Tag Archives: Rotherham council

Three quarters affected by bedroom tax in Rotherham now in arrears

Rotherham Town Hall
Rotherham Town Hall

 

Three quarters of households affected by the ‘bedroom tax’ in Rotherham are now in rent arrears, with those owing most now at risk of losing their homes.

Just eight months on from the introduction of the policy, Rotherham borough council, which still retains its council housing stock, is owed £305,000 in unpaid rent.

3,335 households in Rotherham are affected by the under-occupancy charge, or ‘bedroom tax’, which sees a reduction in the amount of housing benefit given to those who are deemed to have spare bedrooms.

14% is docked for one spare room, and 25% for two or more.

1300 Rotherham tenants are in a relatively small amount of arrears, of up to £50.

But around 400 households alone make up £160,000 of the overall debt, raising fears that they could face possible eviction.

Dave Richmond, the council’s director of housing and neighbourhood services, says that could occur.

“I think so, eventually. Generally [people’s debt] is going up by relatively small amounts, somewhere between £11-20 a week. But obviously if that went on for a year or two and they don’t pay anything, then that’s £1000 a year and you could quite easily get the point where potentially we would [evict].

“If someone’s making an effort and trying to pay something off it and they’re genuinely struggling, and if they’ve done things like register to downsize, then we’d work with that.

“But if someone just digs their heels in the sand and basically says ‘I’m not paying this debt’…then eventually we’ve got to take action.”

Richmond is also sceptical of other local authorities who claim they have a ‘no-eviction’ policy concerning those affected.

“In reality they don’t. If somebody just refuses to pay then they’re not going to be prepared to tolerate that indefinitely.

“If someone is running up £1000 a year debt are you going to leave them for ten years and have a £10,000 debt? I just can’t see that.”

But the council is considering writing off debt for people who are genuinely seeking to move home but are finding it difficult.

It has also reviewed how it allocates houses in the future. Its new ‘right to refuse’ allocations policy is based on stringent financial tests to prevent people moving into a new home they cannot afford, and it has introduced fixed-term tenancies for large families, guaranteeing a house only until the youngest child turns 21.

Despite its obvious financial implications for the council, Richmond is sympathetic to those struggling to keep up with the rent.

He said: “To some degree I can understand the logic of the policy.

“We have an issue of overcrowding and people requiring bigger properties.

“[But] it feels to have been happening in such a way that it’s been relatively insensitive to individuals. Actually getting people to downsize in other ways would have been more sensible.”

Steve Ruffle, Development Manager for Rotherham Federation of Tenants and Residents said: “We have a clear policy of opposition to the bedroom tax. We very clearly feel it’s unfair.

“We do have concerns about people falling into arrears and welcome support the council and other partners can give to support people in this situation.”

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Rotherham council blocks websites of payday lenders

Rotherham borough council has blocked access to the websites of payday lenders on all computers owned by the authority.

Library users, as well as the council’s own staff, will instead be re-directed to a holding page which will offer debt advice and links to the sites of local credit unions.

Councillor Mahroof Hussain, cabinet member for communities and cohesion said: “I’ve been campaigning against payday loan companies for several years and I’m acutely aware of the impact they are having. A short-term loan can become a long-term debt.

“We shouldn’t be allowing our computers to be used to generate profits for these companies.”

Russell Hamblin-Boone, chief executive of the Consumer Finance Association which represents some of the largest payday lenders said: “Rotherham council is clearly entitled to take any action it deems necessary and we would support any initiatives that drive out irresponsible lenders.

“However, we would be concerned that, without evidence of its impact, this action prevented people in Rotherham having access to responsible credit providers.”

The council has also provided the town’s credit unions with £25,000 to help with their additional caseload over Christmas and into the new year.

LASER credit union lend to its customers every 16 weeks, including just before Christmas. This encourages people to save regularly throughout the year so that they can take out a loan, capped at a maximum of 2% interest per month.

Liz Thompson, Business Manager at LASER said: “People don’t get any more benefits or wages just because it’s Christmas. But obviously there is an extra drain on their finances to afford the things that their children might want.

“It’s also about making sure that when it comes to January they can pay their rent or council tax and all those other bills that are still due even though they’re trying to afford Christmas at the same time.”

Cllr Hussain will also chair the welfare reform steering group to look at further action to take to limit the reach of payday lenders, including where they can advertise. This will report to cabinet by April next year.

But he wants to go even further.

“I want to work with the fire service, police, hospitals, voluntary sector and even the football club to create socially responsible action in Rotherham.

“When you turn on the telly, payday loan company adverts are coming on all the time. You don’t get adverts for credit unions or see them on the front of a football shirt.”

“It’s also about preparing for the future. We can’t have a society that relies on short-term money to fix long-term debt.

“Payday loan companies are using all possible mediums and we need to stop them.”