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Social security system needs urgent reform

Blog by Jeremy Hewer, SFHA Policy Lead.

Posted In

The Scottish Government’s latest report into the impact of UK Government welfare cuts is yet more evidence – if indeed more was needed – of the urgent need for reform.

The third annual report of Welfare Reform found that about 460,000 working age households have been affected by a £300 million cut in welfare spending in Scotland by the UK Government.

It also revealed that the Scottish Government has spent more than £63 million on Discretionary Housing Payments (DHPs) to top up benefit shortfalls. Discretionary Housing Payments have worked well as calculation of Housing Benefit and liability for the ‘bedroom tax’ would trigger eligibility for DHP – it would also trigger a Council Tax Reduction application all managed by the local authority. With the calculation of housing cost entitlement now moved to Universal Credit and the DWP, that seamlessness has been lost. The concern is that, with that disconnect, and without the mitigation of ‘bedroom tax’ at source – something that has been promised by the DWP but not as yet delivered – more and more will fall through the safety net.

The returns from SFHA’s monthly members’ survey on the impact of Universal Credit consistently show that the average level of arrear of a tenant on Universal Credit is far higher than the average level of arrear of a tenant who is not.

Having said that, the hard work, active engagement and support that housing associations and co-operatives give their tenants has meant overall arrears are relatively stable. In fact, arrears as a percentage of gross rent due has fallen from 4.3% in 2013/14 to 3.9% in 2018/19.

The majority of tenants receiving support with their housing costs are still on Housing Benefit. The most recent figures available (for August 2019) show there are 180,000 working age households in social housing on Housing Benefit, compared to 92,000 on Universal Credit. A migration of these tenants – some of whom are the most vulnerable – to Universal Credit is due to start later this year and continue until 2023.

SFHA has successfully lobbied for improvements to the Universal Credit process, in particular, the alignment of direct payments to landlords with individuals’ Universal Credit payments which is a potential gamechanger; but to ensure that the move to Universal Credit minimises the potential distress of tenants, Scottish Universal Credit Choices must be fully integrated with the transition plan and before the managed migration starts in earnest. The mitigation of ‘bedroom tax’ at source should also be in place and working smoothly.

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