“Upside-down” under-occupancy penalty could cost taxpayers

Following today's report by the University of York suggesting that savings from the Under-Occupancy Penalty will not be as high as initially estimated by the DWP, Citizens Advice Chief Executive, Gillian Guy, said:

“Recent changes to under-occupancy rules are an upside-down approach to policy-making. Ministers’ stated goals in introducing these changes were to make better use of our housing stock and save taxpayers’ money.  The early signs are that ministers are falling short on both of their main aims.  

“Hundreds of thousands of people are being backed into a corner with the under-occupancy charge due to the chronic state of our social housing stock and the enormous pressure on family budgets.  Only forty out of every one thousand households in the social-rented sector will have the opportunity to downsize and the others will have to find extra money out of already-squeezed budgets.  In some cases this policy will backfire as those people that can move into private housing will often cost taxpayers more due to the higher cost of Housing Benefit.

“To solve this problem without putting unmanageable additional strain on household budgets, we need to radically improve our supply of social housing.  Addressing one symptom of the UK’s inadequate housing stock without tackling wider problems risks asking a small number of families to shoulder the burden for years of under-investment in house building.”

Notes to editors:

1. The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
2. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
3. To find your local bureau in England and Wales, visit citizensadvice.org.uk. You can also get advice online at adviceguide.org.uk
4. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers
5. Citizens Advice Bureaux in England and Wales advised 2.3 million clients on 5.4 million problems from October 2013 to September 2014. For full 2013/2014  service statistics see our quarterly publication Advice trends
6. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 3,000 service outlets across England and Wales.