Halton Housing March 2018 Work and Pensions Select Committee Universal Credit Evidence Submission

Transcription

1 Halton Housing March 2018 Work and Pensions Select Committee Universal Credit Evidence Submission Dear Frank, WORK AND PENSIONS SELECT COMMITTEE UNIVERSAL CREDIT EVIDENCE SUBMISSION Building upon the evidence presented to the Select Committee Hearing on 23 rd January 2017 and our subsequent follow up letters and supporting information dated 25 th January 2017, 17 th March 2017, 17 th August 2017 and 12 th October 2017 respectively, Halton Housing welcomes the opportunity to make a further submission to update the Committee on the ongoing impact of Universal Credit (UC). We are acutely conscious of the vast amount of information the Committee has received from the submissions to date. In recognition of this, we have provided the latest in our series of at a glance summary infographics. These seek to capture the key issues and how these could potentially be resolved and is included as an appendix to this submission. Background As a brief reminder, the Full UC Service has been introduced across Halton since 27 th July Prior to this the Live Service had been operating since November We have tried to avoid any repetition from our earlier submission. Instead we have focused on providing an update on the general position of Halton Housing since our last submission and in response to the questions posed by the Committee. Since our last submission, the Department for Work and Pensions (DWP) has made some welcome changes. These have included the introduction of the free phone, the ending of the sevenday waiting period and the transitional payment of housing benefit for UC claimants. Landlord Portal We have recently been advised that Halton Housing will be added to the Landlord Portal with effect from the end of April Whilst we welcome our

2 admission to the Portal, this will only be for new claimants or those who experience a change in circumstances. This will result in not being able to access the details for our existing 1,500 full service UC cases. As we have not previously had access to the Portal, we are unable to comment from first-hand experience. However, we are aware from our detailed discussions with others who do have access to the Portal that it speeds up tasks such as APA applications. Furthermore, rent verification is completed within a couple of clicks. As it is still in its early development, the Portal is currently restricted to: Listing UC full service cases where rent verification has been requested. Upon receipt of the request, the housing association completes the rent verification form electronically and returns to DWP via the portal (this is the form formerly known as SRS) Listing UC full tenants where electronic rent verification form completed and confirms the date completed and who by Electronic Alternative Payment Arrangement requests instead of completing APA s via , these are all completed and managed via the DWP portal There are no details available of the Housing Element. We are aware that DWP are seeking feedback from housing associations on what they would like to see developed in the Portal in future upgrades. Latest UC Position There has also been a welcome shift in the narrative and approach from the DWP. Like many of us in housing, DWP clearly recognise that only through a closer working relationship can we co-create the practical solutions. We would urge DWP to continue with this approach if we are to help shape the future direction of Universal Credit, to support those people living in our homes who are in the greatest need. But there is still a long way to go. Like many organisations and individuals, Halton Housing is supportive of the overarching principle of UC. At its basic level it addresses many of the criticisms of the previous legacy benefits system. This had resulted in a complicated myriad of benefits, where thousands of people didn t claim what they were entitled to.

3 Unfortunately, the overarching principles have been eroded, as reductions have been made to fund austerity measures. As the roll-out gathers momentum, what is clear is that the transition to UC is one of the single biggest risks most social housing landlords have faced for 30- plus years. At its most basic level it places at risk up to 65% of most landlords income. This was previously paid in the form of housing benefit every four weeks. Our own figures, as illustrated by our latest infographic in Appendix 1, show some of the key impacts. Within Halton, while just 24% of our customers are in receipt of UC, this accounts for more than 60% of all arrears. The impact of UC on arrears is significant. The increase in arrears directly attributable to UC is 277,000. The average balance of customers on UC is 409. The average balance of these customers before they were in receipt of Universal Credit was 225. This position is compounded by errors in processing, which have led to delays and costs with 15% of rent verifications being duplicated. Furthermore, every month 8% of payments made to Halton Housing have the wrong reference number. While some of the early problems have been addressed, it still remains that the average difference between balances now and before UC (the arrears tail ) is still significantly longer compared to housing benefit cases. After working within a UC landscape for the past two years, some of the key factors to explain why arrears are remaining higher than before include: The process of making claims leaving claimants without any money for five to six weeks (this has recently improved with changes to advanced payments) Cases with greater complexity of claims are now moving onto UC Inconsistent quality of budgeting/money management advice provided by the DWP Communication issues between the DWP, landlords and claimants (usually managed via the claimants online journal)

4 Another key impact to emerge has been the need to make an increased provision for bad debt within our Business Plan. This is due to higher arrears levels, coupled with a higher proportion of UC tenancies failing within the first 12 months. We are only at the tip of the iceberg. To date only 15% of all those who are to move to UC have done so. The remaining 85% are still to move across as part of a managed migration. This is three million households over the next three years. The key risk identified by Halton Housing was how we were going to maintain existing staffing levels and associated costs to collect what would be at the very best the same amount of money. This is what has underpinned our Digital First, self-serve approach. To help combat the effects of Welfare Reform on both customers and Halton Housing, we launched our Digital First Approach in April This has enabled us to provide more intensive tenancy support for those people whose tenancies under UC are now at increased risk. In our latest infographic at Appendix 2, we suggest three changes that would have a disproportionately positive impact. What is clear is that further tweaks and fine-tuning adjustments are going to be needed if we are to make UC work. Our estimate is that this will take another two years. A number of the issues are similar to when housing benefit payments direct to landlords were first introduced 20-plus years ago. I hope the additional information contained within this letter is helpful to the Committee. Should you require any additional information please do not hesitate to contact me direct. Very best wishes.

5 Yours sincerely Nick Atkin Group Chief Executive Enc. UC Summary Infographic

6 Appendix 1: Impact of UC Summary Infographic

7 Appendix 2: How UC Could Be Made To Work Summary Infographic