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DWP must reassess impact of ‘bedroom tax’, say MPs

By Richard Johnstone | 3 April 2013

MPs today urged the Department for Work and Pensions to re-examine the impact of the ‘bedroom tax’, warning that the Housing Benefit reductions could hit divorced parents and disabled people.

Clive Betts
Committee chair Clive Betts said the government was implementing 'some of the most far reaching welfare reforms this country has seen in the past 60 years'.

The changes, which came into effect on April 1, dock benefit payments for each room deemed ‘spare’.

In a report published today, the communities and local government select committee welcomed the exemptions announced last month for members of the armed forces, foster parents and some families with disabled children. But the MPs said the coalition should look again at the policy – formally called the Social Sector Size Criteria – to assess its impact on divorced parents and those with disabilities, and be prepared to make further changes.

Several witnesses told the committee the reductions would place additional strain on households, and could lead to them being less able to pay their rent.

The committee also said the DWP must provide ‘swift assurance’ that moves to implement Universal Credit, the single benefit payment, would not leave the system more vulnerable to fraud. Witnesses told the committee that the information technology systems providing Universal Credit were not yet ready.

Examining the government’s range of welfare reforms, which also include localisation of Council Tax Benefit and a cap on the value of total benefits paid out to a single household, MPs said ‘the significance, timetable and volume’ of the changes should not be underestimated.

Committee chair Clive Betts said the government was implementing ‘some of the most far reaching welfare reforms this country has seen in the past 60 years’.

He added: ‘The reforms that began on April 1 are part of a wider set of changes including Social Sector Size Criteria, the benefit cap and local council tax support schemes, all of which will add to pressures on family budgets and local authority and housing association collection rates.’

Ministers must undertake a ‘comprehensive’ assessment of the overall impact of the reforms on local authorities, he said, and should provide more detail on how the council tax support schemes, launched this month, should operate.

‘The government’s commitment to assess the overall impact of the reforms on local authorities is welcome. However, this assessment must be comprehensive and it must come soon,’ he added.

Evidence presented to the committee that computer systems intended to detect fraud in Universal Credit were still at an early stage of development was ‘extremely concerning’, Betts added.

The first trial of the new benefits system, which will merge six existing payments into one, is due to begin later this month. ‘The government must act to provide assurance that the benefit system will not be left vulnerable to fraud either during or after the transition, and it must do so urgently,’ he said.

Responding to the report, a DWP spokesman said ministers would monitor the reforms closely as they are implemented.

He added: ‘Universal Credit will cut benefit fraud by £200m a year and we are confident that our IT systems will be strong enough to protect us from the threat of fraud.’

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