The Scottish Federation of Housing Associations (SFHA) has welcomed the reiteration by the UK government that it will delay the LHA cap for tenants in supported accommodation by a year.

Initially announced earlier this month, the pledge was confirmed by Chancellor George Osborne in the House of Commons yesterday that the date from which this will apply will now be 1 April 2017.

The government said its review of the supported accommodation sector, due to report in the spring, “will provide a foundation to support further decisions on protections for the supported housing sector in the long term”.

Mary Taylor, chief executive of the Scottish Federation of Housing Associations, welcomed the decision to carry out a strategic review, which she said needed to be done “thoroughly and properly”.

But she added that the failure to remove the LHA cap threat completely means housing associations will still be faced with difficult strategic decisions.

Mary Taylor said: “While social rents are typically lower than LHA rates across Scotland, single people under-35 as well as people in supported accommodation will likely be adversely affected by the cap.

“Earlier this year, the SFHA carried out a preliminary study which found that the loss to the housing associations sampled could range from £5.2 million to £14.3 million a year and this could potentially increase to hundreds of millions of pounds a year across the entire Scottish sector.

“Any change to Housing Benefit can undermine the ability of tenants to pay their rent, thereby putting their home at risk and threatening both their physical and mental wellbeing.”

CIH Scotland said the 2016 Budget contained “no big surprises” but there will be “big implications” for people living across the UK.

Director Annie Mauger, said: “Further cuts, such as the changes to Personal Independence Payment announced last week and affirmed by the Chancellor, will make it more difficult to support some of the most vulnerable people in our communities to meet basic living costs.

“While housing policy is already devolved to the Scottish Government and further powers over taxation, borrowing and social security are due to be transferred through the Scotland Bill, there will be no quick, easy fixes. This latest announcement sets even greater challenges for the next Scottish Government.”

Patrick Harvie, co-convenor of the Scottish Greens, accused Osborne of “pulling the rug” from under Scotland’s children and young people, as his new budget inflicts further damage on the welfare state and reduce prospects for quality job opportunities.

He said: “The Chancellor has chosen to focus on his obsession to reduce public debt – a goal which he has failed to reach – despite the problem of household debt being so much more of a problem, and one which new savings schemes can do nothing to solve. He also expects people to endure his economic policies without the safety net of a decent social security system that previous generations built up.

“There are limits to what Scotland can do to protect people from the worst effects of this Tory budget, but that must not stop us from doing everything we can to show that there is a better way forward.”

Citizens Advice Scotland singled out issues affecting disabled people and low-paid workers – two of the biggest groups of CAB clients in Scotland.

Policy manager Keith Dryburgh said: “The confirmation of changes to the Personal Independence Payment (PIP) will mean that disabled people are set to lose entitlements of up to £3,000 per year to support them to live an independent life. PIP is one of the most common, and fastest-growing issues that people come to a CAB for advice about, and we’re concerned about the impact on vulnerable Scots, some of whom may also be losing almost £30 per week as a result of forthcoming changes to Employment & Support Allowance.

“The new ‘Help to Save’ initiative for people on Working Tax Credit is interesting, and we will want to see a lot more of the detail on how this is to be set up. Access to credit for people on low incomes has been getting more difficult for the last few years, so moves to help people build up a small savings cushion is welcome. However, to take full advantage of the scheme people would need to be in low-paid work for four years, so they may be limited in how much they can make use of it in practice.”