Bedroom Tax Mitigation Funding "Insufficient"

Funding to mitigate against the bedroom tax might not be enought to stop Scots struggling to make ends meet.

The Child Poverty Action Group (CPAG)  made the warning at Holyrood's Welfare reform committee.

MSPs also heard that if the Conservative government makes further cuts, either the Scottish Government or councils will have to fill the financial gap.

Finance Secretary John Swinney has committed to topping up funds for Discretionary Housing Payments (DHPs) by £35million, but the Department for Work and Pensions (DWP) has reduced the amount it will make available for DHPs from £165 million in 2014/15 to £125 million in 2015/16. 

Scotland’s share has been reduced by 7%, from £15.3 million in 2014/15 to £14.2 million in 2015/16i

Submitting evidence ahead of this morning's talks, CPAG said plans to devolve power to Holyrood would be 'restricted'  - because it coould only provide financial assistant to people entitled to housing benefit or any other benefit to pay rent.

It said: "Unless the drafting of this clause (9) is changed, the Scottish Government will not be able to fully mitigate the impact of the ‘bedroom tax’ using DHPs until the rollout of universal credit is complete. However, this could take up to four years. Roll out of universal credit is ongoing in Scotland and it is estimated that all claimants will not have been transferred until 2019.

"How long it will take to devolve further powers to the Scottish Parliament? Under the transfer of power proposed by the Smith Commission, Scottish Ministers will have power not only to adjust DHP, but also to vary the housing costs covered by Universal Credit and potentially abolish the bedroom tax. 

"Insufficient"

The submission adds that the campaign group is "concerned" that funds allocated by the UK Government and the Scottish Government for DHPs "may prove insufficient" in the coming year, resulting in vulnerable tenants struggling to cover their housing costs.

CPAG says it has affected Scottish councils in different ways. Many, including Fife, have seen an increase in funding, but some, like Glasgow, have witnessed a fall.

"As well as a reduction in the funds available, there is also a serious concern that demand for DHP will rise as a result of ongoing welfare changes." it added.