Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, whether she has made an assessment of the effect of universal credit on the level of rent arrears owed to Scottish local authorities; and if she will make a statement.

The Department has not made an assessment of this nature.

Caution should be exercised when considering any assessment of arrears derived from local authority level data which seeks to compare the legacy and Universal Credit welfare systems. This is because they do not compare groups with the same characteristics; typically, the legacy benefit group have been on benefits for some time, where the arrears may be under long-term management. The Universal Credit group, on the other hand, are often new to benefits, and are likely to have experienced a change in their circumstances – for example, a debt-creating event like losing a job or separation. Any arrears for this group will not have been under management and had time to clear.

The initial analytical work we have carried out with a housing provider suggests that many tenants are arriving on Universal Credit with pre-existing rent arrears, that their arrears tend to increase prior to making a claim for Universal Credit, and that Universal Credit actually appears to be helping to clear arrears over time. We are currently extending this analysis to include a number of other housing providers. It will be published when completed. Furthermore, according to latest figures in November 2018 about 8 per cent of social rented households were on Universal Credit; therefore, it is difficult to see how a national trend can be attributed to Universal Credit.

We have, however, responded to concerns in this area by putting a number of safeguards in place, such as 100% advances repayable over 12 months, increasing to 16 months in October 2021; a two-week Transition to Universal Credit Housing Payment; a new Help to Claim service to assist people to make their claim more easily; and Managed Payment to Landlord Arrangements, which allow for payments direct to the landlord if the tenant is likely to have difficulty in managing their rent payments, is unlikely to pay their rent or is in rent arrears equivalent to two months.

Furthermore, in Scotland, the Department delivers Universal Credit Scottish choices on behalf of the Scottish Government, providing the option of Universal Credit being paid twice a month rather than monthly, and having Universal Credit housing element being paid directly to landlords.