‘Rescue Plan’ Put On Standby Ahead Of Landmark Bedroom Tax Ruling Tomorrow

Ministers are preparing to rescue measures targeting council tenants with spare bedrooms if they lose a landmark case at the High Court tomorrow.

Ten families with disabled parents or children are awaiting the outcome of a judicial review on whether the Government has discriminated against them.

Under the policy, which came into force in April, 660,000 families in social housing have had their housing benefit cut because they have one or more spare bedrooms. The regulations are being challenged by the families on the ground that they need the extra room to cope with the disabilities.

The policy, which has already provoked strong criticism from disability and housing organisations, aims to save £1 billion over two years. A judgment in favour of the families will have big implications for the 400,000 disabled people affected by the changes and could halve the savings.

The Chancellor sneaked the plan in as part of his welfare cutbacks two years ago, arguing that the taxpayer should not subsidise under-occupied social homes. Those with one spare bedroom have had housing benefit cut by 14 per cent; those with two or more empty bedrooms have had a reduction of 25 per cent. Claimants can choose to make up the rent but many have to move out rather than pay. The average extra payment required for households with one spare bedroom is £738 a year.

Whitehall sources said ministers were hoping that the judgment would go in their favour. They admitted that the ruling could lead to concessions exempting further groups of claimants. Ministers have already tweaked the policy to exempt sisters sharing if one is disabled, and foster carers who have a spare room between placements will also no longer be penalised.

David Orr, chief executive of the National Housing Federation, said: “Many disabled people have been forced to cut back on food or bills in order to pay … even though their homes are, in many cases, specially adapted.” Annaliese White, 49, was born with spina bifida hydrocephalus. She used to work part-time but has been bedridden for the past seven months. She and her partner, Kevin Garly, have had their housing benefit cut by £130 per month to pay for the “spare bedroom” in their specially adapted flat.

“We’ve already had to cut back on basic food and transport and are now just eating what’s left in the freezer,” she said. “I can’t walk at all and had to take taxis before I was bedridden, which we now can’t afford. My partner, who also has spina bifida, can walk on one leg but he is unable to afford transport.” The couple applied for a discretionary payment but were told that they had sufficient income to cover their costs.

Lord Freud, the Welfare Minister, will mount a robust defence of the policy this week, claiming that it puts social housing tenants on the same footing as private housing tenants, where benefit is also paid per room.

Labour has been campaigning against what it calls “the bedroom tax”. Lord Freud is expected to point out that several Labour councils have tried to get round the rules by redesignating two-bed houses as one bed-homes.

Ministers will consider lodging an appeal against the ruling if it goes against them, in their determination not to scrap the policy.