For Mancunians, the new system of Universal Credit is already a reality. What is the early news? The Welfare Reform Minister Lord Freud has written an encouraging progress report for Inside Housing.
The pilot projects are showing the majority of claimants are managing their own rent – even through Christmas when budgets can be tight for people. A minority of tenants need help and we are gaining detailed insight into what support they need and how it can be provided so that the financial position of landlords is protected.
Lord Freud believes that giving those on welfare greater responsibility – including paying their own rent – is important:
Universal credit will prepare people for the world of work by getting them to manage their money in the same way people in work budget. Breaking this behavioural barrier is an important step in helping people move towards financial independence.
The early signs that this seems to be working are a great encouragement – especially after the sniping from Labour MPs such as Bill Esterson.
But that is not the only advantage emerging from the new arrangements. It turns out that often landlords – private and social – are rather decent people and that having direct contact with tenants has proved positive:
Again and again, I have been struck by some of the specific cases that have been found by landlords taking part in the demonstration projects.
For example, it was shocking to learn of a family that was living in appalling conditions because their father was a lone parent of four children and struggling to cope with a heroin addiction – and they were not getting the help they needed because they were not on the radar of the relevant authorities.
This example only came to light because the tenant and the landlord had a changed relationship because of direct payment. In fact, one of the first things we learned from the demonstration project was that landlords did not know as much as they might have thought about their tenants.
Naturally enough, many private landlords are worried about how it will work out. There are safeguards in place for them. They will get the rent owed to them in the end – if there are two months of arrears then direct payments resume. The whole idea of the piloting is to ensure it works smoothly.
So there might be a delay with the rent with benefit claimants. Yet there are also often delays when the state pays direct. One landlord has written:
Ask any landlord what they care most about and the answer is almost always going to be getting paid on time. Under the current system councils are failing to keep up with a backlog of claims – in some cases the wait can be up to six months. Is it any wonder that private landlords often refuse to touch the benefit sector at all?
With the Universal Credit system the landlord still has the security of knowing the rent will get paid in the end. In some cases there may be more delays, but there actually might be fewer delays overall. The relationship between landlord and tenant is likely to work more smoothly without the state getting in the way.