Good morning. I am grateful for the opportunity to come along, with my colleague Kevin Stewart, to present the Scottish Government’s position on how the social security system in Scotland supports housing costs and to advise the committee of the impact on housing of the United Kingdom Government’s welfare cuts.
As the committee has heard not only in its inquiry but for years, the UK Government’s welfare changes have had a damaging and harmful impact on people not just in Scotland but across the UK. There is no doubt that the changes are impacting on the Scottish Government’s aim that all people in Scotland should live in high-quality, sustainable homes that they can afford and which meet their needs.
There is concern that the reported increase in rent arrears could have a devastating effect on planned housing programmes and continuing investment in housing stock across Scotland. We have seen clear evidence that universal credit is causing avoidable and unnecessary harm to the people of Scotland. The Convention of Scottish Local Authorities has provided evidence that rent arrears for those who receive universal credit in full-service areas are 2.5 times higher than the average arrears for those who are on housing benefit.
Trussell Trust analysis shows that food banks in areas that have had universal credit full service in place for a year or more experienced an average increase in demand of 52 per cent in the 12 months after the full roll-out, in comparison with the previous 12 months. In other areas, the average increase has been 13 per cent. Local authorities are being left to pick up the tab of a broken system by investing their own money to support people who are on universal credit—for example, Glasgow City Council has invested £2 million in creating UC support hubs.
The homelessness and rough sleeping action group found that
“Decisions about social security have a direct impact on homelessness”,
and it made a number of recommendations for the Department for Work and Pensions about the benefit cap and freezes, sanctions on people who are homeless or at risk of homelessness, waiting times for universal credit and the support that is available in jobcentres.
Overall, the UK Government’s welfare cuts are expected to have reduced welfare spending in Scotland since 2010 by about £3.7 billion by 2020-21. Included in that are housing benefit rules changes, the bedroom tax and the freeze on local housing allowance rates. Local housing allowance rates can meet rents that are in the bottom 30 per cent of the market in only 10 of the broad rental market areas in Scotland. The UK Government has acknowledged that the freeze is unsustainable, but we do not know what plans, if any, it has to rectify that.
For those reasons, the Scottish Government will invest more than £125 million in 2019-20 in mitigating the worst impacts of welfare cuts and supporting those who are on low incomes. That includes more than £60 million for discretionary housing payments to mitigate the impacts of the bedroom tax, the LHA rate freeze and the benefit cap.
Unfortunately, we are limited in what we can do with universal credit, as it is a reserved benefit, but we are using our limited powers to make the delivery of universal credit more flexible and better suited to the needs of those who claim it in Scotland. Since October 2017, the Scottish Government’s universal credit Scottish choices have given people the choice to receive their award twice monthly and to have the housing costs in their award paid directly to their landlord, although we depend on the DWP to deliver that and to ensure that clients get the information that they need.
Our vision is for everyone to have a warm, affordable home. We want a housing system that works for everyone, and we have taken a raft of actions to increase the supply of affordable housing across Scotland, to end homelessness, to support people in crisis and to mitigate the UK Government’s cuts. However, we cannot fill the gap of the £3.7 billion of cuts that the UK Government is imposing on Scotland. In his interim report last November, the United Nations special rapporteur on extreme poverty and human rights said:
“Devolved administrations have tried to mitigate the worst impacts of austerity, despite experiencing significant reductions in block grant funding and constitutional limits on their ability to raise revenue.”
However, mitigation comes at a price and it is not sustainable.