Social landlords in Scotland are likely to experience significant financial pressures as a consequence of changes to the benefit system – according to research from Mobysoft, a provider of rent collection software to the social housing sector.
The study – which covered around one third of the UK’s social housing stock, and builds on previous research conducted by the credit agency Moody’s – found that rent being collected directly from tenants by housing officers in Scotland will increase by 64.6%, on average, following the full roll-out of Universal Credit. Across Scotland, this will equate to officers needing to collect an additional £655m each year. You can read the full report by following this link.
The average increase in rent collection across England, Wales and Scotland was 63.1%, which equates to an additional £7.268bn being collected each year, following the full roll-out of Universal Credit.
The likely increase in financial pressure has led to concerns that social landlords will be required to cut social programmes, reduce housing developments, or refuse to accept new housing tenants deemed ‘too risky’.
Jan Goode, neighbourhood director at Housing Plus Group, said: “Housing associations now face a tough dilemma because we no longer have the ability to say yes to everything. We will need to think hard about where we put our resources as 100% of our income comes from rent. We also know it can take three times as much work to get a Universal Credit customer into a paying cycle. This will inevitably reduce the amount of support it is possible to give to programmes offered to other groups of customers – those people who are just about managing.
“Previously, we have provided those tenants with broader learning programmes, such as financial advice or life skills that help build confidence – but you’ll find social landlords will need to prioritise programmes that get people back into work and paying rent In order to sustain tenancies and their rental income streams.”
Derek Steele, chief executive at Mobysoft, said: “The roll-out of Universal Credit will actually provide housing officers with more opportunities to interact with tenants, which could allow them to offer vital signposting services and social programmes. However, the anticipated financial constraints will make it harder for them to fulfil that fundamental purpose of helping people most in need – and helping to create better neighbourhoods across the UK.
“We’re currently working with 95 social landlords in order to help them protect their revenues and mitigate the impact of welfare reform by using technology to improve efficiency.”
The study found that the managed rental income per officer (MIPRO) in Scotland will increase to £1.87m each year following the full roll-out of Universal Credit.
The full report is available on the Mobysoft website.