax loop to be explored by Highland Council

A potential loophole around the "bedroom tax" is to be explored by Highland Council - after it emerged more than 400 people have fallen behind with their rent since it became law only two months ago.

The UK Government’s controversial welfare shake-up, including the heavily criticised spare room subsidy, have contributed to a sharp increase in the number of council tenants who have slipped into arrears.

It comes as a Citizens Advice Bureau manager has warned it is damaging peoples’ health and leaving them in tears.

Almost 2,900 residents in the Highlands have been hit by a slash in their benefit income, which comes into effect if they have a perceived surplus of rooms.

The local authority was owed rent totalling £173,491 from 724 tenants before the bedroom tax became law on 1st April.

But by the end of May the debt had shot up to £197,491 and 1,144 tenants are now in the red and there are fears among councillors that the arrears could spiral in the months ahead.

SNP councillor Richard Laird highlighted moves by a Lanarkshire council which has apparently designated spare rooms as studies so tenants are spared an income cut and called for officials to investigate whether it could be replicated in the region.

Councillors were told by housing director Steve Barron today that any such move was at the discretion of each local authority but it had to be defendable, if it came under a legal challenge.

Councillor Dave Fallows, the finance, housing and resources committee chairman, said it was a potential avenue if the "authority could get away with it" but wanted more information.

"We need a bit more confidence that we wouldn’t get hauled over the coals," he said.

David Goldie, the authority’s head of housing, said he was in regular contact with his counterparts in Scotland and was not aware of a loophole in Lanarkshire but would find out more.

Mr Goldie said some Highland tenants had successfully requested their homes were recategorised in a bid to stave off the bedroom tax.

"We have got some people coming back saying they don’t really agree with the way we have categorised their buildings," he said. "For example, there are cases where one room might be a box room with no windows and space for a bed. It is unlikely to apply in the majority of other cases."

Senior Lib Dem councillor Alasdair Christie said welfare reform was making people ill and warned a spiralling arrears debt could harm future council house building plans.

"Never have I come across something which has caused so much fear, anxiety and sickness in peoples’ health," said the manager of the Highland’s busiest Citizens Advice Bureau in Inverness, who warned some English councils had warned of increases of up to 30 per cent in rent arrears.

"I see on a daily basis people literally in tears of despair not knowing what to do. The by-product of this is if it’s going to impact on house building."

Dawson Lamont, the council’s head of exchequer and revenues, said it was "quite clear" the spare room subsidy had increased the number of tenants in arrears and debt.

He said a £216,000 fund provided by the Department of Work and Pensions for short-term financial support with housing costs had made 370 awards to people with almost £32,000 paid out in April alone, but he warned a pot of £400,000 was probably needed to cope with demand.

Councillors want to discuss welfare reform impact with Highland Lib Dem MPs John Thurso, Danny Alexander and Charles Kennedy, after the summer recess.

*BOX

There are 2,857 people who were hit by the bedroom tax in the Highlands, of whom 1,847 are council tenants and the rest have housing association landlords.

More than 500 people have suffered a 25 per cent reduction, with the rest subjected by a 14 per cent reduction.

Meanwhile, more than £10,000 was paid out by the council during April in crisis grants to those worst affected.

Fifty nine people received payments totalling £2,232 while 16 Community Care Grants - payable to people in receipt or likely to be, of income related benefits when financial help to live independently in the community is required - were awarded, at a cost of £8,092.

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