Minister warns councils on 'Bedroom Tax' reclassification

Welfare minister Lord Freud threatened to withdraw subsidies from councils judged to have improperly redesignated 'spare’ bedrooms in an effort to spare their tenants from rent rises following recent welfare reforms.

Some local authorities have sought to mitigate the impact of the change by redesignating rooms in their properties so that they are no longer ’bedrooms’ but deemed to be used for some other purpose.

Lord Freud has though moved to stop this practice, saying in a letter to councils: “Blanket redesignations without a clear and justifiable reason, and without reductions in rent, are inappropriate and do not fall within the spirit of the policy.”

Councils that re-designated properties without reasonable grounds and without reducing rents could find housing benefit subsidy reduced or ended.

"I would like to stress that if it is shown properties are being re-designated inappropriately this will be viewed very seriously,” Lord Freud said. “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,“ , he wrote.

Lord Freud defended the policy, noting that between 2000 and 2010 spending on the benefit doubled in cash terms, reaching £21bn and would have exceeded £25bn by 2014-15 had nothing been done. Ending payments for rooms judged ’spare’ would save £500m a year, and make better use of the social housing stock, the minister added.

Meanwhile, the National Housing Federation (NHF) has claimed that the introduction of the ‘bedroom tax’ in April has had even worse effects than feared,

Claimants of working age in social housing, considered to have spare bedrooms, have lost an average £14 per week since the change, which they must either meet themselves or avoid by moving to a smaller property, according to the NHF.

The reform has proved intensely controversial even over its name, with critics labelling it the ‘bedroom tax’, while ministers refer to the ‘spare room subsidy’.
NHF chief executive David Orr said: “The impact is at least as bad as we had anticipated, in many respects even worse.

“What we've seen are really bad effects on individuals, people whose lives have been turned upside down, who are very frightened about the future.”