Implementation of welfare reform by local authorities - Communities and Local Government Committee Contents


3  Housing Benefit

19.  As we have noted, from 1 April 2013 Housing Benefit will be phased out and new housing benefit claims will migrate into Universal Credit (UC) and become part of a single payment. The process will start in four areas (Tameside, Oldham, Wigan and Warrington) and then roll out across the rest of England from 1 October 2013, covering all claims by October 2017. Housing benefit is a vital payment for claimants because it enables them to have a safe and secure place to live. It is therefore especially important that the Government's planned changes are effectively implemented.

20.  Although the submissions we received were broadly supportive of the changes to housing benefit, several concerns were raised about their implementation.[37] The first was that it was not yet clear which tenants would have their housing benefit paid to their landlords. Under the new arrangements not all tenants will receive the housing part of UC directly. Two categories will be excluded: those who go into arrears and "vulnerable" tenants. The second concern was that the payment of the housing element of UC direct to claimants could lead to increased arrears and collection cost for housing associations if adequate safeguards against non-payment were not in place. The third concern was that, because the housing element of UC would be paid one month in arrears, claimants would begin their tenancy four weeks in arrears. The fourth concern was that the results of the Direct Payment pilots currently underway would not be fully available in time to inform the rollout starting in October 2013.

Direct payments to tenants

21.  Paying the housing element of Universal Credit direct to tenants is designed to encourage financial independence and responsibility by replicating a monthly wage and thereby to make the transition to work more straightforward. Lord Freud, Minister for Welfare Reform, told us:

The principle is that we want to encourage as many people as can handle it to look after their own life and take responsibility for it—that includes paying rent—so that there is not an artificial barrier to those people taking a job, which is the only route for people out of poverty.[38]

22.  To underpin this objective Lord Freud explained in a speech in 2011 to the National Housing Federation (NHF) that, from October 2013, "direct payments to tenants will be the default position for most working age benefit claimants living in social housing when they move on to the new system".[39] (As we have noted there will be certain "exceptions" which we discuss at paragraph 27.) This contrasts with the current system for social housing where the vast majority of housing benefit claimants have their rent paid to their landlord by their local authority.

FREEDOM TO CHOOSE?

23.  Some witnesses argued that claimants should have the choice over whether their housing benefit was paid direct to them or to their landlord.[40] We were told that some claimants could struggle to make payments if the housing element of their benefit was paid direct to them leaving them able to spend it on other things. The NHF told us that early indications from Direct Payment Demonstration Projects currently underway showed that 24 per cent of claimants "reported that they would need support if Housing Benefit were to be paid directly to them".[41] The DWP's own survey results from October 2012 show that only around half, 54 per cent, of households, were "confident in receiving payments direct".[42] The NHF told us that a 2012 study showed that 86 per cent of social tenants "strongly" believed that their housing benefit should be paid to their landlord "so that they are secure in their home".[43] The Residential Landlords Association (RLA) told us:

In October 2009, data from a survey of LHA [Local Housing Allowance] claimants by Shelter found that of the claimants who would choose payments to be made directly to their landlord, 95% are struggling to manage their finances. Almost half of the claimants who have had experience of both forms of payment believe that landlord payment better helps them in managing their rent and household budget.[44]

The RLA argued that allowing tenants to have their rent paid to their landlord if they wished to opt out of Direct Payment would not contradict the Government's desire to encourage financial responsibility because "for many it would be a perfectly rational and financially responsible decision to have the assurance that their rent had been paid so that they could decide on how to spend the remainder of their income".[45]

24.  Landlords also have reasons to want to receive rent payments directly. Direct Payment offers them security. This could act as an incentive to seek to persuade, if not pressurise, their tenants into having their housing payments paid direct to their landlord.

25.  The key issue for us is whether, if it is accepted that tenants should be encouraged to manage their own finances and to receive housing benefit, the opt-outs should be drawn so tightly as to permit Direct Payment to landlords only in exceptional circumstances. Several witnesses wanted DWP to be flexible in its approach to Direct Payment to tenants. London Councils welcomed an acknowledgement from Lord Freud that "not all recipients will be able to manage their finances in a way that prevents arrears".[46] They suggested that the DWP should be prepared to "act flexibly" regarding Direct Payment, pointing out that it had permitted Northern Ireland to "opt out" of Direct Payments to tenants.[47]

26.  Direct Payments will be introduced for all tenants at the same time as they enter UC and will not be phased in. In contrast with the Government's Digital by Default policy (which focuses on encouraging people to claim benefits online), direct payments will be compulsory for all those not defined as "vulnerable" or subject to "exceptions". The NHF said that:

Continuing to give tenants the choice to have their housing costs paid direct to their landlord would allow them time to adjust to the new system gradually, rather than deal with several large changes at once.[48]

"EXCEPTIONS" AND "VULNERABLE" TENANTS

27.  Under the proposed arrangements there will be certain groups to which Direct Payment will not apply. Some people will continue to have their rent paid to their landlord if they are defined as "vulnerable". In his speech to the NHF in 2011, Lord Freud told landlords that:

I fully appreciate that some of your tenants simply cannot manage their own finances. I know some people are very vulnerable and this change is just not appropriate for them. We estimate that roughly between five and 10 per cent of all tenants fall into this category. For these vulnerable people we will continue to pay housing costs direct to landlord.[49]

28.  In addition to allowing some "vulnerable" tenants to have their benefit paid to their landlord, the Government has proposed making "exceptions" for certain claimants who could, for example, receive housing payments more frequently.[50] Our colleagues on the Work and Pensions Committee raised concerns last year that the exceptions process "may not accurately identify everyone who will need additional support. It is also likely to be expensive and bureaucratic to operate".[51] Leeds City Council argued that "time-limited exceptions" should not be used for claimants who, for example, suffered from mental illness and would be likely to have long-term or recurring problems.[52]

29.  DWP has not yet defined what it means by "vulnerable" or set out which claimants will be covered by its "exceptions" to Direct Payments to tenants. Circle Housing Group called on the Government:

as a matter of priority to provide guidance on what the term "vulnerable" will mean under Universal Credit and to provide guidance as soon as possible on questions that remain unanswered that have been identified by ourselves and other housing associations as part of this inquiry to provide an element of surety to the sector.[53]

On the other hand the NHF said that:

The definition of vulnerability—to determine which groups of tenants should continue to have their benefit paid direct to their landlord—to be broad and flexible and include financial vulnerability. Failure to draw this definition realistically risks leading to significant increases in arrears among tenants.[54]

This is supported by other witnesses.[55]

30.  Although DCLG states on its website that UC will "ensure sufficient support mechanisms are in place for tenants who may need help managing their finances", it is not yet clear what these will be.[56] Lord Freud explained that "we are aiming to avoid the word 'vulnerable' and the definition of vulnerable".[57] He said that:

To give you an example, if I am heavily disabled, I am at one level to be considered vulnerable, but I might be perfectly capable of handling my financial arrangements, budgeting and everything else. Our approach is to look much more specifically at the types of support somebody is likely to require and tune our efforts in that direction, having established what their requirement is.[58]

31.  On 5 February, DWP said in its response to the Work and Pensions Committee's report on UC that it was not:

Seeking to define "vulnerability" for the purposes of administering Universal Credit. Any attempt to do so would risk some people with complex needs falling outside of the prescribed definitions [...]. As a result full guidance, including financial and vulnerability factors that would trigger a conversation with a claimant about their budgeting needs [...] will be made available to support staff handling these cases.[59]

32.  The delay in providing a definition of what constitutes a "vulnerable" tenant and in setting out the "exceptions" that will operate for Direct Payments to tenants needs to be resolved quickly otherwise local authorities and housing associations will be unable to plan effectively. The Government must provide local authorities and housing providers with a clear set of "exceptions" to Direct Payment to claimants. In addition, whether it calls it guidance or a definition of "vulnerability", DWP must produce information on which tenants will not receive Direct Payments for local authorities and housing associations quickly. When doing this the Government should bear in mind the need for clarity for tenants and landlords and to minimise bureaucracy for housing associations and local authorities having to assess who will be eligible to have their rent paid on their behalf direct to their landlord. We recommend that any definition or guidance of what constitutes a "vulnerable" tenant should include a wide range of reasons for vulnerability to allow flexibility in its use.

ARREARS AND COLLECTION COSTS

33.  The Government recognises that Direct Payment of the housing element of UC to tenants is a significant change and may have an impact on landlords. Lord Freud said in his 2011 speech to the NHF that:

I am fully conscious that Housing Benefit income streams are a vital component of housing finance, particularly in terms of funding new housing. I am determined that the introduction of Universal Credit, and therefore direct payments to tenants, does not undermine the financial stability of the housing sector. But I remain utterly convinced that there are mechanisms available which will allow us to both introduce a single Universal Credit payment, which includes housing costs, whilst also providing protection for the sector.[60]

34.  Lord Freud reiterated to us in January that he was "determined that direct payments will not undermine the 'financeability' of housing associations".[61] We therefore decided to ask whether there are sufficient safeguards in place to protect social landlords from financial harm resulting from Direct Payment to tenants. Our witnesses agreed that rent arrears and rent collection costs would be likely to increase as a result of Direct Payment and that this represented a financial risk to landlords.[62] The Welfare Reform Club told us that it was "likely" rent arrears would increase "at least in the short-term".[63] We looked at how Direct Payments to tenants had been operating in the private rented sector. The Welfare Reform Club pointed out that, under the Local Housing Allowance, which included the introduction of Direct Payments to tenants in the private rented sector from 2008:

There has been some increase in rent arrears in the private-rented sector as a result of the Local Housing Allowance, particularly where authorities have kept strictly to the policy to pay landlords only in very limited circumstances. If more people are presented with an opportunity to default, whether or not they receive benefits, a proportion of them will do so.[64]

East Riding of Yorkshire Council said that because arrears were currently increasing in the private rented sector, rent payment direct to private landlords was being increasingly used.[65]

35.  Many of our witnesses were fearful of the possible effects on housing associations.[66] The National Landlords Association (NLA) said that it was "entirely possible" that Direct Payment:

will lead to a greater frequency of rent shortfalls and the possibility of arrears. In turn, this is likely to result in increased costs for housing providers in respect of collecting those arrears, legal proceedings and in the worst cases possession costs.[67]

36.  The potential for both arrears and resulting increased collection costs was a significant concern among social housing providers and organisations representing them have told us that many are likely to consider leaving the social rented sector as a result of Direct Payments to tenants. The Residential Landlords Association (RLA) said that a survey of its members showed that 92 per cent would be less likely to rent to social tenants if their current ability, in the private sector, to demand payment of rent direct to them when tenants entered eight weeks of arrears were removed.[68]

37.  Another fear was that there would be a knock-on effect on rents. The NLA told us that rents were likely to increase if landlords were unable to negotiate payment of rent direct to them. It pointed out that a change in 2011 had enabled negotiations with local authorities to lower rents in exchange for allowing payments direct to landlords. The NLA told us that the lower rents that had resulted from this "had been made possible by the reduction in risk and cost savings subsequent to the simplification of rent collecting".[69] The NLA concluded that:

if this flexibility is removed it is likely that landlords' collection costs and inherent risk will increase to pre-2011 levels, inevitably leading to increases in rent. Collection costs tend to be higher in respect of LHA recipient households due to the higher level of financial exclusion present in this sector.[70]

38.  Some of our witnesses identified several safeguards for social landlords that, they said, would mitigate these risks and which need to be in place for Direct Payments to tenants to work as intended. The first was that there should be an "efficient 'switch-back' mechanism to ensure rent was paid direct to the landlord if a tenant builds up eight weeks (or an equivalent percentage of the annual rent)".[71] The second was that tenants should all have the choice to have their rent paid to their landlord.[72]

39.  As noted, currently under the Local Housing Allowance system automatic switch-back of rent to the landlord is allowed when the tenant enters eight weeks of arrears. Many witnesses called for the same or similar automatic switch-back mechanism to continue under UC.[73] The British Property Federation argued that in the social sector the trigger should be at six weeks rather than eight at the start of the rollout of UC:

This would not only represent an improvement on the current [Local Housing Allowance] system but would also help mitigate the overall increases in risks associated with letting to tenants who will be supported by an as yet unknown and untested new benefits system.[74]

In addition, there have been suggestions that an "underpayment trigger" should be used as well as an arrears trigger which would allow landlords to obtain rent when tenants persistently paid less rent than they owed. Evidence from the Direct Payment Demonstration Projects, discussed in detail from paragraph 46, suggest that more tenants would be moved out of Direct Payment due to underpayment than arrears.[75]

40.  If the Government is to meet the assurances it has given landlords, that their financial viability will not be affected by Universal Credit, it should introduce an automatic arrears trigger for switch-back similar to that available under the Local Housing Allowance. Given that this is a new system affecting significant numbers of tenants, the Government should consider starting the rollout of Direct Payments to tenants with a temporary switch-back mechanism with six weeks of arrears, later moving to eight weeks, in order to address the concerns raised by housing associations about initial levels of arrears and collection costs.

PAYMENT IN ARREARS

41.  Several submissions raised concerns that the housing element of UC will be paid one month in arrears. The reason for this provision is to replicate as closely as possible a monthly wage.[76] Leeds City Council said that monthly payment in arrears would be likely to increase the level of money owed by tenants and it estimated that:

If rent arrears were to increase from £4.2m (2.35% of rent due in 2011/12) to £7m (3.92% of rent due) then it is estimated that the Housing Revenue Account would be required to contribute an additional £1m to the bad debt provision. Furthermore, failing to collect 1% of the level of rent due will mean £2m less to spend on Council properties.[77]

Liverpool City Region Child Poverty and Life Chances Commission told us that paying rent one month in arrears would have an effect on housing associations as well as social tenants, and said that:

Backdating under Universal Credit is limited to one month and as the first payment under Universal Credit is likely to be one month after the direct payments application then this will be the limit of backdating possible. Social landlords may have to carry forward more arrears than currently, may have to expend more costs in recovery and think about the time scales and costs of taking legal action.[78]

42.  Blackpool Council was concerned that tenants who were unable to pay upfront may take out loans at "punitive interest rates". The council also said that reduced cash-flow from rent would lead to the provision of the "housing and maintenance service" becoming "unaffordable".[79]

43.  Under the new system of housing benefit payments a proportion of tenants will enter their tenancies one month in arrears. This will lead to reduced cash-flow for housing associations. In addition, we note that most social rent is currently paid on a weekly basis meaning that many housing associations may have to change their systems in order to work with monthly housing payments in arrears. We recommend that the Government hold urgent discussions with the Local Government Association and the National Housing Federation about how this new, automatic four weeks of arrears for many tenants will be managed. The Government must also set out how any reduced cash-flow will be funded.

'JAM-JAR ACCOUNTS'

44.  A set of financial products, so-called "jam jar" bank accounts have been suggested by the Government as a solution to potential problems with Direct Payment.[80] These budgeting accounts would allow the creation of accounts where money coming in earmarked for a specific purpose could not be spent on anything else. These accounts would allow tenants to see the money for rent passing through their account each month but—because it would be ring-fenced—they would not be able to spend it on anything other than housing costs. Similar accounts are already offered by financial service providers and credit unions at a monthly cost. In September 2012, the Government called for providers to introduce these financial products for UC claimants.[81] The NHF told us that it welcomed the creation of these products as a safeguard against tenants going into arrears.[82] These jam jar accounts, alongside a switch-back mechanism (for those not using jam jar accounts) and allowing "vulnerable" tenants to have payments made to their landlords, are intended to provide a package of measures to protect against risk of default under Direct Payment.

45.  We welcome the Government's plans to encourage the introduction of budgeting or "jam-jar" accounts which would allow tenants to see benefit payments moving in and out of their account without the risk of the money being spent on other things. This would provide both transparency for tenants and security for landlords. More information is needed from DWP, however, on how these accounts would work and who would pay for them.

DIRECT PAYMENT DEMONSTRATION PROJECTS

46.  DWP recognises that the changes are significant and is running pilots to inform the new system. Six Direct Payment Demonstration Projects across Great Britain are currently being run by DWP in order to test "a number of different aspects of direct payment of housing benefit to social housing sector tenants, ahead of changes that form part of Universal Credit".[83] The projects began between June and August 2012 and are due to report in June 2013. The project areas are:

  • Dunedin Canmore Housing Association in Edinburgh, working with the City of Edinburgh Council;
  • Oxford City Council and Oxford Citizens which is part of the Greensquare Group, Southern England;
  • Shropshire Unitary County Council and Bromford Group, Sanctuary Housing and the Wrekin Housing Trust, West Midlands;
  • Southwark Council and Family Mosaic, London;
  • Torfaen County Borough Council and Bron Afon Community Housing and Charter Housing, Wales; and
  • Wakefield Metropolitan District Council and Wakefield and District Housing, Northern England.[84]

47.  DWP provided some initial findings from these projects in a report released in December 2012. Over the first four months of the projects 6,220 tenants were paid rent directly. The current standard average collection rates for housing associations is in the range of 94 to 96 per cent of rent due. Housing Minister, Mark Prisk MP, has told us that housing associations had said to him that there would be "bad implications" for them if rent collection rates dropped below these levels.[85] The collection rates over the projects ranged from 88 per cent to 97 per cent. "Over the first four months, 6,220 tenants were paid their housing benefit directly. Against a total level of rent charged of £7,692,844 over the period, payment collection rates stood at 92%".[86] This indicates that £615,427 in rent went uncollected over the period.[87]

48.  Because the projects are designed to test different methods for operating Direct Payments to tenants, the information available from each project varies—for example, not all results include collection rates—and some figures are not directly comparable. The initial findings do, however, give an indication of how Direct Payments to tenants may affect tenants and landlords when they are introduced nationally. The early indications bear out expectations that arrears are likely to increase, at least in the short term. Kevin Dodd, Chief Executive of Wakefield and District Housing, which had over 1,000 tenants involved in the project told us that:

Overall, we have seen an increase in debt to about 11% of the debit [rent owed], which normally on 31,000 properties is 2.9%. People who came into the demonstration pilot with no arrears now have an average of £180 debt going forward.[88]

Not all the pilots provided precise figures on how many tenants took part or the level of arrears so far. The Edinburgh project shows that among the approximately 2,000 tenants participating, arrears have increased to £27,507.[89] The report qualifies this figure saying that Edinburgh is testing a four week switch-back mechanism which means that it is not comparable to other projects.[90] The Oxford project reported increased arrears but said that the trend was for "arrears to steadily reduce after the initial payment".[91] The Torfaen project reported that its tenants had eight weeks to pay their rent and said that "arrears are moving up and down over the payment cycle". It added that "payments are taking longer to arrive and the trend we are seeing in arrears is an adverse upward one".[92]

49.  Overall the projects seem to indicate that late payment of rent is likely to be as much of an issue as non-payment. The Edinburgh project reported that "in respect of October's rent debt, over 50% of rental income due was received up to two weeks after the period end close".[93] The Shropshire project reported that tenants were clearing their arrears within four weeks of rent being due "meaning that over time arrears are settled".[94] The Torfaen project reported that:

Our experience of switchback is that it is currently being triggered by repeated underpayment rather than non-payment of rent suggesting it will be an essential safeguard under Universal Credit.[95]

50.  On the costs associated with educating and supporting tenants the Edinburgh project reported that:

Engagement, advice on budgeting and financial inclusion will involve markedly more intense housing management resource commitment and staff liaison than has traditionally been the case.[96]

The fact that the cost of providing support and information to tenants in these projects was high is particularly significant given that tenants were able to opt out or were selected for participation in the projects. This indicates that the results of rolling out Direct Payments nationwide may be that arrears will be higher than has been seen in the pilot areas where the most vulnerable tenants can self-exclude or be screened out. The limited number of tenants participating also means that housing associations and local authorities have been able to concentrate their resources on a proportion of their tenants in their housing stock rather than all tenants. The pilots will also differ from any national rollout because they are not operating alongside the other changes to welfare which will increase pressures on many household budgets—for example, with reduced Council Tax relief. In addition, some groups of tenants were identified by their housing association as at risk of non-payment and were given additional support to prepare them for Direct Payment.[97] But this assumes an additional cost: the Torfaen project reported that increased arrears in its project were "a concern" as it had "proven difficult to identify and access additional capacity amongst existing support providers locally" and:

With one member of staff to every 160 tenants in the project our collection costs have risen significantly.[98]

51.  Southwark Council told us that the cost of providing support and advice to claimants, as well as informing them of the changes, was likely to be significant.[99] Citizens Advice also said that:

the evidence we have seen from the local "Demonstration Projects" suggests that preparing claimants for this change needs significantly more resources than was anticipated. We also understand that some [local authorities] have found that this work has impacted adversely on their day-to-day activity, including rent collection and arrears recovery.[100]

52.  Information available from the Direct Payment Demonstration Projects shows that rent arrears have risen initially and then fallen back, settling at higher than the original levels. We recommend that, if arrears rise significantly when Direct Payment is rolled out nationally, the Government works with the LGA and the National Housing Federation to consider what additional measures it will put in place for tenants to help them reduce their arrears.

53.  Providing general financial education, as well as specific information and guidance, to tenants will play an important role in the effective implementation of Direct Payments to tenants nationally. In this context we welcome the Government's announcement that financial education will be added to the national curriculum in 2014. However, it will take time before it has an effect and in the meantime we recommend that the Government take the opportunity offered by the changes to welfare to work with the Local Government Association and National Housing Federation to develop methods to encourage more people, particularly benefit claimants, to engage in financial education.

TIMING OF THE PILOTS

54.  DCLG told us that the results from the Direct Payment Demonstration Projects which are due in June this year would be "feeding into the design of Universal Credit".[101] DCLG explained that it was

testing out how best to support people to manage their finances so they don't miss rent payments and are able to manage their own budgets, and how to support landlords if people do miss rent payments.[102]

55.  Several of our witnesses told us that the results of the projects needed to be made available more quickly than was planned.[103] Durham County Council, which described the timescales for introducing the changes under UC as "very challenging",[104] told us that:

There is a very short window between the completion of the Universal Credit pilots and the proposed launch in October 2013. The DWP has stated that no decision would be made on the future role, or future funding of councils on UC until after the pilots have finished and been assessed in September 2013, which is just one month ahead of the planned national roll-out.[105]

The Chartered Institute of Public Finance and Accountancy told us that:

We consider it crucial that the lessons from welfare reform [Direct Payment] pilot areas [...] should be shared nationally—and in sufficient time for the lessons to sink in and for appropriate action to be taken in authorities.[106]

56.  The purpose of a pilot is to inform and refine the operation of a policy. We recommended in our 2012 report on the Financing of New Housing Supply, that the Government should:

set out clear criteria by which the success of these projects will be judged [...].We further recommend that the Government only proceed to direct payment to social tenants if and when any issues identified by the pilots have been fully resolved.[107]

In its response to us the Government said that the projects were being "independently evaluated by a research consortium".[108]

57.  We welcome assurances from the Government that the results of the Direct Payment pilots will feed into the design of Universal Credit and assist in the development of safeguards. To minimise the risk of unexpected additional expenditure and the need to make unplanned changes after implementation, we recommend that the Government ensure that the results from the pilots are published in time to allow any changes to be properly factored in to plans for the national roll-out.

58.  The Government must clearly set out what level of arrears it thinks will be sustainable in the medium to long term for housing associations and at what level it will consider introducing additional safeguards or limiting the use of Direct Payment.

Social Sector Size Criteria

59.  Social Sector Size Criteria (SSSC) referred to by some witnesses as the "bedroom tax", is being introduced from 1 April.[109] Under SSSC households that under-occupy one bedroom will have their housing benefit reduced by 15 per cent. Housing benefit will be reduced by 25 per cent if two or more bedrooms are under-occupied.[110] The aim of this measure is to:

encourage claimants to take responsibility for their financial decisions and support landlords to make the most efficient use of their stock.[111]

60.  Several of our witnesses said that the introduction of the SSSC would place an additional strain on households, which could lead to them being less able to pay their rent.[112] Stockton-on-Tees Borough Council argued that there was insufficient supply of small properties to allow it to find appropriate homes for those currently over-occupying in the social rented sector. It said that:

Stockton like many northern local authorities has a 'mismatch' between social/affordable housing supply and demand i.e. the current make-up of social/affordable rented housing does not mirror the 'actual' demand from both current and prospective tenants. This historically has resulted in properties being let on a 'known' under-occupancy basis and will inevitably impact on our local RPs ability to offer suitable, smaller accommodation to their tenants.[113]

We concluded in our 2012 report on Financing of New Housing Supply that there was a "major housing shortage"[114] in the UK which was likely to exacerbate problems for housing providers trying to find appropriate properties for tenants. In our report we identified measures to raise finance to increase the supply of housing including:

  • encouraging housing associations to work with institutional investors;[115]
  • overcoming the barriers to the establishment of residential Real Estate Investment Trusts;[116]
  • piloting a housing investment fund;[117]
  • expanding the Green Investment Bank to cover housing;[118]
  • introducing plans for delivery of affordable housing post-2015;[119]
  • the use of bonds by housing associations;[120]
  • consulting on arrangements for the future financing of housing associations;[121]
  • suggesting housing associations enter into equity-sharing arrangements with local authorities and developers;[122]
  • lifting the local authority borrowing cap and enabling the sharing of borrowing power between local authorities;[123]
  • allowing arms-length management associations to adopt new models;[124]
  • making changes to Government accounting;[125]
  • the use of bonds by local authorities;[126] and
  • releasing public land for development.[127]

61.  DCLG told us that it was providing support for local authorities in advance of the introduction of SSSC and had issued guidance for local authority staff on applying the SSSC, including "model letters and leaflets to aid local authorities in publicising these changes".[128] DCLG is also funding a group inside the Chartered Institute of Housing "to provide practical support to help landlords tackle under-occupation".[129]

62.  The fundamental problem has been a long-term failure to build sufficient homes. In our report on the Financing of New Housing Supply we have already made recommendations, listed in this report, which would begin to address this issue which we urge the Government to consider. The consequent shortage of properties which currently exists in most places means that there are simply not sufficient suitable properties available for people to move into in order to use existing stock effectively. In conjunction, local authorities and housing associations should develop policies and incentives to encourage tenants to move into suitable smaller properties and then to reflect the need for such properties when developing new stock.

63.  We welcome the Government's recent announcement that serving members of the armed forces and families with children with certain disabilities would be exempt from Social Sector Size Criteria (SSSC). The Government should now look at the impact of SSSC on people with disabilities and parents who care for children part-time.


37   For example, see Ev 44, para 2.2 [National Housing Federation]. Back

38   Q 200 Back

39   DWP, www.dwp.gov.uk/newsroom/ministers-speeches/2011/14-09-11.shtml  Back

40   Ev 44, para 1.4 [National Housing Federation], Ev w42, para 6 [British Property Federation], Ev 74, para 4.1 [Residential Landlords Association], Ev 83, para 3.6 [Citizens Advice] and Ev 88 [Shelter] Back

41   Ev 46, para 3.27, and DWP press release, 30 October 2012, www.dwp.gov.uk/newsroom/press-releases/2012  Back

42   Ev w16, para 6.2 [London Councils] Back

43   Ev 45, para 3.2, and Policis, Optimising welfare reform outcomes for social tenants: Understanding the financial management issues for different tenant groups, www.housing.org.uk/publications  Back

44   Ev 74, para 4.4 Back

45   Ev 74, para 4.1 Back

46   Ev w16, para 6.2 Back

47   As above Back

48   Ev 45, paras 3.7 and 3.8 Back

49   DWP, www.dwp.gov.uk/newsroom/ministers-speeches/2011/14-09-11.shtml Back

50   Ev 95, para 59 [DCLG] Back

51   HC (2012-13) 576, para 243 Back

52   Ev w66 Back

53   Ev w51, para 1.3 Back

54   Ev 45, para 3.1 Back

55   For example, see Ev w18, para 16 [East 7] and Ev w51, para 1.3 [Circle Housing Group] Back

56   DWP, www.dwp.gov.uk/policy/welfare-reform/housing-support/  Back

57   Q 205 Back

58   As above Back

59   DWP, Government response to the House of Commons Work and Pensions Select Committee's third report of session 2012-13: Universal Credit implementation: meeting the needs of vulnerable claimants, Cm 8537, February 2013 Back

60   DWP, speech by Lord Freud, Minister for Welfare Reform, www.dwp.gov.uk/newsroom/ministers-speeches/2011/14-09-11.shtml; see also DWP, www.dwp.gov.uk/policy/welfare-reform/housing-support/. Back

61   Q 209 Back

62   Ev w58, para 6.3 [The Riverside Group], Ev 72 [The Welfare Reform Club] and Ev 77 [Wakefield District Housing] Back

63   Ev 72 Back

64   As above Back

65   Ev w41 Back

66   For example, see Ev w3, para 29 [National Landlords Association], Ev w62 [Rochdale Council]. Back

67   Ev w3, para 29 Back

68   Ev 74, para 3.0 Back

69   Ev w3, para 27 Back

70   Ev w3, para 28 Back

71   Ev 44, para 1.2 [National Housing Federation], Ev w18, para 10 [East 7], Ev w58, para 6.1 [The Riverside Group] and Ev w29, para 3.4 [Southwark Council] Back

72   Ev 44, para 1.4 [National Housing Federation], Ev 74, para 4.1 [Residential Landlords Association] and Ev 83, para 3.6 [Citizens Advice] Back

73   Ev 44, para 1.2 [National Housing Federation], Ev w44, para 22 [British Property Federation], Ev 77, para 3.2.1 [The Hyde Group] and Ev w3, para 21 [National Landlords Association] Back

74   Ev w44, para 22 Back

75   Ev 77 [Wakefield District Housing] and DWP, Direct Payment Demonstration Project: Payment figures, December 2012, p 16 Back

76   Ev w64, para 5b [Leeds City Council], Ev w88 para 10.1-2 [Liverpool City Region Child Poverty and Life Chances Commission] and Ev 68 [Blackpool Council] Back

77   Ev w64, para 5b Back

78   Ev w88, para 10.1-2 Back

79   Ev 68 [Blackpool Council] Back

80   "New financial products to help Universal Credit claimants manage money", DWP press release 17 September 2012 Back

81   As above Back

82   Ev 46, para 3.23 Back

83   DWP, Direct Payment Demonstration Project: Payment figures, December 2012, p 3 Back

84   As above Back

85   Q 217 Back

86   DWP, Direct Payment Demonstration Project: Payment figures, December 2012, p 4 Back

87   As above Back

88   Q 142 Back

89   DWP, Direct Payment Demonstration Project: Payment figures, December 2012, p 7 Back

90   As above Back

91   DWP, Direct Payment Demonstration Project: Payment figures, December 2012, p 9 Back

92   DWP, Direct Payment Demonstration Project: Payment figures, December 2012, p 15 Back

93   DWP, Direct Payment Demonstration Project: Payment figures, December 2012, p 7 Back

94   DWP, Direct Payment Demonstration Project: Payment figures, December 2012, p 11 Back

95   DWP, Direct Payment Demonstration Project: Payment figures, December 2012, p 15 Back

96   DWP, Direct Payment Demonstration Project: Payment figures, December 2012, p 5 Back

97   DWP, Direct Payment Demonstration Project: Payment figures, December 2012, pp 8 and 12 Back

98   DWP, Direct Payment Demonstration Project: Payment figures, December 2012, p 15 Back

99   Ev w29, para 3.4 Back

100   Ev 82 Back

101   Ev 90, para 6 Back

102   As above Back

103   Ev w57, para 4.1 [The Riverside Group], Ev 50 [Chartered Institute of Housing], Ev w26, para 5.2 [Chartered Institute of Public Finance and Accountancy] and Ev 45, para 3.8 [National Housing Federation] Back

104   Ev w10, para 18 Back

105   Ev w10, para 20 Back

106   Ev w25, para 3.3.c Back

107   Communities and Local Government Committee, Eleventh Report of Session 2010-12, Financing of New Housing Supply, HC 1652, para 70 Back

108   DCLG, Government response to the Committee's Eleventh Report of Session 2010-12: Financing of New Housing Supply, Cm 8401, July 2012, p 7 Back

109   Ev w68 para 25 [Institute of Revenues, Ratings and Valuation], Ev 81-82 and Ev 83, paras 2.5 and 3.5 [Citizens Advice], Ev w122, para 2.3 [RNIB], Ev w21 16, para 4.1 [Core Cities Group], Ev w59 [Rochdale Council], Ev w56, para 2.3 [The Riverside Group], Ev w70, para 3.1.1 [Stockton-on-Tees Borough Council], Ev 78 [Wakefield District Housing], Ev w97 [Hull City Council] and Ev w86, para 4.1 [North West Landlords Association]  Back

110   Ev 89, para 2 [DCLG] Back

111   As above Back

112   Ev 46, para 3.26 [National Housing Federation], Ev w14, para 2.1 [London Councils], Ev w29, para 3.4 [Southwark Council] and Ev w79 [West Midlands Metropolitan Councils] Back

113   Ev w70 para 3.2.1 Back

114   HC (2010-12) 1652, p 68 ff Back

115   HC (2010-12) 1652, para 26 Back

116   HC (2010-12) 1652, para 32 Back

117   HC (2010-12) 1652, para 40 Back

118   HC (2010-12) 1652, para 41 Back

119   HC (2010-12) 1652, para 60 Back

120   HC (2010-12) 1652, para 73 Back

121   HC (2010-12) 1652, para 87 Back

122   HC (2010-12) 1652, para 86 Back

123   HC (2010-12) 1652, paras 93-96 Back

124   HC (2010-12) 1652, para 101 Back

125   HC (2010-12) 1652, para 103 Back

126   HC (2010-12) 1652, para 106 Back

127   HC (2010-12) 1652, paras 107, 110, 147 Back

128   Ev 90-91, para 11 Back

129   As above Back


 
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Prepared 3 April 2013