The fourth annual Welfare Reform survey from ARCH and the
National Federation of ALMOs (NFA) shows that households on
Universal Credit are still significantly more likely to have
housing debt than those on Housing Benefit and Universal Credit is
draining cash and resources from already hard-pressed councils and
their ALMOs.
The fourth annual ARCH/NFA Universal Credit survey "Patching the
net: Measuring the impact of Universal Credit on tenants and
landlords"shows that households on the new benefit are still
significantly more likely to have housing debt and they also owe
more.
But the figures would be even worse, suggests the data from 39
of England's councils and council-owned housing management ALMOs,
if local authorities weren't plugging the gaps with their own
staff, training, IT investment and cash.
Key findings from the survey include:
- 67% of households on Universal Credit have arrears owing around
seven weeks rent (£564). This compares with households on Housing
Benefit, where 21% of households have arrears owing 3 weeks
(£221).
- For tracked organisations, the total amount of their arrears
has risen by 13% from 34.4 million in 2017 to £39 million in 2019.
However, our members appear to be controlling the impact of
Universal Credit on individual households, with the percentage of
households in arrears dropping from 76% in 2017 to 66% in 2019.
Although the average amount owed is broadly unchanged.
- Local authorities and ALMOs have invested a huge amount of
time, money and staff into controlling the impact of Universal
Credit on tenants, and this is showing in the gradual reduction in
arrears. However, currently much of the work that is being done
consists of 'workarounds' and administrative, resource-heavy
processes. This is neither scalable nor cost effective as numbers
of households on UC grows.
Launching the report, the NFA's Policy Director Chloe Fletcher
said:
"Councils and their management companies have had to
innovate and come up with countless work-arounds to make sure rent
arrears don't escalate and tenants are able to keep their homes
when they move onto the new benefit system".
"This level of intense support from social landlords just
isn't sustainable as Universal Credit rolls out and the government
starts to move existing benefit claimants onto Universal
Credit."
"Council housing budgets are already under enough pressure
from the cuts in rental income imposed upon them by Government for
the past four years. We are calling for government to both improve
the way it administers Universal Credit and to fund social housing
organisations to provide the support tenants need during the
transition to Universal Credit"
Two council landlords estimated that Universal Credit had added
upwards of £200,000 each more to their housing management costs in
the previous 12 months. While others found it difficult to
disentangle precise Universal Credit costs from their routine
housing and social support work, most reported that they had taken
on extra staff or bought new IT systems to cope with the problems
cause by welfare changes.
Since the NFA-ARCH annual UC survey was first published in 2016,
it has become a trusted source of information about the impact of
welfare reform. Its evidence has played a critical role in a number
of recent changes to Universal Credit policy, including the removal
of the seven-day waiting period, the run-on of Housing Benefit, and
the development of the Landlord Portal which makes direct contact
with the Department of Works & Pensions (DWP) possible.
Commenting on the Report, The Chartered Institute of Housing's
Chief Executive Terrie Alafat CBE said:
"This report is timely, showing as it does that Universal
Credit as it stands isn't working as it needs to. Far from
supporting people into work, it is leaving some of the poorest
people having to choose between rent and food. And the burden is
falling on already hard-pressed councils and their not-for-profit
housing companies."
"These councils are doing great work, despite the obstacles
the system places in their way. It's time for the government to
review the impact of Universal Credit and this report indicates the
key issues to address as a start."
ARCH Chief Executive John Bibby commented:
"We have submitted copies of our latest report to Ministers
at the Department of Work and Pensions and look forward to
constructive dialogue with the Department to address the findings
of our survey and help ease the transition to Universal Credit for
council landlords and their tenants."
"ARCH and the NFA have been pleased to be involved in both
the DWP Strategic Social Landlords Group and the Universal Credit
stakeholder group looking at the Move to Universal Credit. Within
the report, we summarise members' concerns and suggestions around
improving the Landlord Portal, the APA process, and ensuring that
Move to Universal Credit is successful. We also highlight members'
concerns around the current plans for Universal Support."
The full report, "Patching the net: Measuring the impact of
Universal Credit on tenants and landlords" can be downloaded here.