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A new report released by Citizens Advice Scotland (CAS) has blamed the UK government’s welfare reforms for a rise in clients seeking help for rent arrears on. The report comes the day after the government whipped their MPs to block the release of papers showing how Universal Credit will impact families.
The report starts by saying that in Scotland, the agency has seen a 40% rise in clients seeking assistance for rent arrears. Before you can even get into the report their findings are listed, and it doesn’t make comfortable reading for the government in Westminster.
The first and possibly most damning finding for the Tories says;
“The considerable growth in rent arrears as an area of advice has coincided closely with changes to the social security system, particularly the advent of UK Government welfare reform since 2010.”
Just yesterday, in the House of Commons we heard Tory MP’s praising their flagship reform whilst accusing Labour, Liberal Democrat and SNP politicians of “scaremongering.” Esther McVey also accused left wing news sites and social media of spreading fake news. Even if you take away the so-called “fake news”, you’re still left with reports from internationally respected organisations like The Resolution Foundation or The National Audit Office (NAO).
Rent Arrears Advice up 40% since 2012
“Between 2012 and 2017, issues related to rent arrears have been some of the fastest growing areas of advice in Scottish citizens advice bureaux.”
This is how the report starts and it doesn’t get any better. The agency’s statistics show that advice relating to eviction due to rent arrears, is rose in 2016/17 across all forms of rented accommodation compared to 2015/16.
But what did they find was the main reason for this worrying rise? Well you can probably guess, but it was “benefits-related issues.”
As you can see just under two-fifths of people contacting Citizens Advice in Scotland for rent arrears advice were doing so because of issues related to their benefits. I want to make sure and say, this doesn’t only include Universal Credit but could include others such as; Jobseekers Allowance (JSA), Income Support (IS) or Tax Credits.
Welfare reform takes much of the blame
Citizens Advice Scotland on the other hand lay the blame squarely at the feet of Universal Credit and other government welfare reforms such as the benefit cap.
“There is an in-built delay between making a Universal Credit claim and receiving a first payment due to the way it is designed…….. CAB clients have experienced rent arrears due in part to the length of the period before the first payment.”
They weren’t finished with Universal Credit yet either. They then went on to blast the administration of the new benefit system for causing significant issues. Much of the administrative issues they found, were related to the housing payments that should be included as part of Universal Credit.
The reported cases such as first payments arriving with no housing payments included or housing costs being deducted from the claimant and not paid directly to their landlord.
Here is an example case CAS highlighted in their report;
“A West of Scotland CAB reports of a client who has received a call from his local authority landlord stating that he has rent arrears of £641. The client was aware of some arrears, but it seems that his direct housing payment from Universal Credit was not made to the council despite being deducted from his UC award, so his arrears have increased by £309. When the CAB adviser contacted the local authority housing team they advised that this is “a
common problem” and there are lengthy delays with the local authority receiving the payments from DWP.”
Temporary Accomodation Issues
Another issue raised that you don’t hear often is that rarely does Universal Credit cover the cost of temporary accommodation (TA). From experience I know that TA is extremely expensive. In the Highlands this is because all temporary accommodation is either a Bed and Breakfast of Hostel. They charge the council the full cost as if it were a regular customer.
This cost is then passed on to the tenant as well as an electricity cost and sometimes a service charge.
In 2016, a single person staying in homeless temporary accommodation in the Highland Council area would be expected to pay at least £196 per week rent plus £8 for electricity. After that you obviously have food, (there’s usually only a kettle so it’s cheap anyway), clothes and travel.
If you were working you had to pay that yourself, if not the DWP covered the rent part if you were on legacy benefits. Now it seems this isn’t happening with Universal Credit claimants leaving them open to crippling arrears and possible homelessness.
Unpredictable Income and Universal Credit
The report lists “Unpredictable Income” as one of the factors leading to rent arrears. It points out that this is “often related to zero hours contracts.” Universal Credit is definitely not designed for people on what the government call; “flexible hours.” This is despite Tory MPs praising them.
The issue that arises here is due to the benefits calculation period. If you are paid at just the wrong time of the month or there’s a five week month you are often left with little to no benefit payment at all. While you are paid the next month you have already accrued rent arrears. Catching back up before it happens again becomes a constant battle.
“Address Universal Credit Issues”
That’s the main take away recommendation by the agency. They believe “at the very least,” the problems need to be fixed before the Department for Work and Pensions (DWP) begin to move over the remaining claimants on legacy benefits in what is called “managed migration.” I suspect that due to the news only emerging yesterday, they were unaware that this has now been pushed back and won’t be complete until 2023.
There are so many recommendations related to Universal Credit and Welfare Reform in general, that I simply cannot list them all so will summarise them as much as possible. If you’d like to see the full report there will be a link at the end of this article.
- Reduce the time claimants wait for their first benefit payment.
- The DWP takes all steps to ensure that the processing of Universal Credit claims are not delayed.
- The maximum permitted deduction rate from UC to repay debts should be reduced from the current level of 40%.
- Allow claimants to negotiate the level of deduction before it is applied.
- The Scottish Government and local authorities review processes to ensure that delays are minimised.
- Universal Credit should cover the full rental costs for temporary homeless accommodation in private rented sector placements
- The UK Government review the freeze on Local Housing Allowance rates.
- The Scottish Government should consider options, including legislation, to prevent landlords from excluding recipients of benefits. eg. No DSS
- The UK Government reconsider the lowering of the Benefit Cap, with particular regard to the impact on lone parents with large families.
As you can see there are a large number of recommendations and I haven’t even listed them all. What is mind blowingly obvious is that Universal Credit and Welfare reform have caused significant issues relating to housing in general.
How much longer will Esther McVey blast reports as fake news. Now the DWP are in partnership with Citizens Advice, will she be so bold to go after them? I don’t know. What I will say though is I am pleased to see that despite the new deal CAB are still willing to criticize the government and it’s policies. Now we just have to hope it continues.
To read the full report rent_arrears_oct_2018
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