Benefit cap will not block building plan

Council insists 500 new homes will go ahead

Proposals to build 500 new social homes in Rutherglen and Cambuslang will go ahead despite caps on housing benefits, South Lanarkshire Council has said.

The local authority said this week that the UK Government’s plan to cap housing benefit in 2019 would bring new financial challenges.

But it said the proposed welfare cuts were taken into account when setting targets for new-build affordable homes.

Bosses at the council spoke out this week after the Department of Work and Pensions said it would slash housing benefit by up to 25 per cent for people aged 35 and under who are living alone.

Daniel Lowe, executive director of housing and technical resources, said: “The impact of the continuing implementation of welfare reforms means the operating environment for social landlords will remain extremely challenging over the years ahead.

“We have, however, developed our investment plans for the existing council stock and new-build housing to take account of the potential impact of the welfare reform programme.

“While we will continue to review our financial projections, robust financial planning and low levels of historical debt mean that we are able to continue with our investment and house building programmes.”

Social and political commentators speculated last week that the Scottish Government’s target to build 50,000 social homes by 2021 may not be achieved because of a drop in revenue, which is an expected consequence of the cap on housing benefit.

Across South Lanarkshire Council 500 homes - 100 in Rutherglen and Cambuslang - are scheduled to be built by that deadline.

The three-year housing programme coincides with the roll-out of universal credit across the county.

This will see housing benefit paid to claimants, as opposed to it being directly paid to the social landlords.

Mr Lowe added: “We are clear that some of the most significant welfare changes are yet to take place.

“Indeed, one of the most significant changes to date will take place within South Lanarkshire during 2017 with the further expansion of universal credit scheduled to commence in October.

“This will significantly expand the number of council tenants who receive support to pay their rent through universal credit.

“Experience of universal credit to date demonstrates that for some council tenants it has resulted in levels of hardship and impacted upon their ability to pay rent.

“Like all other social landlords, the council has seen a direct impact upon the rental income collected and the resources required collecting this income.

“The planned restriction of social rents to local housing allowance levels in 2019 will impact further upon service provision and our ability to meet needs.”

South Lanarkshire Council said it has worked to support tenants facing welfare reform as much as possible, providing advice through its Money Matters advice service and Benefits are Changing team.

It has supported people affected by the bedroom tax and awarded discretionary housing payments to those eligible for additional financial help.

The operating environment for social landlords will remain extremely challenging