Holyrood challenges Westminster on Universal Credit rent arrears

But delegates at Housing Scotland 2019 get talk of “compassion” from DWP boss.

Holyrood 1

A direct challenge to Westminster over support for housing costs… impact of Universal Credit (UC) on rent arrears… significant risk posed by benefit devolution…

What Housing Scotland 2019 got from the DWP was talk of “compassion”.

Delegates at the SFHA annual conference in Glasgow were, at best, underwhelmed.

Speaker Margarita Morrison has been Area Director, DWP One Service Scotland for three months – but has 37 years’ experience in housing.

So a pledge to work with Scottish associations on issues over the benefit system was a given.

On a day that opened the Scottish Parliament’s Social Security Committee directly challenging Westminster’s Work and Pensions Secretary Amber Rudd over the future for UC – while releasing a report revealing damning evidence of the impact of the ‘reform’ on rent arrears in Scotland – Morrison stick to the script.

Not even the identification of “very significant fiscal risk” to Scotland’s public finances in the mass devolution of social security benefits next year moved that.

Morrison spoke of  consolidation for social security in Scotland as full-service UC kicked in – with monthly direct payments to landlords in place by the end of the year.

The reference to “compassion” came in Morrison’s assessment of what she had so far seen DWP staff do for claimants.

She threw out a challenge to the sector to “really have a think” about efforts toward those who needed more help – citing the capability assumptions made of claimants in the keenness to adopt IT-led initiatives in welfare administration.

Questions from the floor reflected the reception the address received.

Talk beyond was of Holyrood’s Social Security Committee going up against Amber Rudd with its evidence of UC having greatly increased rent arrears across Scotland.

As Morrison was speaking, the DWP received a letter from the committee urging a review of the Local Housing Allowance (LHA) so rates are increased as required to help tenants afford rents in the private rented sector.

Earlier this year, the committee launched an inquiry to explore how social security support for housing costs is impacted by welfare reform, with a particular focus on the local housing allowance and UC housing costs.

In its report, the committee stated it was “alarmed” by evidence which indicated rising rent arrears under UC.

Referring to a submission by Citizens Advice Scotland (CAS), the committee noted that CAS stated that in the last 18 months, their clients’ rent arrears issues were predominantly caused by them moving onto UC and experiencing problems with the delivery of support to pay the rent through the new benefit.

Evidence from Scotland’s CAB network, as well as from other stakeholders, suggested the incidence of rent arrears is far higher among tenants receiving UC.

The report referenced data from the Convention of Scottish Local Authorities (COSLA) outlining that mainstream rent arrears for four councils – East Lothian, Highland, East Dunbartonshire, and Midlothian – had increased by a total of 26% in the two-year period from March 2016.

Noting the Westminster government’s recent – if still to be assessed – changes to UC, the report said: “COSLA acknowledged that increased rent arrears could not be attributed solely to UC but pointed out that its data ‘generally shows sharp increases in the levels of rent arrears once local authority areas go onto the full service’.

In its recommendations, the committee wanted the DWP to pay the housing element of UC directly to landlords as a default, and a shortening of the minimum five-week delay for tenants receiving their first UC payment.

Among other concerns were:

  • The cost and condition of temporary accommodation – with a call for  housing benefit in that area to be devolved to address homelessness and rough sleeping
  • A widening gap between private sector rents and the amount provided by the social security system
  • The need for that “urgent review” of LHA

“Our inquiry highlighted a number of issues, including the frankly discriminatory shared accommodation rate which should be abolished immediately,” said Committee convener Bob Doris MSP.

“It is also clear that LHA rates are not fit for purpose and are failing to help claimants meet the rising cost of the private rented sector.

“We hope the DWP will take heed of the recommendations in this report and act swiftly to change the system, to help reduce arrears and ensure that our most vulnerable in society can pay their rent,” he said.

As reported by 24housing, the conference was held against a background of “very significant fiscal risk” to Scotland’s public finances identified in the mass devolution of social security benefits next year.

Latest forecasts from the Scottish Fiscal Commission see the devolution of an estimated £3.5bn in welfare expenditure as one of the biggest risks to Scottish public finances.

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