Universal Credit and Housing
The APPG on Universal Credit is a cross-party group, which was established in order for Members of Parliament of all parties to be able to come together to discuss the experiences of their own constituents, to receive advice and support from various agencies, to share best practice at supporting constituents and monitor this critical policy as it is rolled out.
The APPG accepts the core aims of Universal Credit (UC) in simplifying the benefits system and making it easier for people to move into work. The reality of UC, however, does not live up to these good intentions. We are seriously concerned that the design of UC does not sufficiently take into consideration the specific needs of the poorest working age people in the UK, and that in its current form, UC does not work in their best interest.
On 6 December 2017, the APPG held an evidence session on UC and housing, hearing evidence from The Residential Landlords Association and Orbit Housing, chaired by Ruth George MP.
The following parliamentarians were present: Ruth George MP (Chair), Anneliese Dodds, Stephen Lloyd MP (Vice-Chair), Theresa Pearce MP, Martin Whitfield MP, Phillipa Whitford MP
- THE RESIDENTIAL LANDLORDS ASSOCIATION
The Residential Landlords Association (RLA) is the national voice for landlords. Representing over 35,000 landlords, it is the UK’s leading landlord association.
Direct payments to landlords is a big win.
The RLA survey of landlords after the Autumn Statement had 545 responses:
- 2/3 said they didn’t have enough confidence to let to UC tenants
- 73% said they didn’t have confidence in the DWP to enable recovery if rent arrears occur under UC
- 38% of tenants are in arrears in 2017 compared to 27% in 2016 as more tenants move from Local Housing Allowance (LHA) to UC
Private landlords have worked well with Local Authorities under LHA. There is not the same support under a national system.
More landlords are considering leaving the buy-to-let sector following the ending of tax relief on mortgage interest.
- Direct Payments – all tenants should have the choice to opt for them. If housing costs are going to landlords from the start of a claim it will minimise arrears and the risk of eviction.
- Arrears under UC can’t be reclaimed under the UC system when a tenant leaves. Under LHA a landlord can go to tribunal to seek redress for arrears and/or damage and costs incurred by a tenant, but there is no formal process for this under UC.
- Information sharing – consent is needed for DWP to share information with a landlord from the start of a claim. Landlords get no notification of a tenant moving onto UC. Private landlords could do with a less detailed version of the Landlord Portal.
- ORBIT HOUSING
Orbit Housing are the largest house builder nationally building 1,700 homes per year and provide £3m in maintenance and support services to over 100,000 customers across the Midlands, the East and South East.
There are 1,000 Housing Associations in Britain.
39% of customers are worried about paying their rent and utility bills.
4,000 customers used a food bank last year.
Once rolled out Orbit will have 11,000 customers on UC.
Currently 1,400 customers are on UC – of them, only 23% are not in arrears. 48% were already in arrears, but now owe more. 17% were fine but are now in arrears now they are on UC.
Across Orbit’s tenancies, £61m needs collecting from tenants and the workforce for rent collection is 18 people.
77% of UC tenants are in arrears of an average of £1,000 each.
Arrears are projected to increase from £7m to £15m.
The announcements of ending the 7 day wait and 2 weeks’ transitional payment of LHA were welcomed.
Orbit are trying to map customers finances as they transfer from 4-weekly to monthly payments.
Unless DWP have made a fault, landlords can’t reclaim arrears from DWP.
Eviction is a last resort and is an expensive process for any landlord, but it is sometimes necessary.
If there are arrears in a joint tenancy, they are jointly responsible, but that creates problems if one partner leaves.
Plus, there are big problems around 4-weekly pay.
The government needs to accept more regular payments, a tenant’s choice of Direct Payments to the landlord and that there are serious problems around family break-up for tenants.
Case example: A 20-year-old single parent with one child separated from her partner. This creates a complicated process due to splitting the housing element of UC. In August 2016 her arrears were £438 with no regular payments. Orbit didn’t know she was on UC so couldn’t apply for direct payments. Her arrears are now £2,162 and Orbit are having to take legal action.
Alternative Payment Arrangements (APAs)
Orbit have 50 customers on APAs to pay arrears via deductions from UC payments.
The Landlord Portal went live for them 4 weeks ago but there have been problems with it.
Data from the Portal is good – Orbit are loading asset data weekly and get a request from DWP for rent liabilities.
Orbit can ask for APAs at the start, however they also need to be notified about changes, from their tenants.
In social housing, arrears follow the tenant, unlike with private landlords who have to complete a UC47 to apply for an APA but are seeing problems with secure emails.
Homelessness Act projects have helped.
E.g. Oxford received an EU grant to the Local Authority.
- Options for alternative payment cycles such as 2-weekly. 58% of Orbit’s customers are used to 2-weekly cycles.
- Give all tenants the choice of Direct Payments from the start of the UC claim and in the case.
- Advance payments are still a debt to pay off and lead to dependency as claimants do not have enough to get by on.
- The Landlord Portal has made a big difference to Orbit but increased data protection issues next year may create problems.
- Family breakdown – the remaining parent only receives 50% of the housing payment and is therefore in arrears straight away.
- Need to get rid of the benefit cap.
- If one partner moves out, the remaining partner in the property should get the whole of the housing element of UC.
EVIDENCE FROM PARLIAMENTARIANS
The following concerns and recommendations were raised and made.
- STEPHEN LLOYD MP
I led a Westminster Hall debate about ‘The effect of Universal Credit on the private rented sector’ on Tuesday 9January 2017 at 9.30am.
- ANNELIESE DODDS
There’s a problem with implied consent. I would suggest an MPs’ phone number for MPs to have implied consent.
- MARTIN WHITFIELD MP
EU funding has now drying up to help Local Authorities with homelessness and charities now has too much to do.
- THERESEA PEARCE MP
There are problems with joint tenants but single payments.