Industry news


Councils fear surge in evictions as UC rollout accelerates


accelerates across the country over coming months. Social landlords have warned they are under


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increasing pressure to start eviction proceedings against tenants amid a large rise in rent arrears attributed to the new benefit payment system. The initial six-week delay before payments are made to new claimants is cited as a particular problem. The National Housing Federation and


Chartered Institute of Housing have said UC presents a significant challenge to landlords as they try to prevent tenants from becoming homeless, while their debts and rent arrears grow at a fast pace. Increasing numbers of private landlords are reportedly refusing to accept tenants who rely on benefits to pay their rent. Political arguments over the benefit system are


attracting national headlines with Theresa May and Jeremy Corbyn angrily clashing on the topic at Prime Ministers Questions. Conservative backbench MPs have urged the Cabinet to delay the roll-out of UC, while a review is undertaken into problems such as payment delays, financial penalties and administrative difficulties. The architect of the new benefit system Iain


Duncan-Smith has added to the Government’s difficulties by saying that changes to UC were forced on him by the Treasury under George Osborne and these created many of the current processing and payment difficulties. But Work and Pensions Secretary David Gauke


has repeatedly rejected pleas for change saying that emergency loans are already helping half of all new claimants. Campaigners point out that these loans have to be quickly repaid and are themselves a source of problems. However, he accepted calls to change a paid-for telephone advice service into a free one. Critics say this does not go far enough and insist the initial waiting period is reduced.


FEARS Universal Credit combines six different working age benefits into a single payment. This simplification is widely supported, but opponents complain the six-week delay before a payment is made combined with IT difficulties and how it is being administered have undone all its positive aspects. The system is due to be rolled out to 50 Job Centres a month from now on and critics fear that thousands of tenants could lose their homes as a result, as well as making vulnerable people reliant on food banks and loan sharks. There are increasing reports that growing


numbers of private landlords are refusing to accept tenants who are reliant on UC, even though many are in paid work, because of problems in getting


ouncil and housing association chiefs are expecting a big increase in evictions as the introduction of Universal Credit


rent paid on time. This is putting further pressure on councils and housing associations.


The Resolution Foundation thinktank has


warned that about 2.5 million low-income working households will be more than £1,000 a year worse off when they move on to Universal Credit. Croydon Council in south London, which


piloted Universal Credit’s introduction, led calls for a pause in the rollout. It said it is spending £3m this year helping thousands of tenants in arrears to avoid eviction, and said the 50 per cent increase in support costs was unsustainable. “The Government needs to slow down this full


rollout process and consider lessons from pilot areas like ours or face a bad situation becoming much worse,” said Alison Butler, the Council’s deputy leader and cabinet member for homes, regeneration and planning. In the first quarter of this year Croydon issued


959 special housing payments to help households maintain their tenancies, compared with 529 in the same period last year. Without this support, hundreds of tenants would have become homeless, it said.


EVICTIONS A leading opponent of the current system is Frank Field, the chair of the Commons work and pensions committee. He said: “If claimants fall foul of just one of the many confusing rules, punishing pay schedules or unreliable computer systems dotted around this assault course, we know the outcome in all too many cases is either grinding poverty or destitution.” He has also linked UC to the growing use of food banks. His committee called for evidence from


landlords in areas where UC is already being delivered and Mr Field cited figures from Halton Housing Trust, a fifth of whose tenants are now on the full digital UC service. The Trust has reported a 100 per cent increase over the past year in the number of tenants it has started eviction proceedings against. Seven tenants owed at least £2,000 more in rent arrears than they had before going on to UC. The work and pensions secretary David Gauke,


has rejected calls to pause the rollout while design flaws are fixed. In his party conference speech he described universal credit as a step towards a Tory vision of the modern welfare state that was “compassionate, practical and aspirational”. This has failed to stem the calls for change to the system and it has become one of the hot political topics of the year. Social landlords say increases in the number of


tenants going into arrears as universal credit is rolled out is financially unsustainable and


The National Housing Federation has said UC presents a significant challenge to landlords as they try to prevent tenants from becoming homeless, while their debts and rent arrears grow at a fast pace


affecting their ability to build new homes as operating surpluses diminish. Many landlords have increased the cash set aside to cover bad debts related to arrears. They say this highlights how different policies in the welfare and housing sectors are not being properly linked up and are actually working against each other.


CHALLENGES Melanie Rees, head of policy at the Chartered Institute of Housing, has called for the Government to better align its welfare and housing policies. While welcoming the decision to unfreeze the Local Housing Allowance, she said Ministers should also reverse the benefit cap reduction and make changes to how universal credit is paid. Sue Ramsden, head of policy at the National


Housing Federation, said housing associations were working hard with tenants to sustain tenancies and minimise arrears. “Despite some assurances from the Department for Work and Pensions that the process to assess claims has improved, we still have real concerns around the impact of the long wait for families on very low incomes to receive the benefit,” she said.


The Scottish government has used its devolved


powers to introduce flexibilities to the way the new benefit is administered in an attempt to prevent rent arrears and make it easier for tenants to cope with the financial shock of the switch.


In future Scottish tenants moving onto UC will


be able to choose to be paid fortnightly and request that the housing benefit element is paid directly to their landlord. Many tenants used to weekly or fortnightly income, have struggled to budget using a system that pays people on a monthly basis.


www.housingmmonline.co.uk | HMM November 2017 | 7


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