PREPARING FOR THE IMPACT OF UNIVERSAL CREDIT – FEBRUARY 2018 LOCAL AUTHORITIES AND NGOs MUST PREPARE NOW FOR RENT ARREARS

In 1698 it took six weeks for Sir Christopher Wren to undertake a full damage survey on a stately home (amounting to £162, the equivalent of £19, 430 today) and for it to be processed and paid in full by the Treasury to the claimant writer John Evelyn in compensation.Image result for universal credit

In 2017, 321 years later the DWP was taking 5-6 weeks or more to process a claim for £72 for a claimant entitled to Universal Credit.

Universal credit is due to be rolled out in Ealing and other boroughs in West London in February 2018

Recent findings

Evidence accumulated by Parliament showing the failings of the scheme and pilot areas was presented to MPs on 15 November 2017, leading to members of both the House of Commons and the House of Lords calling for reform. That is five years after the first UC legislation was passed; seven years after it was conceived.

Three days later on 18 November 2017, the personal finance programme Money Box on BBC Radio 4 revealed that claimants could be waiting for a month in December before they get any payment, apparently because it is a five-week month, something the programming of the system was not designed for.

Preparing for UC

This does not bode well for claimants in West London where the benefit is to be rolled out from February 2018.

Public bodies, advice agencies, charities and foodbank providers in West London need to start planning ahead.

So if you’re going to be affected

· Be prepared for this system not to work;

· Start saving money now if you have any spare and put some money aside as it is likely your income will fall;

· Identify which creditors to contact (most important payment are your housing costs in rent and mortgage)

· You may have to use the appeal system to get any payment you are due;

· Keep a record of what is happening.

Universal credit was created under section 1 of the Welfare Reform Act 2012. Some difficulties being recognised now were apparent as long ago as the Welfare Reform Bill stage in 2011, and certainly apparent by the time the regulations were enacted between 2012-2014. So it was foreseeable – see an article from 2015. http://benefitslegalgroup.org.uk/2014/01/doom-awaits-universal-credit/

The fact that this may only be dawned on people on so many in Parliament and public life is highly regrettable; worse still, this slow response time does not suggest that the problems ahead in the winter of 2017-2018 will be fixed speedily. Ultimately, there may be compensation claims for the mess that universal credit threatens to be. In the meantime, local government organisations are already sounding warnings about the situation, the key one being:

“If the growing crisis of UC-related rent arrears is not resolved, then there will be serious consequences for tenants and for housing providers.”

This comes from Insight, in ‘Credit Notes’ by Geoff Fimister of the Institute of Revenues, Rating and Valuation (IRRV) December 2017.

Indeed, the IRRV Chief Executive David Magor stated in an editorial on Universal Credit (UC) and housing benefit (HB) in the October 2017 issue:

‘This situation must be addressed immediately before it’s too late – and at the top of the list of recommendations should be the removal of HB from UC!’

This followed an alarming piece The Observer (17.10.17) detailing the scale of the problem: ‘Ministers are coming under intense pressure to put the brakes on the government’s flagship welfare reform programme, following damning new evidence that it is leaving thousands of low-paid workers unable to pay their

rent and at risk of homelessness.’ It revealed rent arrears are ‘running at three, four or even five times the level of those on the old system’.

No-one can say that we have not been warned, these problems will start to become acute as early as April 2018 as rent arrears pass pass the two-month mark.

Alan Murdie, LL.B, Barrister Chairman, Nucleus.