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Charity warns direct payment costs will rise

A homelessness charity has warned rent arrears are likely to be higher when direct payment of benefit is rolled out nationally than under the government’s demonstration projects.

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The policy of paying benefit direct to tenants rather than to landlords is being trialled in six areas across Great Britain. Initial findings published before Christmas showed rent collection rates are 92 per cent on average across the projects. This is lower than the current sector average, but the results have nevertheless prompted welfare reform minister Lord David Freud to claim ‘the majority of people’ are paying their rent in full and on time.

Kate Webb, senior policy officer at Shelter, warned the communities and local government select committee of MPs yesterday (Monday) that the arrears will be higher if the equivalent level of resources is not put into making direct payment work everywhere.

She said: ‘When you pilot something you want it to work so you put the resources in.

‘Our concern is that those results won’t be replicated on a national scale.’

Earlier, Kevin Dodd, chief executive of demonstration project landlord Wakefield District Housing, told MPs the bedroom tax and total benefits cap would lead to a weekly loss of capacity of £100,000 for the 32,000-home association.

Lord Freud, welfare reform minister, later told the committee that direct payment will help people ‘to look after their own lives so there is not an artificial barrier to taking a job’.


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