Testing the water

At first sight, East Lothian is an unlikely test bed for welfare reform. Picturesque towns and villages set in a rolling landscape seem a far cry from Channel 4’s Benefits Street.

Yet this area - home to the famous Muirfield golf course, and birthplace of environmentalist John Muir - piloted the roll-out of the all-digital ‘full service’ Universal Credit (UC) in March 2016, two months ahead of the main UK launch.

There is more to East Lothian than quaint villages and golf links, though. Swathes of social housing, some in former mining communities, sit alongside upscale homes. It can be an expensive place to live. Since I give housing options advice myself, I know the problems this causes - not least for benefits claimants.

The introduction of UC has brought a huge increase in workload for claimant-advising colleagues. They are tackling serious problems faced by some desperately unhappy customers. As are staff at partner agencies, like Citizens Advice.

Despite these issues, there’s a will to make UC work, and council staff want to realise its potential advantages. And both the UK and Scottish governments will have been keeping a close watch on developments here.

Teething problems

Some aspects of the new system are welcomed. Particularly for the young, managing benefits online is a boon. It does away with clunky letters and phone calls to the Department for Work and Pensions (DWP).

But when UC doesn’t work properly, it can be a nightmare. People without computer literacy or who have mental health or personal capacity issues seem especially vulnerable. Too many mistakes are being made by both claimants and the DWP, and these can be very difficult to put right. UC-related rent arrears are also rising fast. In the second quarter of 2016 alone, they increased by nearly 20%.

“Housing costs are one of the hardest things for the DWP to get their heads around.”

John Cunningham, benefits manager, East Lothian Council

With around 8,650 homes, East Lothian Council (ELC) is the largest local landlord. Other social landlords have a further 2,500 homes between them. Councillors and senior council managers are deeply concerned about rent loss and damage to vulnerable residents.

Of the 11% of tenants currently on UC, 86% are in arrears. In December 2016 the average rent arrears for a UC claimant was £898.89, contrasting with £589.49 for a non-UC claimant.

Meanwhile, anecdotal evidence collected by the council suggests that private landlords are increasingly reluctant to take on UC tenants - and private evictions for arrears put pressure on homelessness services. Households in temporary accommodation can be especially vulnerable to arrears problems.

Last December, ELC leader Willie Innes wrote to benefits minister Damian Green demanding better administration of the “housing costs element” of UC (formerly housing benefit) or its removal until implementation problems are sorted.

But what are those problems? Poor DWP staff training is seen as a major concern. Lena Thomson, 53, from Tranent, says she was told mistakenly that she should be seeking Income Support and would lose her contribution-based Employment and Support Allowance.

The job centre advisor “didn’t have a clue”, she says. It took two-and-a-half months to get what she and her husband Blair were due; meanwhile their rent arrears escalated.

Staff at the council-funded Bridges Project, which is based in Musselburgh and helps young people into jobs, say claimants have a mountain to climb. For instance, verifying a young person’s identity can be hard because they sometimes have no online existence, credit cards, passport or driving licence.

When they get their first Jobcentre Plus interview, they are not always informed that it is just for verification, explains Candace Higgins, independent living support worker at the Bridges Project. A second interview is required to sign the ‘claimant commitment’. Once over this hurdle, there is a long wait for their money. “They say it can take five weeks [but] it can take up to seven weeks,” Ms Higgins says.

Because of the wait, the Bridges Project has witnessed rocketing food bank usage and increasing referrals to the Scottish Welfare Fund (which helps households in crisis). Its chief executive, Jim Boyle, explains: “Young people have no social capital; they have rarely just ended a job. They’ve got no money at all and nowhere to get it from.”

“We are concerned about aspects of the administration of Universal Credit and in particular some individual hardship cases.”

Martin Pollhammer, chief executive, East Lothian Housing Association

Waiting drags on longer if something goes wrong. All communication is via the claimant’s online journal. Only they and the DWP can access it. That makes it hard for council staff and advice agencies to help, as they cannot communicate directly with the DWP on their clients’ behalf.

Journal misuse generates delays and errors. Alison Stewart, rent income team leader at ELC, says better training is required. “I feel [claimants] don’t get enough information about how they should be filling the journal in from Jobcentre Plus.”

It isn’t just claimants making mistakes. There are many tales of delays and incorrect responses from DWP staff. The housing costs element can be wrong. “Sometimes the figures on the screen don’t bear any relation to what is on the tenancy agreement,” says Yvonne Cassidy, manager of the Citizens Advice Bureau (CAB) in Musselburgh.

John Cunningham, benefits manager at ELC, agrees it isn’t always the claimant’s fault. “We’ve seen a few cases where [the DWP] will have made a decision on standard UC allowances but have yet to pay housing costs because their staff haven’t figured it out.” He says housing costs “are one of the hardest things for them to get their heads around”.

Waiting game

Calculation delays hold back payments and claims can be voided if information is judged to be lacking. For some, like 42-year-old Jane and her husband Frank, 56, (not their real names) from Prestonpans, delays have stretched on, with no end in sight.

The couple have been waiting seven months for their claim to be calculated correctly. While they wait, they have struggled to get by on reduced benefits.

Jane stopped work to care for her husband as his health deteriorated. He has yet to be offered a work capability assessment, which would increase his UC payment. In the meantime, rent arrears are mounting and Jane has had to return to work.

“We’ve done what we can,” Jane says. “The CAB has been helpful but they’ve only got limited clout. Now it is just a waiting game.”

Jane and her husband were also hit with a deduction for previous debt. Thanks to an alleged £2,000 overpayment of tax credits, their UC was reduced by £124 a month. Jane says HMRC had previously agreed to a £10 monthly repayment. After repeated complaints, their UC cut was eventually reduced to £50.

DWP deductions are a contentious feature of UC, according to Ms Cassidy.

“It has trawled back over 20 years of benefit payments and people are seeing deductions: they don’t know what they are for and they don’t have any warning, because they don’t get a decision letter.”

She suggests that some claimants who don’t receive such letters could launch a legal challenge, since they cannot appeal without one.

Mr Cunningham says the deductions, set at up to 20%, cause hardship. He would prefer to work with claimants to repay “at an agreed recovery rate which leaves food on the table”.

Disastrous consequences

Poor communication is all too common, according to Ms Higgins of the Bridges Project. It is especially problematic when UC stops unexpectedly. The DWP rarely explains. “If you haven’t told [claimants] they are not going to get something… how are they going to know? They are not psychic.”

Communication problems are also blamed for delays to Alternative Payment Arrangements (APAs). These allow landlords to receive housing costs directly, rather than being paid by the claimant.

“There has to be something in place for people who don’t fit the standard, even if it’s a small percentage.”

Yvonne Cassidy, manager, Citizens Advice Bureau

Although the Scottish Government has said it will allow all tenants to pay by APAs, the policy may not be implemented for several years while it waits for systems to be put in place to deal with the Scottish element of UC. Meanwhile, ELC estimates £1.7m of housing arrears will build up in 2016/17 alone.

Obtaining an APA can be a struggle. I have seen journal entries from a recovering drug addict who implored the DWP to set one up, to stop him relapsing. It took many months for them to act. By that time, he had accrued huge arrears, using his housing costs to feed his habit.

Glitches can be catastrophic for people who are mentally fragile, according to Ms Cassidy. She references a CAB client with severe anxiety, who has made repeated suicide attempts because of UC non-payments.

She says UC could work if tweaked to protect the vulnerable, but continuing to take a one-size-fits-all approach will cause distress. “There has to be something in place for people who don’t fit the standard, even if it’s a small percentage,” Ms Cassidy adds.

The extent of mishandled UC claims in East Lothian is unknown. But it certainly isn’t failing everyone, or even the majority.

At the second-largest housing provider, East Lothian Housing Association (ELHA), chief executive Martin Pollhammer welcomes UC’s introduction. He considers it to be a good basis for a modern benefits system. He says the DWP’s digital strategy is closely aligned to ELHA’s in that tenants are able to access high-quality digital services in managing both their tenancy and welfare benefits. But he agrees the errors need to be sorted out.

“While many of our tenants are adapting well to the new services, we are concerned about aspects of the administration of Universal Credit and in particular some individual hardship cases. We are working hard alongside the DWP to ensure these issues are resolved and have been encouraged by its response,” Mr Pollhammer explains.

Testing times

How well is the DWP engaging with other organisations? At the council, Mr Cunningham says discussions with civil servants have brought improvements, but there is still some way to go. “The DWP says it is in a ‘test and learn environment’. Well, it has been very testing and we’ve yet to see what is being learned.”

Kenny Christie, revenues manager at ELC, believes more effort should have been made to spot and deal with frontline issues. “The DWP should have had a project team working with us on site,” he insists.

So how does the DWP respond to the criticism? It does acknowledge that there have been “issues”. But a spokesperson defends them as the teething problems of “the biggest welfare reform of a generation”.

The DWP claims vulnerable groups will be “fully supported”. It says that is why the new system is being rolled out gradually, to minimise disruption. It denies staff are poorly trained, saying there are 1,200 UC work coaches in Scotland and 170 more on the way by 2018. It says lessons have already been learned and improvements have been made in verifying claims, in data sharing with landlords, and managing payments.

It denies debt reductions are set at a rate that will cause undue hardship, and it apologises to Jane and Frank for “any inconvenience caused” by his wait for a work capability assessment. It says “a decision has now been made”.

But many officers and customers don’t think this response reflects their own experience. There is a consensus in East Lothian that UC could work. But with many claimants among the most vulnerable members of society, the glitches need to be dealt with. And quickly.