Reforms have caused a social housing imbalance

Deputy chief executive Paul McKevitt
Deputy chief executive Paul McKevitt

THE impact on welfare reforms such as the bedroom tax on Wigan’s stock of social housing has been laid bare in a council report.

The borough’s ruling cabinet will this week consider the document detailing the changing housing situation in the town.

It states that more than 50 per cent of those on the Wigan and Leigh Homes (WALH) waiting list require a one-bedroom property with 13 per cent requesting a property with three or more bedrooms.

But only 25 per cent of the borough’s existing stock is one-bedroom, the report adds, with 45 per cent three or more bedrooms.

And in response, the council plans to build 250 new properties over the next five years in a “modest new build programme” to address the imbalance.

The bedroom tax, or under occupation charge, means benefit claimants have their payouts reduced if they are deemed to have extra bedrooms for their need. Residents in Wigan have been affected more so than in other areas because demand for one bedroom properties far outstrips demand.

It also states that the level of empty WALH properties has shown “a steady increase since the introduction of welfare reforms and has now stabilised at a higher level.”

In April 2011 the rate was 0.9 per cent but has not risen to 1.5 in 2015.

Although the collection of rents has “remained steady despite the more difficult context.”

The report, submitted by deputy council chief executive Paul McKevitt reveals, states: “Demand for council housing tends to move in cycles dependant on a number of factors but mainly the economy.

“In the last 10 years there has been relatively healthy demand for council housing following a period of declining demand. In the last two years, however, there has been a fall in demand due to welfare benefit reform and an increased competition from the private rented sector.

“This has resulted in an increase in terminations, reduction in waiting list and increased void costs.

“There are signs this is steadying but the council house product needs to recognise this changing position and be ready for the impact of further government change.”

The WALH management fees have reduced from £15.7m in 2010/11 to £13.3m in 2014/15, the report adds.

Mr McKevitt, above, adds that the Government has recommended a one per cent decrease in social housing rents and local authorities have the option to reduce it further.

However, the report states: “This is not recommended as it will further exasperate the pressure on the housing revenue account and limit the council’s ability to fund the proposed investments in the housing stock.

“Cabinet (members) are therefore asked to recommend to council that rent be reduced in line with the Government’s announcements.”