Councils and housing associations are reclassifying thousands of bedrooms across Britain as box rooms, studies or non-specific rooms so that tenants can avoid the so-called “bedroom tax”.
Under new regulations brought in last month, council tenants with one spare bedroom will lose 14 per cent of their housing benefit, while those deemed to have two or more spare will lose 25 per cent. The Government said this would result in £490m savings for the taxpayer in 2013-14.
But councils in Leeds, Nottingham and North Lanarkshire in Scotland have already found a way to circumvent the law. One of the largest housing associations, Knowsley Housing Trust in Merseyside, has also reclassified more than 500 bedrooms, while Edinburgh, Birmingham and York councils are looking into it. The latter will get inspectors to check whether a bed can actually fit in each room.
Labour-run Leeds City Council has reclassified 837 bedrooms in homes across the city in a move the deputy leader, Peter Gruen, said was “prompted by welfare changes”. One third of these, which would have been deemed “under-occupied” before, will now be exempt from the spare room subsidy. “This is a totally perverse tax,” Mr Gruen said. “Fair-minded councils cannot simply stand by and see such havoc.”
Reclassification was based on specific criteria: where bedrooms were used as box rooms, where they were entered through another room, or where they were on the ground floor and not near a bathroom. Tenants will still pay the same rent as before, Mr Gruen added, and will be reimbursed any money that was deducted as a result of “under-occupancy” conditions. Labour-led Nottingham City Council has reclassified 1,000 two-bedroom flats in high-rise tower blocks as one-bedroom, while bedrooms less than 50 square feet could be reassessed.
Jim McCabe, leader of North Lanarkshire Council, said authorities “have been left to pick up the pieces of this horrendous reform”.
A Government spokeswoman said it had provided £150m to councils for discretionary housing payments to support vulnerable people. She added: “Councils may choose to redefine some properties, but we don’t expect this to be widespread.”