Media Release: Financial impact of welfare reform laid bare in new report

THE potentially significant financial losses to tenants on low incomes, living in housing association and co-operative properties in Scotland, is laid bare in a new report by the Scottish Federation of Housing Associations (SFHA).

Begins a spokesperson: “The Impact of Welfare Reform on Housing Associations and Housing Co-operatives in Scotland, published today (Friday 17th August 2012) reveals that the sector’s tenants are set to lose hundreds of millions of pounds as a result of the UK Government’s welfare reforms (1).

“Some changes are already in place. And starting in April 2013, the reforms are to be implemented in full over the next four years so that by 2017 all existing working-age benefit payments, including housing benefit, will have been replaced with a single Universal Credit (2).”

The report reveals that:

  • Welfare reforms will result in a loss of benefit for working-age tenants in the housing association and co-operative sector of between £123m and £228m, by 2017.
  • Tenants in housing association and co-operative properties will lose around £33.5m annually, in Housing Benefit alone.
  • Tenants will lose £50m a year as a result of benefits being uprated using a different inflation calculation (CPI instead of RPI).
  • The loss of benefits will continue to grow in real terms after 2017 due to the change to using CPI.
  • Housing associations and co-operatives will face a huge financial burden through rent loss from increased arrears, despite the work being done now to advise tenants. Lost rental income in the sector could be at least £50m annually.

Tenants to be hit hardest by the reforms are:

  • Tenants who are out of work, including those with disabilities and complex support needs.
  • Tenants who are on low incomes and may have children (larger families in particular).
  • Tenants who have non-dependents living with them.
  • Tenants who are considered to be ‘under-occupying’ their social rented property (even if there is no suitable, smaller accommodation available).

SFHA director of Policy, Maureen Watson, said:

“The findings of our report lay bare the real financial loss to working-age tenants in our sector, who are already on low incomes and many of whom are currently struggling with their finances.

“The report also makes disturbing reading for our members, housing associations and co-operatives, who are charitable or not-for-profit providers of social housing and related services the length and breadth of Scotland.

“Our sector, which manages around 11 per cent of all homes in Scotland, is a major provider of housing and as such these finding should be of concern to Scotland’s politicians.”

Ms Watson continued:

“We urge the UK and Scottish Governments to take full account of these findings and to appreciate the substantial loss to local economies, the increased hardship for families, and the additional strain on social landlords at an already difficult time.

“Contingencies must be in place with better information and support provided for tenants, and to help social landlords whose staff will be under huge pressure to help tenants through these changes.”


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1) The Impact of Welfare Reform on Housing Associations and Housing Co-operatives in Scotland, is available on the SFHA website HERE:,com_docman/Itemid,82/gid,65/task,cat_view/

2) Starting from April 2012, a package of reforms is being implemented over a four year period. In April 2013, an under-occupation penalty is being introduced into Housing Benefit for working-age tenants. At the same tome, a limit is being placed on the total benefit income that a household will receive (the cap). From October 2013 through to 2017, all of the main working-age benefits, including Housing Benefit, is being replaced by a single integrated benefit, Uinversal Credit.

3) There is a serious shortage of quality affordable housing across Scotland, with approximately 335,000 households on waiting lists. Statistics supplied to SFHA by the Scottish Housing Regulator (5 July 2011) based on data in the 2009-10 Annual Performance and Statistical Return.

4) The SFHA was established in 1975 and has around 170 members providing affordable housing and wider community services in Scotland, as well as a further 200 commercial members. The SFHA is owned by its membership and exists to support the work of housing associations and co-operatives in Scotland by providing services, advice and good practice guidance.

5) The SFHA is the voice of the principal builders and managers of new affordable housing for rent in Scotland. Housing Associations own and manage around 40 per cent of the country’s affordable rented housing stock, over a quarter of a million homes across Scotland.

6) Housing associations and co-operatives are not-for-profit bodies regulated by the Scottish Housing Regulator.

MEDIA RELEASE posted by the SFHA. You too can post media releases (aka press releases) on For more information, email here.

Contact: Claire Munro