Communities and Local Government CommitteeWritten evidence from the Department for Communities and Local Government

Introduction

Why reform the Welfare System?

Public spending was out of control and the deficit needed to be reduced. Welfare spend is the single biggest Government expenditure. In 2010, the Welfare Bill was £192 billion, of which Housing Benefit was approximately £23 billion having doubled over the period from 1997.1 This needed to be addressed. In addition people on benefits did not have to make the same lifestyle decisions as those in low paid work. The system needed to change to make it fair.

There are currently more than 30 benefits and tax credits available to people who are on low incomes: this complexity makes claiming support difficult, unpredictable and seriously undermines work incentives. In addition people on out of work benefits have no incentive to do work of more than 16 hours a week as their earnings are deducted pound for pound from their benefit after a small disregard.

The Government is reforming the benefits system so that it:

is fairer and more affordable;

more effectively tackles poverty and worklessness; and

strengthens work incentives and promotes personal responsibility.

CLG Select Committee Questions and Answers

1. How effectively are the Department for Work and Pensions and the Department for Communities and Local Government working together to implement Welfare Reform?

1. The Government and the devolved administrations are working closely and effectively together to implement Welfare Reform. DWP leads on Welfare Reform (with the exception of Council Tax Support localisation) and continues to work across Government and with local authorities—both directly and through the Local Government Association (LGA), the Convention of Scottish Local Authorities (COSLA) and the Welsh Local Government Association (WLGA)—as well as with other partners such as housing associations and Voluntary and Community Sector organisations on design and implementation.

2. Prior to Universal Credit coming in to force there are a range of reforms to the current system. These include:

Local Housing Allowance reform. From April 2011, the rates of Local Housing Allowance were reduced and capped to restore fairness to the system. The changes to Local Housing Allowance make it simpler for claimants to understand and easier for people to plan for the future when they know the maximum amount of Housing Benefit that will be available for a whole year ahead. Local Housing Allowance Rates will be up-rated by the Consumer Price Index as announced in the Emergency Budget 2010. For the following two years (2014–15 and 2015–16) increases will be capped at 1%, in line with other benefits. 30% of the savings associated with this measure—£45 million in 2014–15 and £95 million in 2015–16—has been set aside to increase the local housing allowance rates in areas where rent increases are causing a shortage of affordable accommodation.

The Social Sector Size Criteria. From April 2013 Housing Benefit will be reduced by 14% for working age households if they under occupy by one bedroom in the social sector and 25% if they under occupy by two or more bedrooms. By doing this, we will encourage claimants to take responsibility for their financial decisions and support landlords to make the most efficient use of their stock.

The Benefits Cap. From April 2013, this will set an upper limit on the amount of benefits a working-age household can receive. This will promote fairness in the benefits system whilst reducing the burden on the state.

Social Fund reform. From April 2013 funding is being provided by the Government to provide a new local welfare provision. This allows local authorities to take the lead on developing tailored support based on their communities’ needs.

Council tax support localisation. Council tax benefit expenditure in England increased from £2 billion to £4.3 billion from 1997–98 to 2010–11. Our reforms will localise Council Tax support and give councils stronger incentives to support local firms, cut fraud, promote local enterprise and get people into work. Council Tax Benefit will be replaced with a new localised scheme with a 10% reduction. This will be ready (including all regulations, guidance and amendments, together with all appropriate data sharing and grant agreements in place) for local authorities to have viable schemes in place by the end of January 13 for their implementation on 1 April 2013.

3. These reforms will be followed by the introduction of Universal Credit. Phased in from October 2013, Universal Credit will help claimants and their families to become more independent and will simplify the benefits system by bringing together a range of working-age benefits into a single streamlined payment. The new Universal Credit system aims to:

improve work incentives;

smooth the transitions into and out of work;

support a dynamic labour market;

simplify the system, making it easier for people to understand, and easier and cheaper for staff to administer; and

reduce in-work poverty and cut back on fraud and error.

4. Implementation of all of these reforms is on track. There is close working within Government between DWP and DCLG (and other departments), and between the Government, the devolved administrations, local authorities and the Voluntary and Community Sector. Examples of this close and effective working include:

Joint commissioning between DWP and DCLG of the independent evaluation of the Local Housing Allowance reforms. This reported first in Summer 2012 and will be followed up with a secondary report in Spring 2013 prior to the implementation of the reforms.

DCLG and DWP working together and with a small group of social landlords and the Making Better Use of Stock team within the Chartered Institute of Housing to understand the issues landlords face, to assess the likely impacts, and explore how to mitigate potential areas of stress. This included producing a toolkit on the social sector size criteria “Making it Fit” which was published in June this year.

Planning for the implementation of the benefit cap where the project team in DWP is meeting and working closely with colleagues across Government prior to the implementation of the cap from April 2013. There are representatives from DCLG, the Local Government Association, Welsh Local Government Association and local authorities on the Senior Stakeholders Board. In addition, DWP has organised meetings to raise awareness of the employment support available for benefit cap claimants and with DCLG homeless advisers to consider closer working with Jobcentre Plus homeless advisers.

Careful work by DWP, DCLG and the Devolved Administrations on council tax support and localised welfare provision to ensure the timetable for legislating to end the current DWP-led schemes is aligned to the arrangements being made within DCLG and the Devolved Administrations.

Establishing the Government’s approach to subsidy allocations to English local authorities in respect of local council tax support administration costs, drawing on discussions with local authorities. Subsidy allocations in respect of local authorities in Scotland and Wales will be matters for the Scottish and Welsh Governments.

DWP and DCLG’s joint work to ensure the right data-sharing gateway to provide relevant information from Universal Credit claims and that the IT systems are in place to support this. Regulations to allow data sharing under the Welfare Reform Act are expected to be laid December and come into force in January, to help local authorities with the transition to the localised replacements of Council Tax Benefit and the Social Fund.

5. There is also strong partner involvement in the Universal Credit programme where DWP works closely with DCLG, the Local Government Association and its counterparts in Scotland and Wales, the Convention of Scottish Local Authorities and the Welsh Local Government Association. These organisations and individual local authorities are part of working groups convened by DWP to assist with planning and delivery of Universal Credit.

6. There is also live testing through DWP and DCLG working with six local authorities and housing partnerships who are testing the payment of Housing Benefit directly to working age claimants in the social sector. The Universal Credit Direct Payment Demonstration projects are 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. This is in advance of the introduction of direct payments to tenants as part of Universal Credit. Learning from the projects is feeding into the design of Universal Credit.

7. In October 2012 the Government launched 12 Local Authority2 led pilots to test the kind of services needed to support those who need additional help to access the full breadth of Universal Credit services. The services being piloted include: digital inclusion, financial and budgeting support, face to face services, access to work, customer support, and rural aspects. The pilots are due to finish in September 2013 and the ongoing learning and evaluation will help inform the Universal Credit Pathfinder, scheduled for launch in April 2013, and the further roll out of Universal Credit from October 2013.

8. The Government recognises that some claimants will need additional help, advice and support provided by services at the local level. Therefore, DWP officials have set up a Task Force in collaboration with DCLG and local authorities to incorporate these services into a strategic framework. This Task Force has now begun its work and is expected to produce an integrated localised claimant support framework in January 2013. It will build on the work already carried out on aspects of the design of face-to-face services, financial inclusion, budgeting support, partnership working, funding and the role of the third sector.

2. Is the guidance available to local authorities from central Government on implementing welfare reform adequate? Are there areas where more or better guidance is required?

9. The Government where relevant has provided guidance to support the implementation of welfare reforms.

10. The DWP has provided guidance and communication materials on the Local Housing Allowance changes, and has also run a number of awareness sessions for local authorities.

11. Guidance has been issued by DWP to local authority staff on how to apply the Social Sector Size Criteria. The guidance includes model letters and leaflets to aid local authorities in publicising these changes and is available on the DWP website. DCLG is providing funding to support an action team within the Chartered Institute of Housing to provide practical support to help landlords tackle under-occupation. This included producing a toolkit on the social sector size criteria “Making it Fit” which was published in June this year.

12. Detailed Benefit Cap guidance and communications material have been issued to local authorities and additional guidance is planned for issue prior to Universal Credit implementation from April 2013. This includes:

Housing Benefit/Council Tax Benefit General Information Bulletins currently being prepared for issue in January 2013;

Presentations undertaken at various conferences and events;

Welfare Reform events in Wales and Scotland; and

Benefit cap project support provided at national and regional Institute of Revenue Ratings and Valuation conferences.

13. Specifically to support local authorities in the introduction of local council tax support schemes the Government has:

Announced and paid out £30 million of initial funding to help meet the costs of planning and analysing draft schemes—for both billing and precepting authorities;

Announced an additional £100 million to encourage best practice and support those councils who are looking across all of their options for finding savings, to ensure that the poorest in their area do not face a large reduction in support;

Provided a free online calculator, to help local authorities analyse the potential impacts of their proposed schemes;

Published a statement of intent, setting out the details of what will be covered in secondary legislation; and

Published guidance, developed with DWP, to ensure that local authorities understand their existing responsibilities in relation to vulnerable groups and setting out the general principles of supporting work incentives to help local authorities to design support.

14. DCLG has also:

Hosted two events in August and November for local authorities to come together to discuss a range of issues including where they are with consulting on their schemes;

Provided local authorities with policy updates by email to Chief Finance Officers, and

Published detailed FAQs on the eligibility criteria for the additional transitional grant.

15. There are no plans for new guidance for the Social Fund because it is not being replaced. Payments for maternity, heating and funeral expenses will continue. Some discretionary payments are being abolished and funding for a new better targeted local provision is being given to local authorities in England and the Scottish and Welsh Governments. Details of the funding for this new local provision have been accompanied by a settlement letter which provides clarity on the purpose of the funding.

16. Following the announcement of Universal Credit, the Government is taking forward a series of nation-wide events that will help to prepare local authorities for the business changes required, following these events more in depth support will be provided to those local authorities who require it.

17. This will also be supported by further details around the October 2013 launch of Universal Credit and how this will impact upon local authorities. It is right that the Government carefully considers the impacts of the local authority pilots and the Direct Payment Demonstration projects before finalising our guidance to local authorities.

18. Some claimants will need additional help, advice and support to access Universal Credit. The Government is taking forward urgent work around the development of the service provision for these people and will produce an integrated localised claimant support framework in January 2013. It will build on the work already carried out on aspects of the design of face-to-face services, financial inclusion, budgeting support, partnership working, funding and the role of the third sector.

3. Is the Government’s timetable for implementing Welfare Reform achievable?

19. The Welfare Reform Act 2012 made provision for the most broad-ranging and fundamental reforms of the welfare system since the 1940s. The timetable for implementation spans a number of years to allow sufficient time for preparation by local authorities and claimants.

20. Reforms to Housing Benefit paid to people in the private rented sector were staggered. Changes were introduced for new claimants in April 2011 but those who were existing Housing Benefit claimants in April 2011 received a nine months transitional period. In January 2012, the Shared Accommodation Rate of Housing Benefit for single childless people was extended to the age of 34 (from 25), limiting the amount of Housing Benefit they can claim.

21. Two further reforms will be introduced in April 2013: The Benefit Cap, which caps the total amount of benefit a household can receive at the national average earnings (approx £26k); and the Social Sector Size Criteria, which restricts Housing Benefit for working-age customers living in the social rented sector who are occupying a larger property than their household size requires. These reforms were first proposed as part of the Comprehensive Spending Review in 2010 giving those who are affected almost three years to prepare. DWP has written to all those at the risk of capping from the Overall Benefit Cap.

22. In devolving new responsibilities and funding to local Government—for council tax support and localised welfare provision—DWP has been working closely with DCLG and the Devolved Administrations to ensure our timetable to end the current DWP-led schemes is aligned to the arrangements being made within DCLG, the Devolved Administrations and Local Authorities. In relation to local council tax support schemes, local authorities are getting on with designing and implementing their local schemes and IT suppliers are taking forward work to design and test systems. This is encouraging progress. Currently, over 300 local authorities in England have consulted on draft local schemes, and at least 278 have completed this process.

23. Further ahead, October 2013 to 2017 will see the phased introduction of Universal Credit and the Personal Independence Payment. Both programmes have been carefully designed to avoid a big-bang approach and will be extended gradually to different claimant groups over several years. Universal Credit will launch a Pathfinder in April 2013 for new claims from a small subset of the unemployed caseload in the North West of England (Tameside, Oldham, Wigan and Warrington). From October 2013 Universal Credit will be introduced more widely beginning with new claims and natural migrations. DWP is working with local authorities on the precise migration timing schedule for the final geographic migration phase, prioritising safe closure of Housing Benefit teams.

4. Are local authorities being allocated sufficient resources to deliver services such as localised council tax support and advice to claimants on Universal Credit?

24. The Government is committed to ensuring that any reforms do not place an extra burden on local authorities and will meet our obligations under New Burdens Doctrine. New Burdens funding will be provided through an appropriate mechanism in time for the 201213 transfer and through Supplementary Estimates for 201314 transfers. DCLG and HMT are working with DWP to ensure that the new burdens implications of the Welfare Reform programme are accurately assessed and properly funded.

25. The Government is working with local authorities to assess the net impact of housing benefit centralisation and localisation of support for council tax, including the transitional costs of moving to the new arrangements. Funding for administration will be treated separately from funding to meet the new burdens costs on local authorities of delivering the requirements of localised council tax support. New burdens finding £30 million was allocated in April 2012, and this will followed by further funding for billing authorities for 2013–14, the details of which will be announced in the Local Government Finance Settlement. This is in addition to the ongoing administrative subsidy paid by DWP.

26. Local authorities will be allocated funding to enable them to offer support for council tax. Funding will be provided via the retained business rates system for local authorities and fire and rescue authorities, and through a direct grant to local policing bodies. Provisional allocations were published in a consultation on funding which issued earlier this year. Final allocations will be published as part of the local Government finance settlement.

27. Local authorities will have choices about how they manage the reduction in funding. They will be able to choose whether to pass the reduction on to council tax payers, using the flexibilities over council tax or manage the reduction within their budgets, driving down fraud and error and finding efficiencies.

28. On 16 October 2012, Ministers announced an additional £100 million of transition funding for councils to help support them in developing well-designed council tax support schemes and maintain positive incentives to work. This grant is intended to provide some headroom for those authorities who are looking across all of their options for finding savings to ensure that those currently in receipt of support do not face a large reduction in support.

29. The Universal Credit programme has adopted a common approach and methodology to business change impact analysis for all the delivery partners (DWP, HMRC and local authorities) but a differing approach to engaging local authorities in this effort was required in recognition of their unique position—local authorities are three hundred and eighty diverse, disparate and effectively independent businesses across the UK.

30. Local authority business change impact analysis will provide an essential underpinning to local authorities business planning and ultimately assurance as to their readiness before Universal Credit begins to roll out nationally from October 2013. Having consulted with local authority representatives engaged in the programme we developed a strategy that provides for a series of regional local authority business change impact analysis events that will be co-sponsored and supported by the national and regional local authorities’ associations and other recognised local authority representative bodies.

31. The aim of these events is to engage local authorities in respect of business change impact analysis for purposes of the national rollout phase, but they will also serve to engage local authorities in business change impact analysis as a continuing key activity throughout the period of transition. Sixteen regional events have been scheduled from October 2012 to January 2013 so that we may capture an initial picture of Universal Credit business changes impacts for local authorities. A number of events have already taken place and the level of local authority engagement has been good. A number of business change impact analysis returns have already been received from local authorities in England and Scotland and these formed the basis of a new burdens assessment in respect of local authorities business change for 2013–14. Future iterations of business change impact analysis will inform funding assessments for future years in the transition period.

32. In addition, the Government recognises that some claimants will need additional help, advice and support provided by services at the local level. Therefore, officials have set up a Task Force in collaboration with local authorities to incorporate these services into a strategic framework.

33. This Task Force has now begun its work and is expected to produce an integrated localised claimant support framework in January 2013. It will build on the work already carried out on aspects of the design of face-to-face services, financial inclusion, budgeting support, partnership working, funding and the role of the third sector. These services will be funded but the full resource implications will be explored when the details have been further developed.

5. Are there financial risks to local authorities from Welfare Reform changes? Are such risks being adequately addressed?

34. In line with New Burdens Doctrine[1] the Government has agreed the process and timetable for assessing new administrative burdens on local authorities arising from our welfare reforms. Similar engagement is taking place with the Devolved Administrations. The agreed “new burdens” for which we will compensate local authorities are related to: Housing Benefit reform (inc. Local Housing Allowance changes and Social Sector Size Criteria); Local Welfare Provision (following abolition of elements of the discretionary Social Fund); Universal Credit/Pension Reform; Benefit Cap; and Fraud and Error programme.

35. The Government recognises that local authorities may incur one-off costs associated with decommissioning housing benefit services and is working with local authorities to understand these impacts so that we may meet our obligations under New Burdens Doctrine.

36. New Burdens funding for 201213 will be provided through grant and 201314 through Main Estimates.

37. Separately, DCLG is taking forward work to assess the new burdens resulting from the localisation of council tax support. An initial £30 million has already been paid out. This will followed by further funding for billing authorities for 2013–14, the details of which will be announced in the Local Government Finance Settlement. This is in addition to the ongoing administrative subsidy paid by DWP.

38. The Government recognises that some claimants will need additional help, advice and support provided by services such as face-to-face advice, financial inclusion and budgeting support, at the local level. Therefore, DWP officials have set up a Task Force in collaboration with DCLG and local authorities to incorporate these services into a strategic framework. This Task Force has now begun its work and is expected to produce an integrated localised claimant support framework in January 2013. It will build on the work already carried out on aspects of the design of face-to-face services, financial inclusion, budgeting support, partnership working, funding and the role of the third sector. These services will be funded but the full resource implications will be explored when the details have been further developed.

39. Over this spending period the Government has increased the Discretionary Housing Payment to £370 million specifically to help mitigate the impact of welfare reforms. This is a discretionary pot of money allocated to local authorities to support families facing particular housing hardship challenges. It is allocated through the Housing Benefit subsidy regime and is therefore ring fenced but local authorities have discretion to administer it in a way that suits the authority and local area.

6. What impact have Welfare to Work schemes had, or are likely to have, on the numbers of benefit claimants?

40. This Government has implemented a number of large scale and necessary reforms to reduce benefit dependency. Interventions are based on “activation” which means placing conditions upon receipt of benefit. This is supplemented by the provision of employment advice and support for those who need it, and by voluntary or mandatory participation in schemes aimed to give experience of work.

41. Extensive evaluation by the UK and OECD shows that active labour market policies, such as jobsearch, lead to a quicker exit from benefit. The UK has a more active labour market regime than many EU countries and a better performing labour market.

42. Setting active job-search activities as the condition for receipt of unemployment benefits, and ensuring that jobseekers attend a face to face interview at least once a fortnight underpins welfare to work policy in the UK. The evaluation of the introduction of Job Seekers Allowance showed that introducing mandatory work search (as well as a number of other changes to benefit rules), monitored through Fortnightly Job Reviews had a short-term and a lasting effect on unemployment; it was estimated that there was a permanent reduction in the claimant count of 0.8 percentage points.3

43. Early evaluations of schemes introduced by this Government such as Work Experience and Mandatory Work Activity already show positive and promising results. Conditionality works best when underpinned by a sanctions regime and this Government has introduced a tougher regime which is simpler and clearer about the consequences of non-compliance.

44. The Government is committed to evaluation of employment programmes, including quantitative assessments of their impact on the numbers of people on benefits. These impact assessments are conducted in-house following a peer-reviewed methodology or are conducted by independent research organisations.

45. A consortium led by the Institute for Employment Studies (IES) has been commissioned to undertake an independent evaluation of the Work Programme, including an impact assessment. The evaluation will explore commissioning and delivery of the programme, and participants’ experiences and outcomes via a combination of qualitative research and surveys. The evaluation began reporting in November 2012, with regular reports through to a final synthesis report in 201415. All reports will be published on the DWP website at: http://research.dwp.gov.uk/asd/asd5/rrsindex.asp.

7. What evidence is there that local authorities are able to use effectively existing services or contracts for the delivery of new local Social Fund schemes?

46. We must be clear that local authorities are not delivering new local Social Fund schemes. Funding is being passed to them and the devolved administrations to provide new local welfare provision. This will allow them to give tailored, flexible support based on detailed knowledge of the issues they are facing in their communities. In order to support this transition, we have undertaken a wide range of engagement activities with approximately 150 local authorities who have outlined their plans to extend and develop existing services and contracts as part of their provision to help vulnerable people facing a crisis or short term unavoidable need. Engagement activities have included regional workshops, Local Government Association roundtable events, information exchange through the Social Fund reform webpage and inbox and the Local Government Association Knowledge Hub online forum.

47. Local authorities have indicated through these formats that they intend to use their existing services and providers in order to give the best help to vulnerable groups who might need support. Many are mapping their current service provision and intend to work with other local authorities to maximise these services and dovetail with other schemes.

8. How will the separation of the administration of Council Tax Benefit and Housing Benefit affect claimants?

48. Currently claimants may be prompted to apply for council tax benefit when they are applying for other benefits. Government departments are working together to ensure that data relating to claimants of current benefits and Universal Credit can be shared with local authorities to minimise the administrative burdens on both authorities and individuals wishing to claim council tax support.

49. From April, new claimants will be asked if they are interested in applying for a reduction of their council tax liability, but they will not be able to submit an application via DWP outlets. They will have to apply formally to their local authority for a reduction, but, because they will have provided information to DWP while claiming benefits, the local authority application process should not be onerous. It could be little more than confirming that they wish to apply and that the information they provided to DWP was correct. The relevant information will then be provided by DWP to the local authority.

50. Local authorities may decide to design schemes which require data which is not collected in relation to other benefits. In this case they will need to require this information directly from the claimant. As at present, schemes will need to make provision for means-testing for those people not in receipt of a qualifying “passporting” benefit. Currently there are only four such “passporting” benefits, of which three (income-related Job Seekers Allowance, Employment and Support Allowance and Income Support) are being phased out/replaced with Universal Credit. Currently pensioners may be prompted to apply for council tax benefit either whilst they are making a housing benefit application, or when they are applying for Pension Credit. People can of course apply independently as well.

51. DCLG will continue to work with DWP to ensure that similar prompts are in place under new arrangements where possible, and that Pension Credit assessments can continue to be provided by DWP to local authorities, to prevent duplication and aid efficiency.

52. In addition, DCLG has taken powers in the Local Government Finance Act to make transitional provisions in particular in connection with treating a person who is or was in receipt of council tax benefit. The Department has stated its intention to make regulations so that a person who is in receipt of council tax benefit immediately before 1 April 2013, or who has, prior to 1 April 2013, made an application for council tax benefit which has not been determined by 1 April 2013 is to be treated as having made an application for a reduction.

53. This will help local authorities to move claimants from council tax benefit to their local scheme without needing to require a new application to be made, again reducing the burden on both claimants and local authorities.

54. How local authorities choose to administer Localised Council Tax Benefit is a DCLG and Devolved Administration matter. The administration of Housing Benefit will continue to be carried out by local authorities under existing regulations and guidance and DWP liaison with local authorities on Housing Benefit matters will continue as now. DWP have also provided data sharing powers for local authorities to improve delivery of welfare services by local authorities. 

9. How significant an issue is housing benefit fraud under the proposed new system and what measures are being taken to address it?

55. Housing benefit (and welfare fraud in general) is a serious problem and the Government is absolutely committed to addressing it. However, to put this in context, Housing Benefit is the second highest benefit in terms of benefit expenditure (£22.8 billion), and as a percentage of this the level of fraud loss is one of the lowest across all the main means tested benefits (1.5%).

56. That said, the level of fraud is unacceptable which is why the plans outlined in our fraud and error strategy that was refreshed in a joint report with HMRC and the Cabinet Office in February 2012, and measures in the Welfare Reform Act, are necessary.

57. These plans include the new Single Fraud Investigation Service, which will be responsible for the investigation and prosecution of the totality of welfare benefit fraud. Initially the Single Fraud Investigation Service will be a partnership between DWP, HMRC and local authorities. Piloting work has started with an initial four pilots to test the design and the new ways of working. This is expected to be increased at a later stage once emerging findings are known. From the piloting activities the lower level design of the service will be drawn out. We are also working with partners on the Mobile Regional Taskforce pilots focusing on intelligence led campaigns in high fraud risk areas. The Welfare Reform Act 2012 provides for tougher powers to punish and deter welfare cheats. A tougher minimum administrative penalty was introduced in May 2012 and from 1 October a new civil penalty came into force for claimant error.

58. With the introduction of Universal Credit in 2013, the benefits system will also be made simpler and, as far as possible, the opportunities for fraud to enter our systems will be greatly reduced.

10. Are there sufficient safeguards to protect social landlords from financial harm resulting from the payment of housing benefit direct to claimants?

59. The Government is committed to developing Universal Credit in a way that protects landlords’ financial position. There will be the facility to pay housing costs directly to landlords within Universal Credit in some circumstances, for example if a tenant builds up a certain level of arrears. In addition, there will be a minority of claimants where alternative payment arrangements, known as a payment exceptions, may be required. These might include paying the rent directly to the landlord, making more frequent than monthly payments or splitting the payment within a household.

60. We are also working with six local authorities and housing partnerships who are testing the payment of Housing Benefit directly to working age claimants in the social sector. The Direct Payment Demonstration projects are 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. This is in advance of the introduction of direct payments to tenants as part of Universal Credit. Learning from the projects is feeding into the design of Universal Credit.

61. The Direct Payment Demonstration Projects officially went live at the end of June 2012 and will run for a year (until June 2013). An online Learning Network, hosted by the Chartered Institute of Housing, has been established to enable housing association and local authority staff to keep track of the projects, to share their learning and to exchange information and views about implementing direct payments with other interested parties.

December 2012

Reference

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1 http://research.dwp.gov.uk/asd/asd4/budget_2012_300712.xls

2 Bath and North East Somerset Council; —
<?oasys [ci ?> —  <?oasys [ix ?>Birmingham City Council;
<?oasys [ci ?> —  <?oasys [ix ?>Caerphilly County Borough Council;
<?oasys [ci ?> —  <?oasys [ix ?>Dumfries and Galloway Council;
<?oasys [ci ?> —  <?oasys [ix ?>London Borough of Lewisham;
<?oasys [ci ?> —  <?oasys [ix ?>Melton and Rushcliffe Borough Councils (as a partnership);
<?oasys [ci ?> —  <?oasys [ix ?>Newport City Council;
<?oasys [ci ?> —  <?oasys [ix ?>North Dorset District Council;
<?oasys [ci ?> —  <?oasys [ix ?>North Lanarkshire Council;
<?oasys [ci ?> —  <?oasys [ix ?>Oxford City Council (also a demonstration project area);
<?oasys [ci ?> —  <?oasys [ix ?>West Dunbartonshire Council;
<?oasys [ci ?> —  <?oasys [ix ?>West Lindsey District Council.<?oasys [ci ?>

3 http://research.dwp.gov.uk/asd/asd5/rrep116.pdf

Prepared 28th March 2013