4th January, 2014
The following article was published on 24 Dash.com.
Bill Irvine, of universal credit advice website www.ucadvice.co.uk, analyses the latest UC demonstration project findings.
The six demonstration projects (DPs), set up nearly 20 months ago, to help determine how best to manage ‘direct payments’ or ‘landlord managed payments’ have just published a joint report titled ‘Landlord Learning Document’ which highlights some of their key findings & conclusions, which they believe will help you prepare for the introduction of universal credit.
The document is 41 pages long, and cites each project’s individual experiences; producing examples of measures which they found worked best, improving performance and mitigating what could have been much more financially damaging results.
The report, supposedly independently produced, gave me the impression that we’re being given a somewhat sanitised account of what actually took place during the 16 months of study.
For example, in one of the projects, 40% of those initially identified in the sample failed to cooperate or participate, for various unexplained reasons; of the 1000 or so that did participate, 300 had to be ‘switched back’ – leaving only 40% of the original sample.
So the reported impressive rent collection result must surely be viewed with an element of scepticism if those 40% that did participate were really ‘volunteers’; presumably with the requisite bank accounts; with little or no history of rent arrears, multiple notices seeking possession, evictions etc.
Although each project was tasked slightly differently, they reached some common findings. Below you’ll find a few examples:
- Direct payment to tenants would not have worked without the close working relationship that existed between landlords and council revenue and benefits departments, facilitated by timely and appropriate information sharing.
- Prompt and meaningful liaison between landlords and the service administering benefits is essential in instances where the tenant does not pay their rent in order to safeguard the tenant and the landlord’s income stream.
- Managing direct payments (and the impact of welfare reform) is a whole organisation effort, so communication and training for internal stakeholders is the key to success. We have spent more to collect less: an increase in resources is needed to manage direct payments, especially during transition.
- Developing effective communications with customers and maximising contact opportunities (including flexible working) are essential steps to secure payment and identify personal or budgeting support needs.
- Handling rent collection and arrears effectively in the world of direct payments often requires the development of new or refined systems that identify and respond to non-payment straightaway to protect landlord income.
- Ensuring that a wide range of payment methods are available, including flexible use of direct debit dates, is crucial in maximising payment collection opportunities and minimise operating costs.
- Low take-up of support interventions provided by or arranged by landlords specifically to assist customers with personal or financial support suggest that tenants find it hard to discuss money. Interventions that initially take a more generic approach to tenancy support appear to be more successful in engaging people.
When you consider the amount of time and resources expended on these various projects, the outcomes are disappointing, as they simply confirm what most RSLs concluded from their own welfare reform reviews and mitigation planning.
Over the past two years, I’ve travelled all over the UK doing welfare reform mitigation training on behalf of CIH, and through my own UC Advice & Advocacy consultancy met with individual and groups of housing associations, who to their credit, had been working tirelessly in an attempt to address and respond to all the potentially damaging effects and consequences of the reforms.
Invariably, I found their analysis reached similar conclusions to those reported by projects. We didn’t need the injection of £millions of government subsidy to arrive at the conclusion:
“Our projects have proved beyond doubt that landlords’ ability to protect their income stream, support tenants to make the transition to direct payment and safeguard the most vulnerable all crucially hinge on effective and timely information exchange with the benefit administering authority (end of page 5).
I mean no offence to the DPs but this is hardly earth shattering news!
The projects also appear anxious to acknowledge the role played by the DWP and its apparent commitment to follow through on some of their findings, pointing to:
“We are pleased that DWP is reflecting the learning from the demonstration projects and as a result much has changed in the last two years from what was originally proposed, including:
- Decisions about whether tenants should receive direct payment will be made in collaboration with social landlords.
- If arrears build up to the equivalent of one month’s rent the decision to make direct payment will be reviewed
- If arrears reach two months’ rent payments will be switched back to the landlord.
“We look forward to these statements being developed well ahead of the large scale roll out of universal credit, including facilities for the meaningful sharing of information”
Undoubtedly, there has been considerable movement on the part of the DWP; especially in relation to “landlords‘ managed payments” (LMPs) my client bulletin http://www.ucadvice.co.uk/housing-associations/2013/11/dwp-pubish—landlords-managed-payments-of-uc-housing-elelment addresses this important development, very much welcomed by landlords across the board.
However, there’s much still to be done; especially on the critically important IT front and long overdue publication of the UC guidance which has been repeatedly promised but never delivered. There still remain many key questions to be answered and clarified.
CIH recently confirmed the DWP plan to create a LMPs template letter, in an attempt to improve communication between social landlords and the DWP.
The DWP has been roundly criticised by the pathfinder housing associations for its lack of cooperation; failure to respond to redirection requests; and lengthy turnaround times in relation to these LMP requests.
Interestingly, in an earlier exchange on the same topic, Inside Housing magazine labelled the same associations as “whinging”. See my bulletin http://www.ucadvice.co.uk/housing-associations/2013/10/social-landlord-whinging-in-pathfinders
Nearly three years ago, the Scottish Federation of Housing Associations and Your Property Network (Private Sector Housing magazine) published versions of my article “Hitting the DWP Brick Wall” http://www.ucadvice.co.uk/housing-associations/2014/02/hitting-the-dwp-brick-wall-1
I maintained then that the real “elephant in the room” as far as universal credit was concerned, was the DWP administration and predicted:
“Looking ahead to the government’s plans in respect of universal credit (UC) which is designed to effectively abolish HB/LHA as we know it, and replace it with a “housing element”, built into the UC proposed caps, all of which is to be administered by the same DWP, fills me with absolute dread for both tenants and landlords alike. Council administration, even with its faults, is a far better option than a DWP driven service operated from regional call centres by staff that are, by comparison, poorly trained, in receipt of minimum wages, de-motivated, and utilising systems and procedures geared more to impeding and frustrating than actually resolving problems”.
The mind-boggling events of the past year, concerning DWP and ministerial incompetence and less than frank statements to parliament have simply reinforced my belief, that the DWP administration will never be able to successfully deliver the coalition’s flagship policy and, in the process, will cause considerable chaos to landlords and tenants alike.
If you require further information on this or any other welfare reform issue write to me firstname.lastname@example.org Alternatively, if you’d like to find out more about www.ucadvice.co.uk and our range of services, please phone 07733 080 389.