Bedroom tax facts, myth and legends: why evicting households for bedroom tax arrears makes poor financial sense in Scotland

The debate on whether Scotland should introduce a 'No evictions for bedroom tax' policy is gaining widespread public support, with many councillors, some councils, MSPs and MEPs now backing the principle of GLC's Scottish Parliamentary petition.  

GLC is aware, however, that some people and politicians remain undecided about the workability of not evicting tenants for bedroom tax arrears, and that a number of assumptions and assertions are circulating against the principle of the petition, which can be summarised as follows:

• Not evicting someone for bedroom tax arrears will mean many people who can pay won’t pay, which is unfair for those tenants who choose to pay, or are unable to do so.
• It would take several years to build up a sufficient level of arrears before a social landlord considered going for eviction, so what is all the fuss about?
• It would be unworkable for a social landlord to separate ‘bedroom tax arrears’ from other rent arrears, and therefore not evicting people for bedroom tax arrears cannot be practical.
• Not evicting tenants for the bedroom tax will damage the revenue streams of social landlords, make their business operations unsustainable, and ultimately damage the interests of other tenants who do pay.

Accordingly, in the interests of well informed public debate, GLC is publishing a 'Bedroom Tax Facts, Myths and Legends' paper  (opens as PDF) which explains the hard facts with reference to the relevant law, practice, and empirical evidence available in Scotland. We believe the facts overwhelmingly support the case for not evicting tenants for bedroom tax arrears in Scotland and hope that you will consider lending your support to our campaign by signing our petition here and tweeting and disemminating this post to a wider audience.

Oxfam Scotland backs 'No evictions for bedroom tax' campaign in Scotland

Oxfam Scotland is backing a change in the law that will help tenants affected by the controversial cuts to housing benefit stay in their homes in Scotland. The charity, which works with partners in Scotland to fight poverty and create sustainable livelihoods, is supporting a petition to the Scottish Parliament by Govan Law Centre (GLC), calling for an amendment to existing housing law.

The amendment will mean that rent arrears caused by the so-called 'Bedroom Tax' can't be used as grounds for eviction by social landlords like councils or housing associations. Government changes to housing benefit mean that, from April, people who are judged to have a 'spare room' will face a massive 14% cut in the support they get to keep a roof over their heads. Those with two 'spare rooms' will face a 25% cut.

Judith Robertson, Head of Oxfam Scotland, said: "Last year our Humankind Index for Scotland found that an affordable, decent and safe home is the top priority for Scots across the country. But housing benefit cuts will put thousands of people at risk of losing their homes. People on low incomes are already struggling.

"We recognise that social landlords are being placed in a difficult situation by these housing benefit cuts, but our priority surely has to be to keep families in their homes. The change in the law proposed by Govan Law Centre will help make sure that happens.

"We hope MSPs will support the petition, and we hope the UK Government realises the enormous damage these cuts will have on people."
 
 GLC's Principal Solicitor, Mike Dailly, said: "We are delighted that a leading global anti-poverty charity has decided to back our 'No Evictions for Bedroom Tax' petition in the Scottish Parliament.

"Oxfam's support for our Scottish campaign underlines the seriousness of the situation, with the prospect of tens of thousands of low income households in Scotland being threatened with homelessness unless they can find extra money for rent, and many families being pushed into destitution and poverty.

"We believe the Scottish Parliament has devolved powers which could be used to significantly mitigate the adverse impact of these changes to housing benefit, and hope that MSPs will join civic Scotland in supporting our No Evictions campaign".

Money Advice Scotland back 'No evictions for bedroom tax'in Scotland' campaign

GLC is delighted to announce that Money Advice Scotland has agreed to back the 'No evictions for bedroom tax in Scotland' petition and campaign. The petition to the Scottish Parliament now has 1,066 signatures since going live at the weekend, and is growing every day. You can sign the petition here.

Money Advice Scotland (MAS) is the national umbrella organisation in Scotland which promotes the development of free, independent, impartial, confidential money (debt) advice and financial inclusion. 

MAS serves a membership of over 200 members organisations and individuals drawn from local authorities, CABx, and other voluntary projects, who all provide money advice. Other members who are supportive of our objectives include Insolvency Practitioners, creditor and debt collection organisations.

GLC believes that the bedroom tax is the new poll tax in Scotland, and that bedroom tax arrears of rent should be treated as an ordinary debt in Scots law, so that tenants do not have to suffer the pain, suffering and indignity of bring evicted from their home because of the bedroom tax.

GLC calls for action on 'Bedroom tax' from Holyrood

The Scottish Parliament has been asked to change the law to prevent tenants being evicted because of changes to housing benefit. Speaking on BBC 1's Sunday Politics Scotland show, Mike Dailly of the Govan Law Centre said that people could be homeless because of the UK government reforms.  He said Holyrood should act to minimise the consequences of the change.

But, talking on the same programme, SNP MSP Linda Fabiani claimed little could be done until the Scottish parliament has more powers. The changes to housing benefit are intended to encourage mobility by discouraging tenants from staying in homes deemed too large for their needs. Mr Dailly said: "This is the new poll tax in Scotland. It's a vicious attack on the low paid and poor." 

The law on benefits is a reserved matter, controlled by the UK parliament at Westminster, but Mr Dailly said Holyrood could change the law in areas that it does control. "The Scottish government can do a lot to prevent people from being evicted. We are calling on is for the Scottish Government to change housing law so that if you incur 'bedroom tax' arrears that should be treated as an ordinary debt but not allow you to be evicted," he suggested.
 

You can sign GLC's Scottish Parliament petition for 'No eviction for bedroom tax' here. Almost 500 people have signed the petition within 48 hours of the petition going live on the Parliament website. The Sunday Politics Scotland show is available on the iPlayer here (41 mins in). Read more on this story from the BBC. 

Scottish Parliament: consensus for change at the Fair Access to the Legal Profession event

The student-led Campaign for Fair Access to the Legal Profession's (CFALP) event in the Scottish Parliament witnessed a remarkable consensus for progressive change from SNP, Labour and Lib-Dem MSPs, members of the Scottish legal profession, university representatives, civic society groups and law students tonight (23 October 2012).

The event hosted by the SNP's Edinburgh Central MSP, Marco Biagi heard from two fourth year law students who were now faced with the harsh prospect of being priced out of the Diploma (PEAT 1) after the Cabinet Secretary for Education, Mike Russell, moved their funding goal posts and any hope of being able to afford to complete the mandatory PEAT 1.  The voice of law students shortly to be excluded from Scotland's legal profession because of an unfair change in the funding arrangements was met with overwhelming support in a packed Committee Room 6 in the Scottish Parliament.

The event also included speeches from CFALP's campaign co-ordinator, Tim Haddow, NUS Scotland President, Robin Parker, and GLC's Principal Solicitor, Mike Dailly, who said:

"Scottish law students are not asking for preferential treatment - all they want is the right to borrow the same amount of student loan support that other vocational students can borrow. Architect students can borrow additional student loans for up to six years, while medical and dental students can borrow for their fifth year of study.  Postgraduate trainee teachers also have access to student maintenance loans. Why not law students?"

"There is no logic in the current policy of the Scottish Government.  It is regressive, unfair and against the aspirations that the Scottish Government has for an inclusive and successful Scotland. I hope the Scottish Government will reconsider".

Mike's full contribution is available online here.  

The debate session also heard contributions from Scottish Labour's Sarah Boyack MSP (who advised that Mike Russell MSP had now declined an invitation to convene a summit of all affected and interested parties in Scotland), the Scottish Greens' Alison Johnstone MSP, the Lib-Dems Liam McArthur MSP, Law Society of Scotland President Austin Lafferty and Dr Nick McKerrell of Glasgow Caledonian University. 

No-one disagreed that urgent action was required to prevent law students from less well off backgrounds being excluded from PEAT 1 by reason of socio-economic circumstances. 

Scottish action on payday loans: update

GLC has been invited to present its Discussion Paper on proposals to help financially vulnerable Scots cope with predatory payday lending practices at a roundtable discussion in the Scottish Parliament next month.

The event is being hosted by Kezia Dugdale MSP, Shadow Youth Employment Minister on Wednesday 24 October 2012, and will bring together a wide range of national consumer, civil society and advice bodies.

GLC believes the Scottish Government can introduce a Fast Track Debt Arrangement Scheme targeted at payday loans under existing powers in the Debt Arrangement and Attachment (Scotland) Act 2002 as amended.

Royal Assent for Property Factors (Scotland) Act 2011

The Property Factors (Scotland) Act 2011 has received Royal Assent this month, marking the end of a four year campaign initiated and led by Govan Law Centre (GLC), and the start of a better deal for Scotland's homeowners.

The genesis of the Bill was grassroots. At GLC's fortnightly casework meetings our solicitors would repeatedly flag up the growing number of instances of homeowner exploitation by property factors. GLC's local Board of Trustees were equally troubled with the ability of Glasgow's citizens to be ripped-off with impunity. It was apparent something had to be done to redress the imbalance between the rights of unregulated companies and the rights of Scottish homeowners, many of whom were financially or otherwise vulnerable.

A Bill proposal and consultation paper drafted by GLC was first introduced in the Scottish Parliament by the then Govan MSP Gordon Jackson QC in March 2007, but had insufficient time to progress. The reins were quickly picked up by Maryhill MSP Patricia Ferguson and in October 2007 a fresh proposal and consultation paper was published by the Scottish Parliament. High profile support came from a series of BBC tv and radio investigations and a campaign for law reform sponsored by Glasgow's Evening Times newspaper.

Constant publicity led to the OFT launching a market investigation into Scotland's property factor industry, which had the effect of kicking Patricia Ferguson's Bill proposal into the long grass. Despite the OFT recommending the Scottish Government's favoured solution of 'voluntary accreditation', Patrica Ferguson and GLC ploughed on, gathering support and finally making a winning case for major law reform to protect Scottish homeowners.

GLC's Mike Dailly and draftperson of the Bill said: "We're very proud of the Property Factors (Scotland) Act 2011 because its a victory for common sense, and will help prevent homeowners in Scotland being exploited, while providing a new accessible tribunal remedy with 'legal teeth' if they do get stung.  It's also an example and case in point of the importance of local community law centres. Law centres are being threatened in England and Wales, but we need more of them in the UK, not less".

"Without Patricia Ferguson's tireless dedication and hardwork the Bill would not have seen the light of day. We would acknowledge the tremendous support from Patricia's researcher Chris Kelly, the Parliament's excellent Legislation Team, the Local Government Committee and various civil servants at the Scottish Government who all helped to make this progressive piece of legislation possible".

Scottish Parliament Committee hear evidence of employers who “take advantage” of migrant workers

Govanhill Law Centre’s submission to the Scottish Parliament’s Inquiry into Migration and Trafficking has been cited in the Parliament’s final report.

The Inquiry, held by the Equal Opportunities Committee last year, heard evidence from a large number of stakeholders including migrants, local authorities, the voluntary sector, police, academics, journalists, MSPs and the Crown Office. The innovative partnership working approach of the Hub in Govanhill was recognised by the Committee as an example of good practice.

The Inquiry heard evidence on the nature and extent of migration to Scotland and described the lack of migration data, public perceptions about migration and the influence of the media as “key overarching issues“.　 The Committee recognised key challenges in “improving awareness among migrants about public services, and their rights and entitlements“, “employment including exploitative employment practices“, health, education, housing, policing and enforcement.

Govanhill Law Centre Solicitor Lorraine Barrie said “we are pleased that the Committee have recognised the significant barriers many migrants experience when living and working in Scotland in terms of receiving advice and information about their rights and practical barriers to reporting exploitative employers. 　 We are also pleased that the partnership working approach of the Hub in Govanhill, which we are part of, has been recognised as an example of good practice“.  The full story can be read on Govanhill Law Centre's website here.

Property Factors Bill debated before full Scottish Parliament on Wednesday

The Scottish Parliament will debate the Property Factors (Scotland) Bill at Stage 1 on  the afternoon of Wednesday, 8 December 2010.  This is a make or break moment for the Bill.  The Bill, drafted by Govan Law Centre's Parliamentary Unit for Patricia Ferguson MSP, has secured the backing of the Parliament's Local Government and Communities Committee, and also has wide public support across Scotland.  However, the Bill now needs to secure the support of MSPs in the full Chamber on Wednesday in order for it to progress.

Local Government & Communities Committee backs Property Factors Bill

The Stage 1 Report of the Scottish Parliament's Local Government and Communities Committee has supported the general principles of the Property Factors (Scotland) Bill, which will help pave the way for the Bill's forthcoming Stage 1 debate before the Chamber next month. 

The Committee's report is available here; it makes a number of recommendations to amend the Bill to take on board practical issues which arose during evidence; some of the key conclusions are reproduced below:

"45. The Committee believes that there is clear evidence testifying to the problems encountered by members of the public with property factors and that there is therefore a need to proceed with a statutory framework to regulate property factors. It concurs with those witnesses who stated that a voluntary accreditation scheme would not address the problem of factors that provide a poor service to consumers. While the Committee acknowledges the work already conducted by the Scottish Government’s working group in developing a national voluntary accreditation scheme, it does not consider that there is evidence to suggest that this will be ultimately successful in addressing inadequate factoring services. It therefore supports the approach taken by the Member in Charge of the Bill in proposing a statutory framework for the regulation of property factors.

58. The Committee therefore considers that it is appropriate for housing associations and local authorities to be included within the meaning of “property factor” contained in the Bill.

62. The Committee welcomes the meaning given to “property factors” in the Bill. It considers that it is important for the definition to include the ownership and management or maintenance of land that is available for use by the owners of any adjoining or neighbouring residential properties. The Committee considers that consumers should be entitled to a quality service and that a company should not be able to avoid the provision of this service as a land-owning maintenance company ...

110. The Committee recognises that complaints against property factors can often be very technical and concurs that a homeowner housing panel will provide an effective structure for dealing with such complaints.

 122. The Committee considers that difficulties faced by homeowners in switching property factor represents a major issue, particularly in relation to land-owning maintenance companies. While it recognises that there may be less need for homeowners to switch once the provisions in the Bill raise standards in the sector, it nevertheless believes that a simplification of the process would be of benefit to the consumer. The Committee believes this is an important issue that might require legislation. However, the Committee also recognises it is a very complex issue and therefore calls on the Scottish Government to undertake further research".

Factor cases ‘swamp courts’

The Evening Times reports today: Courts are being “swamped” by cases of property factors taking legal action against home owners, the Scottish Parliament heard. And two Glasgow MSPs revealed they have been inundated with complaints about factor disputes.  Maryhill MSP Patricia Ferguson and lawyer Mike Dailly, of Govan Law Centre, told the Local Government Committee how big a problem disputes with factors had become and that a new law was essential.

Ms Ferguson’s Property Factors Bill would set up a compulsory registration scheme with a set of standards designed to root out rogue factors. It would also provide an independent dispute resolution system to prevent costly court cases. Ms Ferguson said problems with factors has become her biggest caseload, prompting the Bill. She said: “Not a day goes by without someone from across Scotland contacting me for advice. Not one day.”

A series of Evening Times investigations published over the last two years have also uncovered a catalogue of complaints and shocking cases of overcharging and poor work. Our reports were passed to the committee for it to consider. Mr Dailly said that as well as contacting politicians the courts were under pressure and people put into debt, which could be avoided. He said: “The reason Govan Law Centre got involved was because we were seeing what is happening day in, day out. Sheriff courts are swamped with property factors raising actions for payments. “A lot have added on costs, expenses are attached, and I have seen many people sequestrated by factors.”

Glasgow SNP MSP Bob Doris also confirmed the frequency of complaints. He said: “I am not short on the number of these cases I have on a weekly basis from people in factoring disputes.” Ms Ferguson said: There are property factors who threaten court action, but never see it through. Yet the charges are still added to bills.That is not acceptable.” It was the final session of evidence to the committee and it will now consider it before submitting it for the Bill.

GLC's evidence can be seen on the Scottish Parliament's Holyrood TV here (opens as video); and the Bill's Committee Page is here.

Regulation of property factors in Scotland

The Local Government Committee of the Scottish Parliament has made a call for evidence on the Property Factors (Scotland) Bill (the Bill and accompanying documents were drafted with assistance from GLC's Parliamentary and Policy Unit); for further details please see here.  The Scottish Parliament's Information Centre (SPICe) has published a new research briefing on the Bill, which is available here (opens as a PDF).

The SPICe briefing includes experience from the Republic of Ireland, where the Property Services Regulatory Authority (PRSA) has recently been established on an administrative basis. Legislation, currently before the Oireachtas, is intended to establish the PRSA on a statutory basis and will apply to all Property Services Providers (PSPs). PSPs are defined to include all those involved in the purchase, sale and letting of any land or property as well as those involved in the provision of property management services.

Under the proposed legislation, the functions of the PRSA will include operating a licening system covering all providers of property services; setting and enforcing standards for the grant of licences and provision of services; establishing a system of investigation and adjudication of complaints; promoting increased consumer protection and public awareness; and establishing a compensation fund to compensate parties who lose money as a consequence of the dishonesty of a licensee

The PSRA will have power to sanction a licensee up to and including the revocation of a licence and may also impose fines of up to €250,000 where a PSP is found to have engaged in "improper conduct". The Authority may bring a prosecution against a PSP for failing to comply with his or her statutory obligations or against any person providing a property service without a licence which may result in either a large fine or imprisonment or both. Under the new regulatory regime all PSPs are required to contribute to the "Property Services Compensation Fund". Where a person suffers a loss due to the dishonesty of a PSP the Authority may award compensation from the "Fund".

Bill to regulate property factors gets cross party support

Both the Herald, and the Evening Times, report that a bill to curb the power of rogue property factors and strengthen the hand of homeowners has taken a huge step forward by achieving strong cross-party support at Holyrood.

The proposed Property Factors (Scotland) Bill, introduced by the Labour MSP for Glasgow Maryhill, Patricia Ferguson, had to go out to consultation and then pass the normal first hurdle for a Member’s Bill of attracting the support of at least 18 MSPs. In fact, when the deadline passed 45 had signed up and although the bulk were fellow Labour members, the fact that 11 were from other parties indicates a broad enough consensus to suggest the Bill has a real chance of success.

Four MSPs each from the SNP and Liberal Democrats signed up, plus both the Parliament’s Green MSPs and Elizabeth Smith, the Conservative MSP. GLC's Parliamentary Unit has been engaged to draft the Bill. The Herald story is here, and the Evening Times here.