The Scottish Federation of Housing Associations (SFHA) has warned that the Scottish Government’s increase in funding for Discretionary Housing Payments (DHPs) is likely to be “overwhelmed” by the further cuts in social security entitlement.

Social security minister Jeane Freeman revealed that the government is to spend almost £58 million, including a £7.7m increase in DHPs, mitigating the impact of welfare cuts in the first year it has control over DHP funding.

The £57.9m made available to local authorities is made up of £47m earmarked for the ‘bedroom tax’ and £10.9m for other UK government welfare reforms including the lower benefit cap and Local Housing Allowance rates.

However SFHA policy adviser Jeremy Hewer said the increased DHP budget “cannot fully mitigate the impact of the benefit cap”.

He said: “The increased allocation for Discretionary Housing Payments, welcome though it is, will unfortunately be overwhelmed by the further cuts in social security entitlement.

“According to the report by Sheffield Hallam University, presented to the Social Security Committee in October 2016, the reduction of the benefit cap will hit as many as 11,000 households – many of whom will comprise families with three or more children. The boost in the Discretionary Housing Payment Budget cannot fully mitigate the impact of the benefit cap.

“It will very likely result in significant rent arrears and a rise in evictions, given the household composition of many of those involved; this, in turn, may lead to an increase in the number of looked after children. Therefore, the benefit cap is yet another example of a false cost saving: the expenditure may be off the DWP’s books, but it will lead to added pressure on the budgets of local authorities and housing associations.

“The SFHA will continue to work with the Scottish Government to help mitigate the effects of the benefit cap and help make best use of the limited resources available.”