Bedroom Tax – the story behind the headlines

Reposted from The Guardian Society


Houses under construction

A national shortage of one-bedroom homes has meant that for many there are no smaller homes available. Photograph: Bloomberg/Getty Images

The government is calling on housing associations such as mine to create significant numbers of new homes over the next four years. However, they are also asking providers to build smaller homes – and to make many of them one-bedroom accommodation.

This is, of course, a direct response to welfare reform and a tacit admission that the inequities of the bedroom tax won’t be solved by existing accommodation. The bedroom tax has penalised people for under-occupying their homes, but a national shortage of one-bedroom homes has meant that for many there are no smaller homes available, and no choice but to suffer the resulting deduction to their housing benefit.

There is no doubt that anything to boost housebuilding is to be welcomed. The twin advantages are providing much-needed accommodation and the economic boost that construction jobs can offer. Construction is the first industry to suffer in any recession yet can provide a way out. But the idea that housing associations should be building one-bedroom accommodation on any sort of scale is barking mad.

To be building homes now that will be with us for the next 100 years as an answer to the iniquitous, incompetent and inevitably short-lived bedroom tax lacks foresight. Yes, there may be a case for smaller accommodation to be provided, especially with growing numbers of smaller and older households, but this should be done carefully in a considered way by providers in response to genuine housing need – not in a headlong rush in response to the bedroom tax and in pursuit of a small bit of subsidy.

I was recently at a roundtable discussion with housing minister Kris Hopkins. I was impressed and I don’t doubt his enthusiasm for the sector and what we can achieve. He knows the sector can deliver and he wants to see us do that. And by making government land available for building and smoothing out the planning process he can really help. But there is one big thing he could do that would provide a real boost to housebuilding at no cost to the government.


At present, accountancy rules mean that many social landlords significantly understate their assets, consequently reducing the amount they can borrow in order to build new homes. Just modernising these rules could unlock a lot more funding that could be used to build more homes.

For my housing association this could help us access a further £200m of private finance – which would help us to build 17,000 new homes. If councils and government departments think more creatively about their land and recognise social value as well as simple monetary returns, that money could go even further.

Building smaller homes will do little to help the people affected by the bedroom tax – nor the 72,000 estimated by the National Housing Federation to be in rent arrears as a consequence. We’ve seen an increase in rent arrears of 66%; the bedroom tax coupled with changes to council tax benefit and rising prices is making it really tough on households.

After 40 years in the business I know this housing stuff is complicated and combining it with reform of the complexities of the welfare system makes it doubly difficult. But building a few tiny homes won’t solve it any time soon.

Ian Munro is chief executive at New Charter Housing Trust

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1 Response to Bedroom Tax – the story behind the headlines

  1. A6er says:

    Reblogged this on Britain Isn't Eating and commented:
    With the Government asking house builders like the New Charter Housing Trust to build smaller homes – “and to make many of them one-bedroom accommodation”. this proves they are only to aware of the shortage of suitable accommodation so that people hit by this bedroom tax can move into.Yet, they still penalise the poorest, sick and disabled into paying up to £25 a week out of their measly benefits.


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