‘Bedroom tax’ could cost the government more than it saves, MPs claim

The controversial ‘bedroom tax’ could lead to a surge in evictions and end up costing the government more than it saves, a group of MPs has claimed.

The imminent changes to housing benefit, dubbed the ‘bedroom tax’ by Labour, will see families judged to have too many rooms in their homes facing cuts of 14 per cent (for a single excess room) or 25 per cent.(for two or more rooms).

The government initially claimed that foster carers, would be exempt from the cuts , who as they typically need additional bedrooms, but it later emerged that the exemption only applied to foster carers looking after a single child.

Divorce Services Find your local office

Now the Public Accounts Committee, a cross-party group of MPs, has claimed that “awareness of the reforms and their impact was worryingly low amongst those who will be directly affected.”

It claims: “The department is relying on a ‘wait”and see’ approach to identify the impact of housing benefit reforms, for example on homelessness.”

Welsh MP Nick Smith  added:

“The [Department for Work and Pensions] say the changes will deliver £6.2 billion of savings by 2014-15 but can’t say what this will mean for the family receiving housing benefit or the public authorities who may have to deal with the consequences. As a result of the Government’s failure on housing, rents are rising and becoming more unaffordable while people’s incomes are squeezed.

He added:

“The effects will be widespread. 40,000 households are facing the bedroom tax – nearly half of all working age social tenants who get help paying their rent because of their low income. Wales will be harder hit than any other part of the UK.”

He added: “Cuts in housing benefit could have knock-on effects for housing services if evictions and homelessness rise or rent arrears increase.”