SFHA repeats call for Universal Credit pause

Sally Thomas

Secretary of state for work and pensions Esther McVey MP will face further calls to pause Universal Credit when she appears before the Scottish Parliament’s social security committee today.

The Scottish Federation of Housing Associations (SFHA) has urged the minister to delay the full introduction of the benefit to allow time for vital system improvements to be made.

The Federation’s call follows the announcement that system changes to allow the ‘bedroom tax’ to be abolished at source in Scotland will be delayed by over a year until at least May 2020.

Under the Scotland Act 2016, the ability to vary the housing element of Universal Credit was devolved to the Scottish Parliament, with the Scottish Government committing to using these powers to fully abolish the ‘bedroom tax’ at source. Negotiations had been taking place with the DWP, with the hope that systems would be in place by April 2019 ahead of the managed migration of all claimants still receiving the old legacy benefits to Universal Credit, currently planned to start in July 2019.

Sally Thomas, SFHA chief executive, said: “Dealing with Universal Credit and ‘bedroom tax’ mitigation has been a huge challenge for housing associations and co-operatives as well as their tenants. The problem stems from the split of responsibilities: calculation of liability for the ‘bedroom tax’ lies with the DWP and calculation of Discretionary Housing Payment entitlement to mitigate the ‘bedroom tax’ lies with local authorities. With Housing Benefit, this is not such a problem as responsibility for both parts lies with local authorities, and the process is practically seamless.

“At present, there are still comparatively few tenants on Universal Credit but, even so, it is understood that local authorities are finding data sharing problematic, which makes the accurate assessment of entitlement to Discretionary Housing Payments a challenge, with a greater chance of tenants not receiving the right money and housing associations tied up in having to unravel incorrect assessments. Abolishing the ‘bedroom tax’ at source is essential, as it will bring the calculation of entitlement back under one roof – the DWP’s.

“There is also the issue of scale. Back in November 2017, there were under 22,000 households in social housing receiving Universal Credit housing costs. By comparison, there were 234,000 households in social housing receiving Housing Benefit. The vast majority of these households on Housing Benefit are expected to move over to Universal Credit in a managed migration between July 2019 and 2022. The switch from using Discretionary Housing Payments for mitigating the ‘bedroom tax’ to its full abolition needs to be completed beforehand. Without the switch, the managed migration could be extremely challenging; to try to make the switch in 2020, when in the middle of moving so many households over to the new system, is fraught with difficulty.

“The secretary of state for work and pensions Esther McVey MP is to appear before the Scottish Parliament Social Security Committee on 16 April, and I am sure the opportunity will be taken to raise these concerns.”