The chief executive of the Scottish Federation of Housing Associations (SFHA) has said new welfare changes could be as devastating to the sector as the bedroom tax.

New measures announced by Chancellor of the Exchequer George Osborne in yesterday’s Budget Statement include a tightening of the benefit cap and cuts to tax credits.

Mary Taylor of the SFHA said: “The reduction in the benefit cap from £26,000 to £20,000 in Scotland will hit those who had already had their benefits capped hardest. The latest report from the DWP states that 800 households in Scotland are subject to the current benefit cap, and reducing the cap is likely to more than double that number.

“Some of these households will be women and their children fleeing domestic violence who are forced to live in temporary accommodation. A Scottish Parliament Committee report recently highlighted existing inequality for women, which has been aggravated by the reforms.”

She went on to describe the decision to freeze working age benefits for four years and restrict tax credits and Universal Credit to two children, affecting those born after April 2017, as only serving “to make it harder to escape the poverty trap”.

Ms Taylor also reiterated the SFHA’s opposition to the removal of automatic entitlement to housing benefit for 18-21 year olds.

She continued: “The Chancellor announced a 1% reduction in the level of social housing rents every year for the next four years; however, with housing devolved in Scotland, there is no means to apply a national rent reduction, so it is difficult to see how this will work in practice. We await further detail regarding what this will mean for our colleagues in England.

“As a consequence of these new cuts to welfare, reduced income and increased costs to housing associations – in terms of increased collection costs and bank charges – will make it more difficult to invest in new supply of affordable housing and will put more pressure on the social rented sector.

“Such cuts have the potential to be just as damaging as the ‘bedroom tax’.”