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2019 ARCH/NFA Welfare Reform Survey results published 16/07/2019 Labelled as Scrutiny, Finance, Legislation, Tenants

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

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