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Universal Credit – starting near you soon

When we are children, it feels like Christmas never comes. Then when it arrives, we hope our joyful expectation is rewarded with presents, chocolates, good things. Well, it has felt very much like that with Universal Credit – it has been on the radar a very long time with very little happening, but sadly with no joyful expectation at the end! Landlords have dreaded it and hoped the delays may mean it would not be implemented – a vain hope.

Universal Credit - starting near you soon Landlord Knowledge

The reasons for the delays are many. IT systems needed to be updated to cope with the mass of on-line applications that it will eventually be expected to handle; additional training was required for JobCentre Plus staff who will become employment mentors under the new system; and the decision to move claimants onto Universal Credit gradually, whilst the system beds in and so that the experiences of the pathfinder areas could be considered and changes made. The cost of the process has been £700 million, so far.

From the many meetings I have attended, I felt I had a reasonably clear picture of what it would mean and have tried to re-assure landlords and property investors that whilst I can see the issues with it, a lot of time and thought has gone into trying to make it a success. It seemed my efforts were in vain though, when the Despatches programme on Monday evening went into the Bolton processing centre with an undercover reporter. The kindest comment would have to be that it was a shambles! IT systems going down, claimants waiting so long for benefit they had to rely on the food bank to stop them starving. The viewers were told that the highlighted cases had now been dealt with, so we can only hope these were bedding in issues.

The one certain thing is – it will continue. It is here now, with February seeing much of the North West coming on-line and new claimants finding themselves on Universal Credit. It will gradually spread through the country and currently, though a slower uptake than anticipated, it should be complete with everyone on Universal Credit by their target date of 2017.

New claims by single people are the first to go onto Universal Credit, followed by couples. Some areas have now started with family claims, Liverpool starting in December 2014. As the family claims increase, it will be a real test for the system as Universal Credit applications have, until now, been claimed in the tens – we will shortly see claims rise to the hundreds and thousands.

JobCentre Plus staff are making favourable reports on how their jobs have changed under the new system. They feel that they have a much closer working relationship with their clients; they can give advice on interview techniques, can look at obtaining funding for work clothes, writing a better CV. The ethos is more positive than under the old system – looking at the work that people can do, not what they can’t and above all, that work pays.

A recent change, which possibly shows they have been listening to landlords, is that where a tenant falls 2 months into arrears, the landlord can ask the Department for Work and Pensions to pay the housing element of Universal Credit direct to him. In December 2014, it was announced that such an approach would automatically mean that 20% of the tenants remaining benefit would be deducted and paid to the landlord to reduce the arrears. It is quite possible that the loudest voices asking for this are the social landlords who have always been used to direct payments for the benefit dependent and since Universal Credit started have seen their arrears levels shoot up – but private sector landlords will be happy to have the public sector fight at least one battle for them!

Landlords be ready. Talk to your tenants. Do full credit checks and references on new tenants. Explain at the start that DWP will be alerted to arrears and what that will mean for them. Pre-conceptions from Government that private landlords do not manage their properties well are, for the most part, wrong – but what is certain is that landlords will now have to show a great deal more care in who they are taking and be totally aware of the position of their rent accounts.

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1 Comment on "Universal Credit – starting near you soon"

  1. Universal Credit cost is hilarious so far. Having in mind that it would cost a lot more than they have been investing till now. Maybe they will postpone it again, but who knows. Renovating and repairing old properties may not be such a good idea right now, but we will see.

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