Universal Credit: Private Rented Sector

Peter Aldous Excerpts

Tuesday 9th January 2018 Westminster Hall

[Peter Aldous (Waveney) (Con)]

It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate the hon. Member for Eastbourne (Stephen Lloyd) on securing the debate and the Backbench Business Committee on granting it.

The full roll-out of universal credit in Lowestoft in my constituency commenced in May 2016. Significant problems were encountered from the outset, although from early 2017 the Department for Work and Pensions has worked more closely with local organisations to address them. The situation has improved and the proposals announced in the November Budget are very welcome. One area in which work is still required is the co-ordination of universal credit with housing in both the social and the private rented sectors. Good housing is a vital prerequisite if universal credit is to be a success, and it is important that the role of private providers is properly recognised.

The main problem that was encountered was that the delays in the paying of universal credit led to rent arrears building up. This triggered a downward spiral of events, with landlords often serving eviction notices, albeit reluctantly, leading to an increase in homelessness, added pressure on local authorities and housing associations to house those who had been evicted and subsequently a reduction in housing as private landlords decided not to let to universal credit claimants.

[Vicky Foxcroft (Lewisham, Deptford) (Lab)]

On that point, I had one couple who received no benefits for six months and were very nearly evicted. At the end of it all they were told that they would receive only four weeks’ backdated payment, and it was only when we intervened in the case that we managed to get the full amount back to them. This absolutely has to be looked into.

[Peter Aldous]

The hon. Lady highlights an example of the problems with implementing universal credit that many of us have experience of from our constituency casework.

[Melanie Onn]

In October, the housing association Shoreline in my constituency had 182 residents who were already on universal credit, and 80% of them were in rent arrears. Such examples create a stigma against people who are on universal credit, because of those issues. Fundamentally, we have to iron out some of those problems to prevent people from getting into arrears and to give private landlords confidence that those people will not be defaulters or bad debtors when paying their rent.

[Peter Aldous]

Yes. It is quite clear that private sector landlords’ confidence in the system has been very severely dented. I sense, from my own perspective, that the situation has improved, but I acknowledge that there is still a great more work to be done. Local letting agents advise me that the majority of their landlord clients are still reluctant to let to universal credit claimants. It is also necessary to bear in mind that many landlords own only one or two properties and the rents that they receive are a very important part of their annual income.

The Eastern Landlords Association, which has 1,400 members, highlights the lack of a level playing field, with council and housing association landlords able to secure direct payments after eight weeks’ arrears, while private landlords need specific tenants’ approval to do so. This is still proving a disincentive to private landlords to let to universal credit claimants; as we have seen, many of them have lost confidence in the system. It highlights the need for better communication with the DWP and describes the system of claiming alternative payment arrangements online as “hit and miss”. It advises that while some claims do get processed, in its experience at least 50% do not get looked at.

The roll-out of universal credit is a mammoth task. There is a lot of heavy lifting to be done, which the DWP cannot do on its own. There is a need for a partnership approach, which should involve private landlords as well as councils, the 1ocal voluntary sector, such as citizens advice bureaux, and housing associations. To give credit to the DWP, under the guidance of my hon. Friend the Member for East Hampshire (Damian Hinds)—perhaps I should say my right hon. Friend; I wish him all the best in his new role—it has begun to adopt such an approach in recent months, and I anticipate that the Minister will continue in the same way. It is important that full consideration is given to the Residential Landlords Association’s recommendations and to the innovative proposals from Crisis to adapt the Newcastle trailblazer for reducing homelessness to ensure that those in receipt of universal credit do not fall into rent arrears.

In Lowestoft, three suggestions have been made. First, in each DWP office, the Government should have a landlord liaison officer for landlords to contact to discuss issues with their tenants’ housing claims, when the landlord has applied for an alternative payment arrangement. Secondly, housing moneys should not be released to a tenant when they are being sanctioned, as they often choose to use the money to support the sanction shortfall. In effect, that means the landlord is penalised. Finally, when a sanction does happen, the housing money should automatically be paid through an alternative payment arrangement to the landlord.

A lot of people wish to speak in this debate, so I will conclude by saying that if universal credit is to be a success and to do what it says on the tin, it is important that the DWP listens to the proposals that I have outlined, as colleagues will too, so that we fully regain the confidence of private landlords, because they have a very important role to play.

[Several hon. Members rose—]