Homelessness and Universal Credit

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.

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  • David Warren 14th Nov '18 - 10:17am

    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?

  • Michael Bukola 14th Nov '18 - 10:49am

    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)

  • Lorenzo Cherin 14th Nov '18 - 1:00pm

    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.

  • Sue Sutherland 14th Nov '18 - 2:18pm

    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.

  • Dean Crofts 15th Nov '18 - 9:21pm

    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.

  • Dean Crofts 15th Nov '18 - 9:29pm

    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.

  • Lorenzo Cherin 16th Nov '18 - 8:10pm

    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.’


    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).

  • 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.

  • 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%.”


    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,

    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.

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