Chancellor announces £1.5bn package to improve Universal Credit

westminster-parliamentThe UK government has announced significant changes to Universal Credit including scrapping the seven day waiting period before a person can apply.

In the Autumn Budget announcement yesterday Chancellor Philip Hammond responded to the increasing pressure from MPs, charities and the housing sector by outlining a package of measures set to cost the government £1.5 billion.

These include scrapping the seven day waiting period before a person can apply for Universal Credit which will take the total wait down to five weeks.

Households in need who qualify for Universal Credit will be able to access a month’s worth of support within five days, via an interest-free advance, from January 2018. This can be repaid over 12 months instead of six.

Claimants will be eligible for Universal Credit from the day they apply, rather than after seven days, while any claimant who receives housing benefit will be able to claim it for a further two weeks after they have applied for Universal Credit.

Low-income households in areas where private rents have been rising fastest will receive an extra £280 on average in housing benefit or Universal Credit.

The Scottish Federation of Housing Associations (SFHA) gave a cautious welcome to the measures aimed at addressing Universal Credit’s failings, which it argues are having devastating effects on some of the poorest and vulnerable people.

Sally Thomas

Sally Thomas

SFHA chief executive, Sally Thomas, said: “We are disappointed that the Chancellor did not use (yesterday’s) Budget to announce the halt of the roll-out of Universal Credit until its failings are resolved. The slow-down of the roll-out, with completion deferred from September 2018 to December 2018, is inadequate. There needs to be a pause in the roll-out until the DWP can give reassurances that its processes are firmly embedded and working as they should.

“While we cautiously welcome the £1.5bn package to address issues with the delivery of Universal Credit, we are concerned about the effects the policy will continue to have on new claimants until the new measures are brought in – with changes to advance payments only being introduced in December and the seven-day wait period not being scrapped until February 2018. (Yesterday’s) announcement will also bring little comfort to the people who are already in debt and facing real financial hardship due to the policy.

“We will need to see the detail of how these new measures work in reality and whether they address Universal Credit’s current devastating effects.”

Chancellor Phillip Hammond also announced a £44bn housing package through loans, guarantees, and capital funding.

Ms Thomas added: “Again, we will need to wait for the detail on the £44bn announced for housing in England and see if this will have any consequentials through the Barnett Formula for the Scottish social housing sector.”

gavin-smart

Gavin Smart

Gavin Smart, deputy chief executive at the Chartered Institute of Housing (CIH), said the measures will help people suffering as a result of the delays.

He said: “We know that Universal Credit is causing significant hardship and that the lengthy waiting time for the first payment is a significant problem.”

Mr Smart added: “We hope to see further progress on some of the other issues affecting Universal Credit claimants, including administrative delays and lack of information. CIH wrote to the Department for Work and Pensions to express our concerns back in July and in particular we are urging the government to slow the roll-out down so that it can make sure it gets this vital reform right.”

Helen Moore

Helen Moore

Helen Moore, chair of the Glasgow and West of Scotland Forum of Housing Associations, said: “Whilst the announcement goes only part way to introducing the changes so many bodies have been calling for, they are welcome in principle. A system based on the right to claim an advance payment within five days will work only if it is highly efficient.

“This is hardly what we’ve come to expect of Universal Credit up till now, so time will tell whether this change can actually be delivered.”

Housing and homelessness charity Shelter Scotland highlighted the Budget’s failure to the failure to lift the freeze on local housing allowance for private renters.

Graeme Brown

Graeme Brown

Graeme Brown, director of Shelter Scotland, said: “This budget contained significant funding for new home building which is welcome. We now wait to see details of the level of the extra funding for Scotland and hope the Scottish Government will use this new money to focus on homelessness prevention and further its ambition on affordable house building.”

Graeme Brown added: “Getting rid of the 7-day waiting period before people can claim and extending the repayment period for advances is welcome, however, Universal Credit is still flawed and needs to be halted and fully fixed before being rolled-out further.

“We welcome the Targeted Affordability Fund for those living in areas where the gap between housing benefit and private rent is highest. But, by failing to remove the freeze on local housing allowance for private renters, things can only get worse for many thousands of people in Scotland who we know are already struggling to pay their rent, running up arrears and facing an increased risk of homelessness.”

Citizens Advice Scotland (CAS) also welcomed the reforms but added that it will continue to seek more changes to the welfare policy.

Rory Mair

Rory Mair

CAS chair Rory Mair said: “We welcome today’s announcement that the government is to reform Universal Credit by reducing the waiting period and making a number of other changes.

“Taken together, these measures will make a real difference to those claimants who are currently experiencing hardship. This shows that the government is listening to the concerns raised by the Citizens Advice network and others, and is willing to respond constructively.

“We would urge that the changes be introduced as quickly as possible however, so that claimants do not have to go for long periods of time without income. There are also other problems with Universal Credit which we believe still need to be addressed, and we will continue to press for these changes.

“But for today, we welcome these significant changes and we urge the government to implement them as swiftly as possible.”