Lord David Freud has threatened to withdraw or restrict housing benefit subsidy to councils which ‘inappropriately’ reclassify properties for bedroom tax purposes

The welfare reform minister, in a letter to council chief executives today, said there have been cases of councils redesignating properties without reducing their rent to reflect a loss of a bedroom. Lord Freud said he expects ‘the designation of a property to be consistent for both housing benefit and rent purposes’. The letter said: ‘Blanket redesignations without a clear and justifiable reason and without reductions in rent, are inappropriate and do not fall within the spirit of the policy. ‘If it is shown properties are being redesignated inappropriately this will be viewed very seriously,’ the letter said. Lord Freud said that where the Department for Work and Pensions suspects properties are being re-designated inappropriately it will commission an independent audit to ‘ascertain whether correct and appropriate procedures have been followed.’ He said redesignating properties without reducing the rent would lead to incorrect housing benefit subsidy claims being submitted to the DWP.