‘Show intent’ to end homelessness by scrapping benefits cap, charities urge

Scottish charities have called on the UK Government to “show intent” to end homelessness by scrapping the benefits cap and so-called bedroom tax.

A coalition of 38 Scottish charities convened by Homelessness Network Scotland (HNS) has written to the Chancellor urging him to ditch the “damaging” measures at Wednesday’s Budget, and also to end the freeze on Local Housing Allowance (LHA).

It said the policies leave low-income households struggling to meet their housing costs and raise the risk of homelessness, while tens of millions of pounds of public money in Scotland is diverted into reducing their impact.

The benefit cap restricts the total welfare support some households can receive, while the bedroom tax reduces housing support for social housing tenants deemed to have spare bedrooms.

Meanwhile the freezing of LHA support at 2024 levels means financial support for private renters has failed to keep pace with rising rents.

Maggie Brunjes, chief executive of HNS, said: “Housing policy is devolved to the Scottish Parliament but the reality is that the benefit cap, the bedroom tax and the local housing allowance freeze are UK-wide policies which increase the risk of homelessness and which only ministers in Westminster have the power to end.

“Andy Burnham has spoken strongly about his determination to end homelessness across all of the UK, while the Chancellor has previously described policies like the bedroom tax as ‘callous, reckless and heartless’.

“They now both have the chance next week to show that there is real intent behind the rhetoric and scrap these damaging measures.”

Earlier this year the Scottish Government announced £115m in discretionary housing payments, including funding to mitigate the UK restrictions.

The coalition said it makes “little financial sense” to spend public money simply on mitigating the effect of the policies, and that this would be better spent on preventing homelessness in the first place.

It has pointed to the success of a £1m prevention fund in Scotland, which prevented homelessness for 662 households over one year and is estimated to have saved almost £10m in costs.

It said scrapping the policies would reduce the need for mitigation, freeing up funding which it would press the Scottish Government to put towards wider prevention work.

The call comes after annual figures released last month showed homelessness and rough sleeping continuing to rise across Scotland, with record numbers of children living in temporary accommodation.

Ms Brunjes said: “While it is welcome to see the Scottish Government mitigating the impact of these policies, it makes little financial sense for a government in one part of the UK to spend millions of pounds of taxpayers’ money reducing the impact of policies imposed by a government in another part, while ministers in both parliaments stress their ambition to end homelessness.

“Across Scotland, families are struggling to cover their rent, record numbers of children are living in temporary accommodation and rough sleeping is rising.

“This is funding that could instead help us scale up the proven approaches that we know can prevent people from losing their homes in the first place.

“The Chancellor has an opportunity to demonstrate he will match rhetoric with action by using his first Budget to scrap these policies and help families across Scotland keep a roof over their heads.”

Last week Scottish Social Justice Secretary Shirley-Anne Somerville and Welsh Deputy First Minister Sioned Williams sent a joint letter to the UK Government calling for action to end poverty in Wednesday’s Budget.

In the letter the two ministers said: “The benefit cap, bedroom tax and young parent penalty are all driving hardship among households across the country and should be removed in the forthcoming Budget.

“The combined impact of these measures drives thousands of families into the deepest forms of hardship, pushing them further from support and toward emergency provision including foodbanks.”

The letter also called for LHA rates to cover the bottom 30% of rents “as an absolute minimum” – a move they it would lift an estimated 75,000 children out of poverty by the end of the UK Parliament.

The UK Government spokesperson said: “We’re determined to turn the tide on poverty, and our recent statistics show that effort is making a difference – household incomes have risen 5% in real terms, food bank usage has fallen, and food insecurity is down.

“Local Housing Allowance rates were increased to the 30th percentile of local market rents in April 2024, at a cost of approximately £7bn over five years across Great Britain.”