Change afoot for homeless families on Universal Credit?

Paying housing costs through Universal Credit is causing problems for tenants, landlords and local councils alike, particularly in temporary accommodation. So we are pleased that the Government is planning to move this support back to locally-administered housing benefit.

Late last week we learnt that DWP Ministers are preparing to issue new guidance to ensure that families living in temporary accommodation, in areas where full Univeral Credit (UC) has been rolled out, will have their housing costs met by housing benefit instead of UC. This is a significant, and welcome, change for the flagship benefit, which was supposed to simplify the welfare system by combining six key benefits, including housing benefit, into one.

Support for housing costs, paid through the housing element of UC, is emerging as a significant problem. Several Parliamentary committees have reported that the way in which housing costs are paid has been a constant source of anxiety for landlords, housing associations, claimants and advice workers. This is borne out by the experience of our service users across the country. Tenants often do not receive their benefit in time to pay their rent and are put at risk of eviction and homelessness. Delays mean that some landlords, who used to accept people on benefits, are now refusing tenants who are on UC, severely limiting their housing options.

We have blogged before on why UC doesn’t work for all housing tenures and the design of UC means that is does not work at all well where local councils use emergency, temporary accommodation (such as homeless hostels and B&Bs) to meet their duties to homeless families. Temporary accommodation is meant to house people for a short period of time and households may be moved between several properties until a permanent home can be found for them. Legally, councils should not use bed and breakfast placements for more than six weeks if a household has children, and then only in an emergency. But by the time claimants have waited six weeks (or more) for their UC to come through, they may have already moved on to more suitable accommodation.

Not only does this make it very difficult for councils to recoup the costs from claimants (Croydon Council has seen its collection rates in temporary accommodation drop from 91% to 59% under Universal Credit) but councils are incentivised, perversely, to keep homeless families in unsuitable, nightly paid, emergency accommodation for a longer period than necessary to ensure the costs are included in the household’s eventual UC payment. This risks causing serious harm to the well-being of children.

Lord Freud has recommended that temporary accommodation should be taken out of Universal Credit altogether, as is currently the case with refuges and homelessness hostels. The evidence suggests this would be a sensible way to improve the system.

We made the same recommendation in our own submission to the (just closed) Work and Pensions Committee inquiry into UC, arguing that support for temporary housing costs should be returned to housing benefit, as it was before the introduction of UC. It’s not a perfect solution but, under this system, local arrangements in all local councils ensured that households placed in temporary accommodation were subject to a financial assessment, and local housing benefit claim and admin arrangements were linked very closely with those dealing with households seeking help because they were homeless.

We are encouraged that the Government has recognised the problems UC is causing in temporary accommodation, for tenants, landlords and local councils, and look forward to seeing the details soon.