Panorama this week revealed large numbers of social housing tenants on Universal Credit owe more than double in rent arrears on average than benefit claimants on the legacy Housing Benefit scheme.
The new benefits scheme is sending many council tenant’s rent arrears spiralling. Research conducted by the show revealed that across much of the UK, Universal Credit (UC) claimants owe local authorities an average of £662.56, compared with £262
.50 on the Housing Benefit scheme…
Universal Credit was rolled out in Flintshire, North Wales in April 2017. UC claimants there owe the council an average of £1,424, six times the amount owed by those on Housing Benefit. Housing Benefit used to be paid straight to the landlord, but UC is paid straight to the claimant.
Stephen Lloyd, Libdem shadow spokesman for the Department of Work and Pensions said “The design flaws in UC include a minimum six-week waiting time for first payment that is forcing many vulnerable people into debt, a Kafkaesque user interface, and the termination of housing benefit payments directly to landlords – in the name of financial responsibility, tenants now have to pay the rent themselves – that has sent arrears soaring.” Universal Credit is an attack on aspiration
Leading homelessness charities, while supporting the principles behind universal Credit have made two key recommendations to address the problems of those at the risk of homelessness Homelessness and Universal Credit
1. A money management package, including exemption from the seven day waiting period, should be developed for individuals identified as homeless or at risk of homelessness at the beginning of a Universal Credit claim. This should include a realistic financial offer to support people through the assessment period and enable them to manage their finances going forward, without falling into debt. In addition to removing the seven day waiting period from people who are homeless, it should allow better access to reformed advance payments. Advanced payments should become more generous, and their punitive re-payment terms altered to ensure that they can be paid back over at least 12 months in every case.
2. All individuals identified as homeless should be granted Alternative Payment Arrangements (APAs), as standard, from the beginning of their claim. They should automatically be given more frequent payments and, in the case of individuals who receive the housing element of Universal Credit, rent payments direct to their landlord. These APAs should be reviewed regularly and should not be removed without a consultation with the claimant.
Common sense has to breakout at some point. The most vulnerable people in society are being continually sanctioned for an inability to engage online with a complex administration process or to wait on hold on for an hour or more for an under-serviced call centre to pick-up the phone only to direct them back to a website.
We have the ludicrous situation where council tenants and private sector tenants are being made homeless due to a refusal by central government to make housing benefit payments directly to local authorities and private landlord ’s. Once homeless the local authority then has a duty to house them in expensive temporary accommodation.
* Joe is a member of Hounslow Liberal Democrats and Chair of ALTER.
Follow @libdemvoice.org on Bluesky
Like us on Facebook
Subscribe to our feed
Sign-up for our daily email digest
The Joy of Six 1528
Endometriosis and acetylation
Reform makes first gain from Conservatives in this by-election cycle
How Chancellor Reeves torpedoed the economy
Michael Meadowcroft: A Liberal of Intellectual Rigour and Uncommon Integrity
Iain Donaldson
Jennie
Simon
Geoff Reid
Peter Martin
24 Comments
Excellent article Joe Bourke.
I didn’t see the Panorama programme but I did see a report on Channel Four News which dealt with similar issues.
Apart from all the problems highlighting with UC I would also like to see a debate started on the level of benefit paid.
Even if you get any money it is simply not enough to exist on let alone live on.
Can Liberal Democrats call for an increase?
Southwark Council were used as a pilot for UC in London produced their report 12 months ago which uncovered similar issues to the ones revealed on the Panorama. (Link: https://www.southwark.gov.uk/news/2017/oct/safe-as-houses)
Joe this is good, but the issue is not the payment to the landlord ,it is the delay.
Payment to the landlord or to the tenant was as it used to be and should be. It is responsible to pay oneself, and irresponsible that some private landlords used to be trying a fraud, by asking for more than the rent, a scam, exposed.
We need to allow either or as was, because a dodgy landlord can then be subordinate to a responsible tenant. We do not want the alternative to be only payment to a landlord, as this removes power, such as when to pay them, from the tenant, aswell as the withholding or delaying of paying them if they are not repairing or making good on serious issues in a property.
My wife and I, years ago, after the car accident that effected much of our situation and finances, and our careers, were exploited by a landlord, and had the housing benefit been paid to them only, we would have been exploited further.
We need the delays sorted overnight. A new emergency fund needs to be released at national for local level. And we and all who oppose the exploitation of the small, by the big, need to criticise staff, not merely government, too much pandering to pub;ic sector little bully types, safe in their jobs, lording their power over vulnerable claimants at all stages. I have been a seminar leader and adviser to unemployed people as well , as described, a claimant in the past, the system is full of terrible, inadequate unprofessionalism.
Great article Joe Bourke but I disagree with one of your statements. I don’t see any evidence that common sense has to break out because in my opinion it’s gone flying away with the pigs.
Speaking as a housing solicitor who has done duty desk at several courts in South West/Wales since this policy commenced: time and again, we hear people have been asking for direct payments to landlord, stating they feel they wouldnt be able to keep up with payments and dont want the temptation. That would be their choice, and they are often told no. This can then snowball, since given that such things as food, or almost any other essential you care to mention, don’t seem to conveniently accept five weeks delays in payments, people run up other debts, and have to rob Peter to pay Paul when some money does finally come in. The rent is hard to consider if you’re hungry now.
Whilst the government might champion individual payments, bizarrely, as default as (classic) liberal policy and giving more independence and empowerment to claimants: I would advocate that in many circumstances this leads to oppression, firstly of choice, and then of poverty.
Which doesnt sound very liberal at all when we think about it.
Mike Norman,
I think that’s the nub of it. You only have to look at the level of activity in the payday loan industry to see how difficult it is for so many to manage cash flow even with a regular monthly salary. To expect those reliant on the safety net of welfare benefits to fare any better is wholly unrealistic. With punitive sanctions imposed for missed or late appointments at the jobcentre, the stress and worry created for people in already difficult circumstances becomes intolerable. As you say, there is nothing Liberal about thar.
Rent arrears will double under UC, as most housing associations still have weekly due payments, and arrears accrue weekly and have not switched to monthly rent payment amounts. If they switched to monthly rental due, then arrears would not increase only once a month not every week.
Also housing benefit was paid every 2 weeks in arrears, UC is paid monthly, every 4.33 weeks in arrears, therefore its obvious that rent arrears will double as claimants are having to wait longer to receive their rent.
Or am I missing something.
This article is also out of date, there is no longer a seven day waiting period for UC – but it does take 5-6 weeks to get your first payment.
A “money management package” already exists its called Personal Budgeting support which is offered to every claimant at the time of claim – it’s not funded properly though by central government.
Individuals already get a 2 week run one of housing benefit payments when going to UC, and then a full months rent minus any dreaded bedroom tax dedutions – 3 – 4 weeks later. APA can be requested at claim if you are in rent arrears at start of claim.
Lets focus on the issues to resolve the problem , higher work allowances as per pre 2015 and lets get rid of advance payments and give claimants their first payment 7 days after claim, and get rid of the 2 week run on of housing benefit – that will solve the start up and waiting periods of UC,
When surveyed claimants on UC like it after first payment received due to it’s flexibility. It does not pay enough for those who are disabled or cannot work though.
Lib Dems, who claim to be champions for mental health, should pause for thought about a report published today :
The Guardian 15 November, 2018 “Universal credit linked to suicide risk”, says study by Newcastle University.
The Executive Summary :
1. “Claiming Universal Credit is complicated, difficult and demeaning. Participants described a labyrinthine, dysfunctional UC system prone to administrative errors, experienced as impersonal, hostile, punitive and difficult to navigate. The requirement to online was problematic for many participants. Digital literacy, lack of computer access, bank account and / or email address and verifying identification online added difficulties.
2. Waiting for payment of between 5-12 weeks (on average 7.5 weeks) pushed many into debt, rent arrears and serious hardship, including going without food and utilities. Few were offered alternative payment arrangements, which should be made available to vulnerable people.
3. Non-judgemental individually tailored advice and support by DWP staff was appreciated where this occurred, but was not always apparent. Staff supporting UC claimants described inconsistent and inaccurate advice from UC helpline staff, and difficulties correcting mistakes. The arbitrary nature of UC decision making led to frustrations and concerns for claimants ahead of managed migration. Fears were expressed about the two child limit for larger families.
4. Significant workload pressures and additional costs were described for voluntary and community sector (VCS) organisations, local government and wider health and social care system as a result of UC.
5. The study concludes that UC is not working for vulnerable claimants and significantly adds to the workload of staff supporting claimants. UC does not achieve the aims of simplifying the benefit system and improving work incentives. UC adversely affected claimant’s financial security, physical and mental health, social and family lives and employment prospects. Managing the UC claims process and increased conditionality, combined with the threat of sanctions, exacerbated long term health conditions and impacted so negatively on participant’s mental health that some had considered suicide. The impact of UC on the workloads of VCS and local government staff is substantial, and it is likely that the health and social care sectors are also significantly affected, although this has yet to be examined.
@ Joe Bourke Stephen Lloyd’s criticism of Universal Credit on homelessness illustrates Liberal Democrat difficulties. The issues should have been picked up during scrutiny of the Bill. ‘They Work for You’ illustrates Mr Lloyd’s voting responsibility :
• 9 Mar 2011 :voted to introduce Universal Credit and Personal Independence Payments and to restrict housing benefit for those in social housing deemed to have excess bedrooms.
• 13 Jun 2011: voted against introducing a childcare element to Universal Credit.
• 15 Jun 2011: voted to introduce Universal Credit and Personal Independence Payments and to restrict housing benefit for those in social housing deemed to have excess bedrooms.
• 31 Jan 2012: voted to move from a national council tax benefit to a system of local councils administering council tax reductions for those in financial need.
• 1 Feb 2012: voted not to increase the time people can receive contribution based ESA from one year to at least 730 days…
• Voted not to make an exception for those with a cancer diagnosis or undergoing cancer treatment from the 365 day limit on receiving contribution based Employment and Support Allowance.Show vote
• Voted not to exclude child benefit from the benefit cap.
• Voted not to set the lower rate of the Universal Credit payment in relation to disabled children and young people at a minimum of two-thirds of the higher rate.
• On 21 Feb 2012: voted not to add proposed exclusions from a reduction in housing benefits due to being deemed to have excess bedrooms.
• On 21 Nov 2012: voted to cap the total amount of welfare benefits an individual can claim from April 2013 at £350 for a single person and £500 for couple per week.
• On 8 Jan 2013: voted to cap any increase discretionary working age benefits and tax credits at 1% in 2014-15 and 2015-16
• On 21 Jan 2013:voted to set the rate of increase of certain benefits, payments and tax credits at 1% rather than in line with prices at 2.2% for 2014 and 2015
• Voted to cap any increase in specified benefits payments and tax credits at 1% rather allow them to be increased by 2.2% in line with prices.
• On 27 Feb 2013: voted in favour of a housing benefit under-occupancy penalty.
• On 11 Feb 2014: voted not to halt further spending and welfare cuts and not to investigate the impact of austerity measures on the incidence of poverty and inequality.
Difficult now to find a convincing narrative.
David Raw,
Stephen Lloyd has recently written about Universal credit https://www.huffingtonpost.co.uk/entry/universal-credit_uk_5b9939f6e4b0cf7b0045b37c?ccl&guccounter=1
“… at its heart (UC) was the fundamental principle of making work pay. There were concerns around other elements but the UC’s original focus on employment, described by the OECD as being better than a basic income, as it “would consistently improve work incentives” was a clincher for me.
….crucial part of this incentive was the Work Allowance. This is the maximum amount a UC claimant can earn through employment, before their benefit payments are reduced. However in the Summer 2015 budget, with the Lib Dems no longer in Government and unable to keep the Tories in check, the then Chancellor George Osborne tore the Work Allowance to shreds – to the tune of £3billion a year.
… the core aim of UC to encourage people off benefits into paid work – by allowing them to retain enough of their benefits so that it makes sense to work – has disappeared. The Coalition objective of introducing a policy which would break, once and for all, the cycle of welfare dependency and poverty was destroyed at a stroke. If we were still in government, Liberal Democrats would never have allowed such a crass, short-sighted decision to be taken, which in effect actually punishes the poorest for getting a job. This isn’t just bad policy, it’s downright stupid.”
Stephen Lloyd submitted an Early Day Motion to Parliament on September 6 of this year “That this House notes that one of the founding principles of universal credit was to make work pay; and therefore calls on the Government to return to this original principle by restoring the work allowance element to its original level, before funding for it was cut by around £3 billion a year in the 2015 Summer Budget.”
The budget last month restored £1.7 billion of the Osborne cuts to the work allowance.
The Resolution Foundation welcomed the work allowance boost, saying the £1,000 threshold increase would deliver a £630 boost to low-income families, meaning universal credit was now more generous than the benefit system it was replacing and saying “While today’s reforms certainly won’t end all the problems some recipients have faced with universal credit, they should ease the rollout in the months and years ahead.”
Sorting out Universal Credit falls to Amber Rudd now. The new Work and Pensions Secretary said she had seen Universal Credit – “do some fantastic things”.
“In my constituency in Hastings and Rye it really has transformed lives,” she said.
“But I also recognise that there have been some issues with it, some problems with it.
“I see it very much as my job, my role, to make sure that I try to iron out those difficulties so it becomes a force wholly for good.”
Let’s see if the extra budget money for the work allowance and a new minister on the job makes a difference.to those at a risk of homelessness.
Well I’m sorry, Joe, it wont wash. “Making work pay” is more than doubtful – and the impact of UC is punitive in method and outcomes.
Presumably “making work pay” includes voting for the bedroom tax, refusing a child care element, no exception for cancer sufferers, not to exclude child benefit from the cap, no concessions for disabled children and voting to limit the increase to 1% when inflation was 2.2% – not to mention the impact of single payment where domestic violence is involved.
And it’s not just me saying it. According to a United Nations report today, “UK austerity has inflicted ‘great misery’ on citizens, the UN. Poverty envoy says callous policies driven by political desire for social re-engineering. “• ‘I’m scared to eat sometimes’ • Women reveal impact of cuts • Children tell UN: ‘It’s unfair’ ” (The Guardian, and national TV today)
In my county UC was introduced nearly two years ago. My local Foodbank fed 329 people last month – a third children. 30% due to benefit changes, 24% due to low income (WORKING), 22% due to a refused crisis grant.
I’m afraid I’m not prepared to put a gloss on things about UC because of a long established party political loyalty. As for Amber, “Well, she would say that wouldn’t she”. As for Mr Lloyd………… just look at the voting record on cancer, disability and the 1% – 2.2% cut.
David Raw
That is a particularly helpful and admirable contribution, with real thanks to you. Please see my comments, above, I have see both sides and suffered. It is worse than you write this situation. The UN rapporter report scathing.
David one aspect has not been alluded to. Please take this in. With tax credits there is, for the self employed, a top up for people who try this route, with disabilities. The universal credit does not have it. It means losing two hundred pounds per month immediately moving from one to the other. I am of a mind to contact Penny Mordaunt, she dealing now with disabilities, and now Amber Rudd, work and pensions. I cannot believe Ian Duncan Smith meant this as disliked though he was and should now be, he did want it to mean work pays, it does not if self employed and with little earnings, tax credits were better way back, I know, I saw it from both claimant, and then adviser.
While many Lib Dem MP’s did tag along with the Tories not all did. Some retain a moral compass
On the day of his funeral, we were driving up to Fort William from Glasgow airport listening to the tributes across Good Morning Scotland. A constituent recalled asking him whether he intended to support or oppose the bedroom tax, and Charles saying he would oppose it. His reasoning was very simple. ‘It’s just wrong.’
https://alastaircampbell.org/2018/11/charles-kennedy-memorial-lecture-on-friendship-mental-health-addiction-and-what-he-would-have-made-of-the-brexit-fiasco/
It is unfortunate Charles Kennedy wasn’t listened too, for even drunk he was a far better politician than any of those that followed him (and it goes without saying a much better man than most of us can claim to be).
To be frank, Congressman Cherin, I’m getting pretty fed up with people putting a gloss on things and pretending that a cruel disaster (UC) is really a triumph that can be tweaked and tinkered better (also see my post re the ALDC results).
To re-phrase the old cliche about truth being the first casualty of war, I’ve come to the conclusion that truth is the first casualty of politics. It used to be a proud boast of the old Liberal Party that we told the truth…… I can no longer say that these days.
I was particularly shocked by the attitude in debate shown towards a female colleague by one of our peers yesterday when I watched the Lords on TV about an item currently all over the newspapers – but not even whispered about on LDV. All the old problems on a similar matter some years ago seem to have another parallel. I remember Ruth Bright, justifiably, getting very angry about it
It’s no good ‘Demanding Better’ if this party has a flexible attitude to truth about its own policies, record, representatives and results. As they say where I come from…… people aren’t daft.
David Raw,
I think it is clear to most that making work pay in the context of welfare reform means eliminating the very high disincentives to taking on work when a high withdrawal rate is applied – this is the case with both the legacy benefits system and UC.
As I am sure you know, Libdem policy recognises it is more effective to tackle the causes of the benefits bill – low pay, high rents, unemployment and ill-health.
That’s why policy seeks to reverse reductions for support for younger people or cutting the benefits of people not fit for work and reinstating the legally binding poverty targets of the Child Poverty Act.
Manifesto commitments include:
Uprating working-age benefits at least in line with inflation.
Abandoning the two-child policy on family benefits.
Help for young people in need by reversing cuts to housing benefit for 18-21-year-olds and increasing the rates of Job Seeker’s Allowance and Universal Credit for those aged 18-24 at the same rate as minimum wages.
Reversing cuts to Employment Support Allowance to those in the Work-related Activity Group.
Increasing Local Housing Allowance in line with average rents in an area, ensuring that LHA is enough for a family to pay their housing costs no matter where they live.
Scrapping the ‘bedroom tax’, while seeking to achieve the aim of making best use of the housing supply through incentivising local authorities to help tenants ‘downsize’.
Scrapping the Work Capability Assessment and replacing it with a new system, run by local authorities according to national rules, including a ‘real world’ test that is based on the local labour market.
Arguing for these changes and further improvements to the welfare system in Parliament is what Libdem MPs and Peers can do.
Thanks for the lengthy response, Joe. A pity they couldn’t do any of that during the scrutiny of the legislation when they were in government.
To adopt your phrase, “It’s clear to most” that paper policies don’t produce many meals in a food bank. In the real world most people tend to judge by actions not words.
The Guardian today : The United Nations Report s :
The UK government has inflicted “great misery” on its people with “punitive, mean-spirited, and often callous” austerity policies driven by a political desire to undertake social re-engineering rather than economic necessity, the United Nations poverty envoy has found.
Philip Alston, the UN’s rapporteur on extreme poverty and human rights, ended a two-week fact-finding mission to the UK with a stinging declaration that levels of child poverty were “not just a disgrace, but a social calamity and an economic disaster”, even though the UK is the world’s fifth largest economy,
About 14 million people, a fifth of the population, live in poverty and 1.5 million are destitute, being unable to afford basic essentials, he said, citing figures from the Institute for Fiscal Studies and the Joseph Rowntree Foundation. He highlighted predictions that child poverty could rise by 7% between 2015 and 2022, possibly up to a rate of 40%.
“It is patently unjust and contrary to British values that so many people are living in poverty,” he said, adding that compassion had been abandoned during almost a decade of austerity policies that had been so profound that key elements of the postwar social contract, devised by William Beveridge more than 70 years ago, had been swept away.
In an excoriating 24-page report, which will be presented to the UN human rights council in Geneva next year, the eminent human rights lawyer said that in the UK “poverty is a political choice”
The UN poverty envoy, along with his criticisms of the implementation of Universal Credit does also say in the report: “in its initial conception it represented a potentially major improvement in the system… Consolidating six different benefits into one makes good sense, in principle… There are undoubtedly many people who have benefited from the Universal Credit system.”
Given the money was taken out of UC after the coalition, criticising Lib Dem MPs is a little harsh. And certainly putting the money back in would be a considerable improvement.
There is a discussion of the statistics on poverty https://fullfact.org/economy/poverty-uk-guide-facts-and-figures/ and it is a little difficult to read as the data is in graphs but in general it shows less poverty under the Coalition than under Labour – and remember they didn’t leave us any money.
The ONS does say: “Of the 28 EU countries, the UK had the fifth lowest rate of PERSISTENT poverty (7.3%) – but also “the 13th highest poverty rate of 16.7%, near the EU average of 17.3%.”
https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/articles/persistentpovertyintheukandeu/2015
I would say that we were too harsh on benefit during the coalition but also that Labour were.
Personally I would have a more generous benefit system but equally taxation to pay for benefits is a drag on the economy and that hurts the poorer as well.
David Raw,
the report of UN rapporteur on poverty in the UK is a damning one and should be a call to arms to address the fundamental issues. LibDem policy rightly in my view focuses on the underlying issues – low pay, high rents, unemployment and ill-health.
I have heard Stephen Lloyd speak on these issues on a number of occasions and I understand where he is coming from. It is a conviction that the route out of poverty is regular employment and that given the opportunity the great majority of people would much rather the opportunity to provide for themselves rather than be dependent on state welfare.
It is this fundamental belief in equality of opportunity and a rejection of the utopian dreams of equality of outcomes based on state control of private enterprise or aspiration crushing levels of taxation that serve only to make everyone poorer. For all its inherent inequalities, it is capitalism that has dragged billions across the globe out of wretched poverty or the servitude of communist states.
The immediate issues in my view are making Universal credit work as it was intended i.e. as a safety net and not as a substitute for addressing the underlying causes of poverty. That requires restoring funding for the program to an adequate level such that benefit withdrawal does not disincentivise pursuing employment opportunities and ensuring that local job centres have the discretion and authority to deliver help quickly where it is needed including making rent payments direct to local authorities or private Landlords and making advance payments for subsistence as necessary.
Going forward, I don’t think persistent poverty can be tackled without addressing the issue of Land and rents. This is not something that Beveridge tackled, it was left to the post-war Newtown and public housing building program that drew to a close in the late sixties/early seventies.
We do have an inadequate welfare system now and we need to keep arguing for the measures needed to fix it. There will never be equality of outcomes but there is no need, and never has been a need, for large numbers of UK citizens to find themselves in a position of destitution.
@ Joseph Bourke I’m afraid Mr Lloyd’s position has too many echoes of a Teresa May PMQ despatch box cliche for my taste.
You don’t respond to his UC voting on cancer sufferers, the disabled, child benefit, single payments, the bedroom tax and reducing the value of payments below the inflation rate at that time.
I, too, understand where he is coming from. I simply don’t agree with it.
David Raw,
I would not presume to speak for an MP or why having considered the arguments he or she chooses to vote one way or the other. This is particularly the case in respect of disability benefits when the MP in question was selected under an all-disabled shortlist, the first time any political party had restricted its selection to disabled people.
Returning to the issue of benefits, this Guardian article https://www.theguardian.com/housing-network/2012/nov/22/beveridge-problem-rent-welfare-reform explains why 70 years on from Beveridge, the problem of rent still bedevils all efforts.
Polly Toynbee on the 75th anniversary of the Beveridge report examines the same issues https://www.theguardian.com/commentisfree/2018/feb/26/welfare-system-beveridge-75-years :
“There are never easy answers: we get the welfare state we pay for. Hypothecate all NHS costs into a replacement for NI? That, too, would soon become bogus, and removing the most popular item from income tax might erode willingness to pay it. Land value tax? Yes, but that’s just one mechanism already abused by the Mail as a “garden tax”: the key issue is how to tax property wealth. Make the old pay fairly for social care? The 2010 Labour manifesto’s good plan for a lump sum paid on retirement was blasted away as a “death tax”. The Tory 2017 manifesto plan was dubbed a “dementia tax”. The great question is how to persuade a tax-phobic country that we pay too little, especially on wealth. But to raise enough for basic income, to borrow Bertolt Brecht’s irony, you need to elect a new set of people as taxpayers first.”
Until we solve the problem of rents as identified by Beveridge we will keep going round in circles on welfare reform and efforts to address inequality.
Ref Mike Norman above:
Mike seems to be confused – he’s right in terms of classic liberalism involving “empowerment” by allowing claimants to manage their rent benefits but what he omits is RESPONSIBILITY. For decades, the concept of responsibility has been eroded with the growth of the welfare state and responsibility is exactly what is required by claimants when handed benefits.
The idea that the government is “oppressing” the claimants by giving them the responsibility of managing their money is laughable. Is a father oppressed by his wife for the responsibility of providing for their child?
In reality of course there is no choice between food and rent. There are plenty of food banks available. Other charities such as churches also provide food. Then there is the ultimate solution to poverty. Getting a job.