Monday, 02 March 2015

What do you know?

Universal credit has started. Claimants in Manchester are receiving payments right now. But the work to establish strong support for claimants and protection for landlords must still continue.

Twelve months into the demonstration projects, I am encouraged to learn from their findings about the best way to support tenants and landlords make the move to direct payments and universal credit.


The pilot projects are showing the majority of claimants are managing their own rent - even through Christmas when budgets can be tight for people. A minority of tenants need help and we are gaining detailed insight into what support they need and how it can be provided so that the financial position of landlords is protected.

Again and again, I have been struck by some of the specific cases that have been found by landlords taking part in the demonstration projects.

For example, it was shocking to learn of a family that was living in appalling conditions because their father was a lone parent of four children and struggling to cope with a heroin addiction - and they were not getting the help they needed because they were not on the radar of the relevant authorities.

This example only came to light because the tenant and the landlord had a changed relationship because of direct payment. In fact, one of the first things we learned from the demonstration project was that landlords did not know as much as they might have thought about their tenants.

This may seem a dry, academic point, but it means that people with complex issues are not getting the help they need.

We also found during the projects that it is not straightforward to predict who might struggle with direct payment and who would find it easy. Many tenants who landlords thought might be ‘high risk’ have managed very well.

Turning lives around

For example, one social landlord had a tenant with previous drug and alcohol issues who was also an ex-offender and did not have a bank account. However, he felt he had done much to turn his life around, to deal with his issues and to try to find work.

After an initial meeting with a welfare reform officer, this man quickly opened a bank account and moved on to direct payment. Again, once the landlord got to know more about the tenant, it was better able to help them.

We know the areas taking part in the project have put extra resources in to manage the extra tenant engagement required. This was needed as the demonstration projects started in mid-2012 before other support was available. We have now published details of our Local Support Services Framework, which will help landlords and their tenants who may require extra support to access universal credit.

We will continue to work with social landlords and other partners to make sure that the support tenants need to make the change to direct payment is in place. Social landlords will need to make decisions about how they will collect the rent once tenants move on to direct payment.

We have learned a lot about how to support the gradual roll-out of universal credit. There are still key decisions to take around the issue of when we would switch back a tenant to managed payments to the landlord and we are considering this matter carefully.

But it is not simply a case of setting this ‘arrears trigger’ and then moving on. There is still information and knowledge we want to gain from the demonstration projects that we can share with landlords, for example, on communication with tenants.

I understand the concerns of landlords as we progress with universal credit. We know some people will need extra support to manage their own rent payment, and we are committed to ensuring people do not fall through the cracks.

Long-term goals

But the overall prize of welfare reform is helping more people into work so they can improve the lives of their families. Universal credit will prepare people for the world of work by getting them to manage their money in the same way people in work budget. Breaking this behavioural barrier is an important step in helping people move towards financial independence.

The role of landlords is important to this, and while we will ensure the landlord’s financial position is protected we will encourage social landlords to help their tenants move towards financial independence.

The demonstration projects are helping us do this and I am certain landlords will welcome the fact we are continuing them for a further six months.

Lord Freud is minister for welfare reform

Readers' comments (10)

  • Joe Halewood

    Ask yourself the same question Lord Freud - what do you know?

    If you knew that many women would nt be able to flee domestic violence and abuse as your benefit cap policy made a refuge unaffordable then you wouldn't have developed it surely? Yet you did

    If you knew bedroom tax arrears would rocket as they have then surely you wouldn't have said social landlords finance will not be hit - yet you did!

    If you knew that families with 6 children will not get a penny in housing benefit and hence will be evicted and hence will have to reside in temporary homeless accommodation permanently at huge cost to the public purse then you would never have enacted the benefit cap - Yet you did!

    I could go on and on yet how significant is it that Freud is discussing UC and does NOT trot out the coalition UC mantra in this carefully prepared and drafted piece - YOU WILL ALWAYS BE BETTER OFF IN WORK - it is noticeably absent from this piece!

    Then again its Lord Freud - what does he know anyone?

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  • Social landlords should be totally opposing the direct payment
    method of universal credit , so as to keep in place the
    existing process of housing benefit being paid directly to them.
    The british poor are already facing £24 Billion of benefit cuts imposed
    upon them by the con dems , and many of those cuts are repeated
    annually , to cause massive shortfalls to these people in meeting
    the ever increasing costs of living , and then they are facing
    getting their benefit payment at the end of a 4 week period and to
    pay their own rent after such benefit cuts will be very difficult.
    For example , social landlords want their rent paid weekly in
    advance and do not allow any 4 week waiting period.

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  • Colin Mcculloch

    If the direct payments pilot has shown that landlords need to know more about their tenants, then the entire welfare reform project has shown just how out of touch Ministers, the DWP and Jobcentre Plus are with the realities of social security in the UK.

    No project for reform should have been undertaken whilst there was 2.5 million unemployed - create the jobs first and then make sure that the system is working for everybody.

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  • Housing professionals - hang your head in shame.

    Welfare cap - disaster
    Bedroom tax - disaster
    Direct payments - disaster
    Grant cuts - disaster

    Universal Credit - there are no words for this catastrophe

    You guys go on courses to learn how to best manage the apocolypse - joke.

    £130bn goes on Help - to - Buy and none for HA's

    Suggestion - call the businessmen who negotiated Help - to - Buy.................... they will help HA's to get rid of loony policies.

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  • why does IH even give this person airtime. he doesnt listen to housing professionals or tenants so why should we suffer his smug peurile rubbish. its like listening to goebbels. does even he still believe this is anything but a disaster ??

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  • Colin Mcculloch


    Why should housing professionals hang their head in shame? What could they have realistically done to stop these welfare reforms other than the constant lobbying they have undertaken?

    If staff of RSLs hadn't went on course on how these reforms will work, the same critics would be complaining that they hadn't done enough to learn how to manage.

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  • Colin McCulloch, I want you and your colleagues on my side if I went to war - I would say 'over the top' and you'd all walk into the gunfire..............

    You are business people before bureaucrats - CML negotiated direct payment - why couldn't HA's ?

    Stand up, stand together and learn the two-fingered salute.

    Most af the reforms clearly won't work and may affect the viability of your business models - what is your response ? ........... lets go on another course to learn more stuff that doesn't make sense.........

    Big brass b*lls are needed and the HA's dont have a pair between you.

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  • Joe Halewood

    Dear Lord Freud

    I have now seen the letter you sent to councils re reclassifying properties. In it you say if a social landlord re-designates a property from say a 3 bed to a 2 bed then a rent reduction will follow - this is even in the case of a social landlord installing a vertical lift or a wet room as an adaptation for a disabled tenant.


    The title of your article here is WHAT DO THEY (LANDLORDS) KNOW!!

    You sir are a buffoon and incompetent and a dangerous incompetent at that!

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  • We hope you are right Lord Freud, but from all we hear on the ground it doesn't sound too rosy.

    I'm interested in why direct payments to private landlords look like they are now being made easier - and why this was slipped in as an announcement in a circular to HB staff.

    I understand that now expecting the number of “exceptions” (i.e. to pay landlords direct) will be around 30% – in other words, about the same as with the previous attempts at direct payments to tenants, once the penny dropped and safeguards were put in place before.

    Now, we would hate to say "I told you so..."

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  • michael barratt

    How many homeless families does it take to make one billionaire?

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