Ending the bedroom tax is one step towards tackling regional inequality—because where you live, and what you can afford, shouldn’t hamper your future
India Gerritsen is a research at IPPR North
Twelve years ago today, the bedroom tax came into force. Officially known as the Removal of the Spare Room Subsidy, this policy cuts social security for social renters deemed to have an ‘extra’ bedroom, reducing vital support by 14 per cent if you have 1 extra room, or 25 per cent if you have 2 or more. This policy, introduced through the Welfare Reform Act, has – and continues to – affect people across the country, but it has not done so equally.
The North has borne the brunt of the bedroom tax. 12 years on, around 20 per cent of northern social rental households on Universal Credit in the North have a spare bedroom and are subject to the bedroom tax, compared to an English-wide average of 16 per cent. The North East is the worst affected region where 1 in 4 have a spare bedroom they’ll likely be getting financially penalised for.
There are disproportionate geographical imbalances in this policy. These imbalances stem from structural and systematic housing inequalities. The North East – a region with the highest proportion of social housing tenures – at 21.7 per cent– faces a mismatch between the size of households and the size of available social housing stock, with more bigger three-bed properties, and a lack of one-bedroomed properties, seriously limiting the options for downsizing (an aim behind the policy in the first place). This is deepening regional divides. This is deepening regional divides.
People here are already trapped in a regionally disproportionate system that’s affecting their ability to pay for life’s essential basics. The North East’s social renters face extra compounding issues having the highest rates of insecure work, so-called economic inactivity (such as caring responsibilities), and the lowest disposable incomes. These all have negative social and economic impacts, added to by the bedroom tax. No wonder the North East has the highest percentage (29.4 per cent) of people who find paying social rent difficult outside of London. The bedroom tax therefore further traps people in poverty – acting as part of a wider problem of reduced income, and causing knock on effects. As one study has argued, the bedroom tax gave rise to “a cascading dynamic of disadvantage or penalisation.” This can be seen in the bedroom tax adding an extra layer to housing unaffordability and contributing to poverty – particularly considering that UK-wide in 2022/23 1 in 3 social renters were only in poverty after housing costs were factored in.
This counterintuitive welfare system has a strong human impact. While research on the bedroom tax is limited, a qualitative study on those experiencing the bedroom tax in the North East and a similar study on those in Manchester showed the Bedroom Tax was contributing to “significant hardship among low-income families” as it removes a “significant proportion of their income.” With people experiencing extreme levels of anxiety, stress, fear and hopelessness, reliance on loans, and to cut costs – inadequately heated homes, social isolation, and poorer diets – with many parents skipping meals to cost-cut to prevent rent arrears. Everyone should be able to put food on the table, cover the bills and live a healthy life.
People who require social support are already in a tough position, with social renters more likely to have a lower income than others. Social security is meant to be a safety net that catches you when you fall, but the bedroom tax is a hole in the safety net – because it’s decided it’s too big for you. As a measure that solely targets those needing the social security, the bedroom tax hurts those already facing inequalities.
People who are homeless also fall within this category of people needing support – and the North East also has the highest homelessness rate outside London. Drawing on my previous experience as a Homeless Support Worker, the bedroom tax also exacerbates today’s homelessness crisis. Local authorities have limited options when considering permanent homes for homeless people, with the bedroom tax causing unaffordability. As a result, some accommodation offers are unable to go ahead, which leaves them waiting longer for a home. This is particularly pertinent when we know waiting lists for social housing have reached a 10-year high of 1.33 million households. Whilst Local Authorities can sometimes offer Discretionary Housing Payments, these are not long-term solutions, nor promised to everyone. What is a better solution is removing the bedroom tax.
Northerners who are affected by the bedroom are also affected by other regional inequality, causing a vicious cycle of entrapment. The bedroom tax plays just one part of wider regional divides and inequality. IPPR has previously noted how housing affordability issues are a result of series of interlinked problems. In turn these affordability constraints have a direct impact on people’s spending ability and local economies, with disposable income an important factor in determining living standards and poverty. Less disposable income (including as a result of the bedroom tax) constricts money into local economies, and therefore local growth. Similarly, in contributing to poverty and poor diet, the bedroom tax exacerbates poor health – something already felt disproportionately in the North. Good health is also essential for employment, economic prosperity, businesses and places, and improving health in the North would lead to substantial economic benefits. This cycle should be broken.
Twelve years on, inequality between those who have and those who have-not, and between places is still baked into the system. This has a compounding impact on Northerners who need secure social housing, and the safety net of an effective social security system. Ending the bedroom tax is one step towards tackling regional inequality—because where you live, and what you can afford, shouldn’t hamper your future. Beyond this, public spending remains disproportionate, with London receiving £2,747 more per person than the North in 2022/23. And when cuts come, history shows the North takes the hardest hit, widening the gap in power, wealth, and opportunity. To tackle these various compounding factors, and ultimately close regional divides we need fairer, place-based policies. Strong economies rely on healthy, secure communities.
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