National Audit Office report echoes SFHA concerns over Universal Credit

Sally Thomas

A highly critical report on the Department for Work and Pensions’ (DWP’s) progress in implementing Universal Credit (UC) echoes many of the concerns that have been consistently raised by the Scottish Federation of Housing Associations (SFHA), its chief executive has said.

Publishing its report last week, the National Audit Office (NAO) concluded that UC may cost more than the benefit system it replaces, it will never be able to measure whether it has been directly responsible for increasing employment, it is uncertain whether UC ever has or ever will deliver value for money and there is a hugely negative impact on many of those who rely on it, with 113,000 new claimants failing to get their full payment on time during the course of last year.

Of all its shortcomings, the worst is the high number of claimants that were not paid their entitlement on time, leading to problems with debt, including rent arrears, as well as reliance on foodbanks to get by; in March 2018, 21% of new claimants did not receive their full entitlement on time, with 13% receiving no payment at all. Despite the DWP’s expectations that most claimants would have enough money of their own to cope over the initial waiting period, 60% need an advance loan to help them manage, which then has to be repaid over the year.

Local authorities, housing associations and cooperatives and third sector organisations have reported additional costs in helping people cope with UC, but the DWP has no way of assessing the financial impact that the implementation is having.

The report concludes that, as it would be so costly and complex to return to legacy benefits, there is no practical alternative but to carry on with UC; but “the Department must now ensure that the programme does not expand before business-as-usual operations can deal with higher claimant volumes”.

SFHA chief executive, Sally Thomas, said: “This report echoes and vindicates the call by the SFHA and other organisations to pause the rollout of UC until its processes can be fixed to cope with the huge increase in numbers of tenants we are expecting will need support.

“The number of households in the social rented sector receiving housing costs is still barely above 10% of the total that will eventually move over to UC, but, even with that low number, our members are hard pushed to provide the necessary support.”

The SFHA, along with its sister organisations in England, Wales and Northern Ireland, said it will set out Five Asks for changes that need to be made.

These are:

  • Allowing support workers in housing associations and advice agencies to intercede with the DWP to help ensure that claimants received their proper entitlement and were not left destitute. Known as “implicit consent”, this protocol has worked successfully for older type benefits.
  • Synchronising the payment system of direct payments with claimants own UC payments to help prevent unnecessary arrears build-up; if the landlord were to receive direct payment the same day as the tenant was paid their Universal Credit, both parties would be able to manage their budgets far more efficiently.
  • Overhauling Universal Support delivered locally, which supports claimants with issues such as digital access and budget advice, to provide a consistent quality of service across the country
  • Restoring benefit entitlements to large families to prevent serious debt and family break-up
  • Providing transitional protection to those moving over to Universal Credit from legacy benefits.
  • Sally Thomas added: “Ever since the introduction of welfare reforms the SFHA has sought to establish an effective and positive working relationship with the DWP and we will continue to do what we can in the best interests of our members and their tenants. We appreciate that the department is under huge pressure to deliver the system, but it must never be allowed to disregard the human cost of the decisions it makes.”

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