Universal Credit is a disgrace, and those who have advocated it and continue to defend it should hang their heads in shame

At first there were warnings that the ambitious plans for Universal Credit were not deliverable. But the government dismissed these warnings. There were warnings that Universal Credit could not be delivered in the way it was planned, but Iain Duncan Smith said, time and time again, that it would be delivered “on time and in budget”. It wasn’t and an IT programme was abandoned at a cost of millions of Pounds.

Universal Credit pilots highlighted the rising levels of rent arrears and the hardship being caused to claimants, but the government pressed on regardless. I have written about Universal Credit on more occasions than I can recall, probably on more occasions than on any other social policy issue or government policy.

Advice agencies warned of the increasing numbers presenting themselves with increasing problems with debt, but these warnings fell on deaf ears in the Department for Work and Pensions and in government.

Landlords warned that they would not be able to accommodated those on Universal Credit, but still these warnings were not headed.

Social and private landlords have highlighted the problem of arrears caused by Universal Credit. BHT’s arrears currently stand at 1% other than for those on Universal Credit where arrears are 15% notwithstanding the work we do with our tenants.

Food banks have said that the increasing demands for their services are being caused by Universal Credit.

News reports, over months and years, have highlights individual cases of hardship and homelessness directly resulting from Universal Credit.

Time and time again, warning after warning, the government carried on regardless.

Last month Citizens Advice produced a compelling case for the roll out of University Credit to be paused but the usual platitudes were repeated.

Then today (29th September) came news that Conservative Members of Parliament have called on their own government to think again about Universal Credit over fears about the impact on claimants already receiving Universal Credit in trial areas.

Later in the day, Dame Louise Casey, who has advised successive governments on a wide range of social policy issues, said that pressing ahead with Universal Credit was like “jumping over a cliff” and that it made her “hair stand on end”.

If the government fails to act now it can only be because it and its ministers are deluded about their own righteousness, cruel in their disregard of evidence of suffering and hardship, or too arrogant to listen to those who see, on a daily basis, the impact of this policy.

This policy is a disgrace, and those who have advocated it and continue to defend it should hang their heads in shame.

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Another day, another report on the disaster that is Universal Credit

There is a new report out on the impact of Universal credit on rent arrears. But there is a difference with this one. It is not one of the ‘usual suspects’ – Shelter, Citizens Advice, BHT, etc. – warning the Department for Work and Pensions about the problems being caused by one aspect or another of Universal Credit. No, this one is from Ipsos Mori on behalf of the DWP itself.

It found that of those in arrears, in half the cases the arrears started after they had made their claim for Universal Credit.

Ipsos Mori said that 38% of renters on Universal Credit were in arrears eight weeks after making a claim. This fell to 31% five months after making the claim. 77% said this was the first time they had been arrears in their current accommodation.

When will the DWP finally admit that Universal Credit is an unmitigated failure, and when will they put a halt to this disastrous policy?

Should the roll out of Universal Credit continue at this time? Watch the evidence to Parliament’s Work and Pensions Committee

If you want to see reasoned, balanced and constructive discussions around Universal Credit, do watch the House of Commons Work and Pensions Committee hearing held last Wednesday (13th September 2017). My thanks to Peter Freeman for drawing my attention to this link.

One very interesting point related to the six to eight week delay before a claimant gets their first payment. The Department for Works and Pensions (DWP) says part of the rationale for Universal Credit is to prepare claimants for the reality of work so that they are ready to live on a budget. It was noted that no one starting work would expect to wait for six to eight weeks before being paid for the first time.

There is assistance available in certain circumstances, but a lack of information from the DWP means that few people know about advance payments. According to Citizens Advice, only 41% of their clients knew about advance payments.

I tried to find information about advance payments on the DWP website. I gave up. Fortunately, Citizens Advice has helpful information on its website regarding advance payments.

By the way, calls to the Universal Credit helpline number can cost up to 9p a minute from a landline, or between 8p and 40p a minute from a mobile. A claimant can ask the helpline to call them back. But if you have no money and no credit on your phone, how do you make the initial call?

It is always worth reading the Guardian’s Patrick Butler on social policy issues

Patrick Butler, from The Guardian, is always worth reading on any social policy issues. An example are these two extracts from his column in Friday’s Guardian (15th September 2017)

The work and pensions select committee has launched an inquiry into universal credit after hearing evidence from landlords, charities and tenants about extensive problems associated with it.

Frank Field, the committee chair, said: “Everything I have seen so far, on the committee and in my constituency, points to fundamental flaws in the operation of universal credit, which must be resolved before the full service roll-out proceeds.”

The Department for Work and Pensions evaluation found that 42% of all claimant families surveyed said the wait for a first universal credit payment to be processed and DWP administrative errors were the cause of their rent arrears.

Four in 10 households were in rent arrears eight weeks after the claim was made, with nearly one in three still in arrears four months later. One in five owed £1,000 or more. Four out of five said they had never been in arrears before.

Half of new claimants needed a DWP loan to help pay for living expenses such as food and gas bills while they waited for a first payment, while nearly one-third borrowed cash from family or friends. About one in 10 took out loans with payday or doorstep lenders.

Universal credit was introduced in 2013 to simplify the social security system by rolling six main benefits into one. However, management failings and IT problems have left it years behind schedule, while budget cuts mean millions of working families moving on to the benefit will be worse off.

Patrick explained the workings of universal Credit:

New universal credit claimants wait a minimum of 42 days for a first payment. This comprises a seven day “waiting period” before a claim can be made, a one-month assessment period to determine how much the claimant should be paid, and a further week for the payment to go through.

In practice, however, charities say many claimants wait even longer for a first payment. People on low incomes often have few or no savings to tide them over during the waiting period, forcing them to turn to debt and food banks.

The DWP has stood by the 42-day wait, arguing that it is needed to get claimants on to a monthly payment schedule, and newly unemployed claimants should expect to have one month’s salary to fall back on. However, charities say one in four workers are not paid monthly, meaning they have to survive for at least six weeks on two weeks’ pay.

Earlier this year, the Trussell Trust reported that food bank referral rates were running at more than double the national average in areas where universal credit had been rolled out. The trust said benefit delays led to debt, mental illness, rent arrears and eviction.

The unfolding disaster that is Universal Credit

My second favourite government department (not), the Department for Work and Pensions, has belatedly published a guidebook to help landlords prepare for the roll out of Universal Credit.

It is rather late in the day because Universal Credit has been rolled out in many parts of the country and is imminently going to arrive in full in Brighton and Hove.

I hope this belated gesture by the DWP is a recognition of the problems being caused by this ill-conceived and badly implemented policy. There was research over the summer that showed that 86% of council tenants in receipt of Universal Credit are now in arrears.

Rather than paying rent directly to tenants in a single, direct monthly payment as is happening under Universal Credit, the DWP could have agreed that the rental component should be paid direct to the landlord. Now that would be a sensible idea and would have reduced the risk of rent arrears. Wait a minute, that’s what has happened until now.  But some bright spark, somewhere in the DWP, who has probably never had a days experience collecting rent for a social or private landlord, thought that paying the rent to tenants rather than landlords would be a good idea.

At BHT we work closely with our tenants and support them to pay their rent.  Rent arrears as at 3rd September were 1.1%.  But amongst those on Universal Credit the level of arrears in just over 15% – in spite of the support we can provide.

Today (13th September 2017) the National Audit Office has said that the 60% increase since 2010/11 in households in temporary and emergency accommodation, and the 134% increase in rough sleeping has “likely been driven” by welfare reform.  The freeze on Local Housing Allowance is, according to the NAO, “likely to have contributed”.

Auditor General Sir Amyas Morse said the Department for Work and Pensions had failed to evaluate the impact of the benefit changes on homelessness.It is difficult to understand why the department persisted with its light touch approach in the face of such a visibly growing problem. Its recent performance in reducing homelessness therefore cannot be considered value for money.”

The consequence of this stupidity was easy for foresee, and experience has proven it to be the case.  Belatedly publishing a guidebook for landlords isn’t going to fix this problem.

(PS my least favourite government department is the Ministry of Justice also known as the Ministry of Injustice or MiniJustice).

Rough sleeping has doubled since 2010, predicted to increase by a further 76%

The stock response from government, local and national, when challenged about a current or impending problem, is to say how much money it is spending to resolve the matter.

This is true about the rough sleeping crisis. The number of people sleeping rough has doubled since 2010, according to a report in the Financial Times in January. And today (10th August 2017), the national charity, Crisis, has forecast that rough sleeping will rise by a further 76% by 2026. (This forecast is based on research conducted on behalf of Crisis by Heriot-Watt University).

A Department for Communities and Local Government spokesman said: “Alongside investing £550 million to 2020 to address the issue, we’re implementing the Homelessness Reduction Act, which will require councils to provide early support to people at risk of becoming homeless. There’s more to do and ministers will set out plans shortly.”

It is easy for someone to quote eye-watering sums but given the track record since 2010 we need something that will inspire confidence. The doubling in rough sleeping numbers is a direct result of government policies. I look forward to the government’s plans being published. The plans need to be more than worthy statements of intent.

The government’s plans need to be SMART. They need to set out specific measures that will be implemented, what difference these measures will make, and when the positive impact will be seen. A vague date like 2026 is no good. Most of the Ministers around today will not even be a footnote in history by 2026.

I would suggest, amongst other things, the following:

  • The appointment of a Minister for Rough Sleeping who will remain in her/his post until the next general election so they can be judged on their record
  • Properly fund local authorities to meet their homelessness duties
  • Reverse the drop in investment for affordable homes, specifically homes that will be made available to homeless households and individuals
  • Reverse the cuts to housing benefit
  • Reintroduce direct housing benefit payments to landlords to build confidence especially in the private rented sector
  • Put funding for homelessness services on a proper footing,

It should shame us all, not least those in power, that rough sleeping numbers have doubled since 2010. Today’s report from Crisis should shame government into urgent action.

Rent the empty homes of the rich and super rich in Kensington and Chelsea to people in housing need

Across the country, the number of homes left empty for six months or more is falling, down by a third between 20116 and 2016 across England and down by half in London over the same period.

The one area bucking this trend is Kensington and Chelsea, the Borough that includes Grenfell Tower.

Powers have existed since 2013 to allow councils to charge a premium of 50% on council tax for properties that have been left vacant for two years or more. According to the Guardian, a Band H property in Kensington and Chelsea, the surcharge would be £1,000 in 2017/18.

But for the rich and super rich of the Royal Borough of Kensington and Chelsea, to give it its proper name, £1,000 is small change when it comes to the increasing value of their asset (note: not home). In the ten years to October 2016, according to Land Registry data, the value of homes in the Borough has increased on average by £5,000 per month! What difference is £1,000 per year?

This is just another sign of how rotten the housing market has become in the country, and how rotten the ‘Royal Borough’ is.

I have two suggestions:

Why not give local councils the powers to acquisition properties left empty for more than 12 months for a minimum ten years so that they can be let to households in housing need, including those displaced by the tragic fire at Grenfell Tower.

Of course compensate the owners. I would suggest that the rents and compensation be capped at Local Housing Allowance levels (see footnote). The government is using that as the measure to cap specialist supported housing. Why use LHA. According to the DWP it is a suitable measure because “The one advantage of (LHA rates) is that they are already there, so it doesn’t cost government anything to set it up” (see my post Is this the most depressing, mind-boggling, ridiculous justification ever from government?).

The other suggestion I have is to strip the Rotten Borough of Kensington and Chelsea of its ‘Royal Borough’ status. Will that achieve anything? Absolutely not, but would make a lot of us feel a little bit better.

(Footnote: LHA was originally introduced to cap the amount of housing benefit that would be paid to welfare benefit claimants who rented in the private rented sector. The figure was supposed to equate to the 30th centile of rents for properties in a locality but it has been frozen for a number of years and now equates to the bottom 5 to 10 centile).