The upheaval for customers moving on to Universal Credit is huge and, rightly, most attention is focused on their needs. But the changes have had a pretty substantial impact on housing associations too.
At County Durham Housing Group we have seen a link between Universal Credit claims and rent arrears.
But, we’ve also learned that by working intensively with tenants who are struggling, we can still limit the impact of UC on both them and the organisation.
I’m afraid we haven’t found a quick fix to the problems; everything we have achieved is down to old fashioned hard work and good contact with our customers.
We’ve got a strong Universal Credit Team, who are diligently on the phone to customers constantly looking to smooth the transition or help with information.
And we’ve got pretty robust processes too, with all of our staff who interact with tenants clear on how to help with rent arrears and UC problems.
We estimate that at any one time, around 4,500 of our tenants will have arrears of one shape or form.
Many of those will be minor or to do with payment cycles rather than any efforts to defer rent payments.
In the region of 3,000 tenants have longer-term rent arrears.
Again, many of those will have been due to genuine circumstances and a good proportion will have plans in place for the payment of their arrears.
But that means, when looked at against our total income, arrears sits at around 2%.
That sounds low, but for an organisation of our size it’s still a considerable figure.
In a not-for-profit housing provider, that reduction in rent doesn’t mean less profit; it means less money available to invest in supporting existing tenants or providing desperately needed homes for new ones.
So, any increase in rent arrears cannot simply be ignored.
The majority of our tenants pay their rent in full, on time, every time; whether directly or via Housing Benefit.
We’d hardly be looking after their interests if we allowed arrears to rise, so obviously we’re always looking to reduce outstanding debts.
Speaking to colleagues from other housing providers, it seems like pretty much everyone saw their rent arrears rise substantially when Universal Credit was rolled out in their area.
I can’t for a second pretend that there wasn’t a similar impact at County Durham Housing Group.
As an example, we receive something like £30,000 less per month in Housing Benefit payments alone, which used to come directly to us.
But, in one of the first areas in County Durham to move to Universal Credit, rent arrears are now down.
I don’t honestly think that’s down to the UC system, instead it’s down to some pretty dedicated work to help tenants and to make sure that everyone, internally and externally, understands the importance of paying their rent.
Our team of Universal Credit specialists, tenancy sustainment and income recovery experts have worked alongside neighbourhood-based teams to provide support and interventions at every turn.
The effort taken should not be underestimated.
We’ve provided one-to-one support to hundreds of tenants struggling with Universal Credit.
And for those more used to the traditional benefits system we’ve been hitting the phones heavily to make sure that they get into the swing of their new role in paying rent.
There have been some substantial successes for the team, and for our customers too of course.
One of our advisors helped a self-employed tenant appeal the amount they had been awarded through Universal Credit.
The ‘minimum income floor’ had been applied to their claim, leaving them with £200 to pay their rent and cover all their other living costs.
After a two-month long challenge by our Universal Credit Team, the tenant was awarded backdated payments.
In another case the team helped a tenant recover backdated Universal Credit housing cost payments that they were entitled to.
In both examples tenants were awarded more than £600 after the errors were corrected, but rent payments were also secured for the organisation as a result and arrears dealt with.
We’ve also focused a lot of attention on early intervention.
Naturally a substantial percentage of our starter tenants have moved to us due to a change in circumstances.
That also means that they’re very likely to have entered the Universal Credit system at the same time.
So, we’ve been putting extra work into our support for starter tenants.
We’re piloting new ways of helping tenants learn about budgeting and managing a home via online courses with a tangible qualification at the end.
We’re providing intensive support to new tenants in areas like affordable credit, furniture provision and opportunities for training.
The result is that in and around Durham city our rent arrears figures are now lower than they were before Universal Credit was introduced.
We’re now working hard to replicate that picture right across the county … and to maintain the positive picture in Durham.
There are big organisational challenges with the new process too.
Before Universal Credit came in, Housing Benefit meant that rent was paid directly to housing associations on the same day – most of us even calculated rent arrears around that date to get the most accurate figure possible.
That was all changed with UC and payments that came in on the day they are paid by tenants.
Even when Alternative Payment Arrangements (APAs) are put in place, they still come through on the date set up, not at a regimented time.
That’s had a direct impact for housing associations on how we measure arrears, and there have been various alternatives put in place across the sector.
With the potential of league tables for providers seriously on the horizon after the green paper on social housing last year, the need for a consistent measurement method for all housing associations is probably about to get more pressing.
As much as many would like to see an end to Universal Credit, it looks unlikely in the current climate.
As the impact of the rollout to ever more people grows, the knock-on results for housing providers is unlikely to diminish.
It’s undoubtedly going to mean more work for the sector in the long-term.
But, with a real focus and a good team, it doesn’t have to mean that rent arrears can only go up.