Tagged: social landlords

‘Welfare Reform Isn’t Working As Planned’, Says Expert

With a further £12bn in welfare cuts in the pipeline, what evidence is there to show that reforms to the welfare system are helping people into work and cutting costs?

The head of Housing and Communities at the London School of Economics (LSE) believes that savings are lower and costs are higher than planned.

Anne Power says:

“In 2013 and 2014, LSE Housing and Communities carried out a survey of 200 social housing tenants across the South West of England to find out whether welfare reform, introduced by the coalition government, was in practice helping tenants into jobs and making them better off.

“We found that the impact was direct, harsh and in most cases not leading directly to work. We have also talked to 150 social landlords and their tenants all over the country to understand the impact of cuts in benefits on the way landlords and tenants are managing.

“Our findings are striking. Welfare reform isn’t working as planned. Government savings are lower and costs are higher, particularly disability payments due to mismanagement.

“The ‘Bedroom Tax’, was introduced to make social housing tenants with one spare bedroom move home or pay more rent. This has led to empty homes in some parts of the country as many social landlords in the North and the Midlands have surplus larger properties which they have under-let to small households. Tenants now compete to downsize, leaving a costly supply of empty, larger units. Often tenants simply can’t find a smaller unit to move too.

“Sanctions, government-imposed penalties on job seekers who fail to meet Job Centre requirements, suspend all benefits with no notice. Many appeals have over-turned the job centre sanctions but often too late to prevent deep and sometimes tragic hardship. Housing benefit payments are also rising because evictions have forced tenants to pay higher rents in the private rented sector.

“Welfare reform is directed at getting a job. But older working age bands struggle because, after a long gap, skills may no longer be usable and jobs requiring IT require considerable retraining. Former manual workers often suffer serious injuries at work and can no longer do hard labour.

“Benefit cuts create longer term social costs too. For example, carers and their dependents may need a spare bedroom for a foster child or sick relative or night-time carer.

“The government is playing to popular attitudes. Spending on welfare, when austerity hits everyone, is not popular. There is a common belief that far more people cheat than actually do, whereas bureaucratic errors are far more common and cost more.

“There is general belief that people should work, whatever the job and certainly tenants we spoke to want to work. Tenants like working. But “booting” people into standing on their own feet can cut vital support lines without jolting them into a job. It can incapacitate them.

“Welfare reform is underpinned by a strong belief in the value of the market; if things don’t pay, they will stop happening, so if benefits don’t pay, people will stop depending on them. This over-simplified view has led to unintended and unnecessarily harsh consequences. As tenants feel less certain that they can rely on benefits, they find job centre interviews and the threat of sanctions too painful and too humiliating, so some just disappear off the unemployment register.

“The number of people actually finding work through job centre action is far smaller than claimed.

“On the other hand, tenants want to work whenever possible, even when pay is poor, so in that sense the strong work focus of welfare reform is positive. Tenants also like training and learning – and job centres send claimants on courses.

“Tenants are adjusting to lower incomes, although paying bills is a constant juggling act and it is no longer possible to take basic support for granted. The adjustment tenants are making would be far more painful if it wasn’t for advice organisations like CAB, churches and charities that offer emergency support. Food banks help in extreme circumstances.

“Social landlords are responding to welfare reform and the wider cuts they face with considerable anxiety. They know the vast majority of their 4 million tenant households are hard hit.

“Collecting rents becomes even more important, but far more challenging. Welfare reform has forced social landlords to recognise the need for more direct, face-to-face, front-line contact with tenants to ensure payments and help resolve problems. They develop opportunities for training and accessing jobs to help welfare reform work.”

Source – Welfare Weekly, 26 May 2015

http://www.welfareweekly.com/welfare-reform-isnt-working-as-planned-says-expert/

Iain Duncan Smith Gets More Time To Rescue The Loathed Universal Credit

The collective groan that went up when Iain Duncan Smith was reappointed to the Department for Work and Pensions over the weekend could probably be heard from space.

For housing workers, it’s five more years of the same: no change in direction, just straight ahead with the pressing business of welfare reform. However, the return of IDS also provides an opportunity for pragmatism in the delicate relationship between the new Conservative government and social landlords.

From the bedroom tax to the social cleansing of London as families hit by the benefits cap are shunted outside the capital, there was a lot for housing experts to criticise during the term of the coalition government – and criticise they did.

Much of that was tied up in an understandable moral objection to the changes being implemented. After all, if you’ve dedicated your career to alleviating housing need, it can be hard to work within the constraints of policies which you observe to be undermining a life’s work.

The practical objections, however, have been far more quietly stated, in part because some of them are so complex that they do not resonate with the wider public. In short, their comments don’t make great headlines.

Universal credit is one such example. The policy sounds laudable when described as a simple way of helping benefit recipients transition into employment by handing over full financial responsibility for all their outgoings including rent (previously paid directly to the landlord).

But as all housing providers knew, it will be much more complicated than this. Government has never been good at managing large IT projects or handling lots of data. The reality of working life for many low-paid staff can be weeks of employment and unemployment hard up against one another, with no time for state bureaucracy in between. And most frontline jobs are paid weekly or fortnightly, not monthly like universal credit.

For housing associations, the policy introduces a huge financial variable. How can large organisations with loans negotiated on the basis of a reliable income cope with hard-pressed tenants who do not pay up? The housing regulator is now stress-testing accommodation providers to see how they would cope with situations like this. The result is, inevitably, a downgrading in their ratings.

It’s important to remember that universal credit is derided by private and social landlords alike. Both fear for their revenue. The difference between the two is that, while private landlords can refuse to house people on benefits, social landlords will need to make compromises to stay afloat. That’s why, though he is so widely disliked, Duncan Smith’s reappointment should actually be welcomed.

Cameron told MPs at a meeting of the 1922 Conservative parliamentary committee on Monday that their “re-election starts now”. Absolutely. This government can no longer blame the mistakes of the previous incarnation, and nowhere is this more significant than for housing.

After five years of thwarted pilots, up to £663m of IT costs being written off by the Treasury and more stumbling blocks than an army fitness assault course, it’s time for a pragmatic approach to the introduction of universal credit. The Conservative government is unlikely to walk away from the policy, and Duncan Smith cannot claim ignorance of its failings so far. He cannot hide behind excuses or inexperience in the way a new minister to the brief could be tempted.

To survive their new future, social landlords will need to adapt. They will need to have diverse income streams: development will now always be for the private sector alongside the social to make ends meet. So for every social home that is built, a home for sale, shared ownership or private rent must also be built to help social landlords stay afloat.

Yet, also, there’s never been a better time to challenge a minister head on and demand some certainty. The minister will have little choice but to capitulate.

Source – The Guardian, 15 May 2015

Tenant evictions reach six-year high amid rising rents and benefit cuts

The number of tenants evicted from their homes is at a six-year high, according to new figures, as rising rents and cuts to benefits make tenancies increasingly unaffordable.

County court bailiffs in England and Wales evicted more than 11,000 families in the first three months of 2015, an increase of 8% on the same period last year and 51% higher than five years ago.

The increase in the number of tenants losing their homes means 2015 is on course to break last year’s record levels. Nearly 42,000 families were evicted from rental accommodation in 2014, the highest number since records began in 2000.

Rental prices have soared in many UK cities but wages failing to keep pace with rising costs and caps to benefits have left many poorer tenants unable to make payments.

Separate figures also published on Thursday showed almost 59,000 households have had their benefits capped in the past two years. Nearly half of those families were in London, where the the average monthly rent for a two-bedroom home is £2,216.

Housing charities said the figures were a glaring reminder that many tenants were struggling to maintain a roof over their heads, and they called on the new government to do more to tackle a housing crisis in the UK.

The latest repossession statistics, published by the Ministry of Justice, reveal the highest number of evictions in a single quarter since 2009, when comparable records began, with nearly 126 families forced out every day.

Between January and March, 11,307 tenants and their families were evicted by bailiffs, compared with a figure of 10,380 between October and December last year, and 10,482 in the first quarter of 2014.

The record figure comes as the number of landlord repossession claims – the first step of the legal process leading to an eviction – also rose. Claims were up 10% on the last quarter, but at 42,226 they remained below a six-year high of 47,208 in the first quarter of 2014.

Claims by both private and social landlords were up, the figures showed, although most of the rise was explained by claims by the latter. Social landlords were behind nearly five times as many attempts to recover properties than private landlords, the figures showed. These landlords are typically housing associations providing homes at lower rents than the market rate, often to tenants who receive housing benefit.

In the first three months of the year, 64% of possession claims were made by social landlords. These 27,204 court actions came alongside 5,551 made by private landlords and 9,741 accelerated claims, which could have been by either social or private landlords.

In May 2014, when the threat of evictions reached its highest level for a decade, the National Housing Federation, which represents housing associations across England, told the Guardian the bedroom tax was causing problems for social landlords. The policy cuts the amount of housing benefit paid to social housing tenants whose homes are deemed too large for their requirements. Benefit sanctions were also thought to be causing problems.

But many housing associations, particularly in London and the south-east, have turned out tenants as they have sought to redevelop generations-old estates to take advantage of the big rise in property values. This has in turn led to an increase in the number of grassroots campaigns to oppose evictions, such as the Focus E15 mothers.

In one case of eviction resistance last week, activists from Housing Action Southwarkand Lambeth in London answered a call from a 14-year-old girl to successfully resist her family’s eviction from a flat in an estate that Southwark council had marked for demolition. Elsewhere in the capital, shorthold tenants in Brixton’s Loughborough Park estate, owned by the Guinness Partnership housing association, have defied eviction orders by occupying their flats.

The MoJ figures came on the same day as the Department for Work and Pensions revealed that 58,690 households across the UK had their benefits capped to a maximum of £26,000 a year since April 2013. Londoners were the worst affected, with 26,636 families facing a cut in benefits over the period to February 2015, followed by 5,953 in the rest of the south-east.

DWP proposals to meet the Conservatives’ pledge to cut £12bn from the welfare budget, in documents leaked to the Guardian last week, included barring under-25s from claiming housing benefit, increasing the bedroom tax on certain categories of tenants, limiting welfare payments by family size and freezing welfare benefits at current levels.

Responding to the eviction statistics, Campbell Robb, chief executive of Shelter, said:

“Today’s figures are a glaring reminder that sky-high housing costs and welfare cuts are leaving thousands of people battling to keep a roof over their heads.

“Every day at Shelter we see the devastating impact of a housing market at boiling point, with the cost of renting so high that many families are living in fear that just one thing like losing their job or becoming ill could leave them with the bailiffs knocking at the door.

“The new government must make sure people aren’t left to fall through the cracks and hurtling towards homelessness by preserving, if not strengthening, the frayed housing safety net to protect ordinary families desperately struggling to make ends meet.”

Betsy Dillner, director of the campaign group Generation Rent, said:

“These record eviction figures and signs that they are accelerating are a stark reminder of the housing crisis that the government must urgently start taking seriously now they’re back in power.

“Whether it’s an inability to pay expensive rents or a landlord’s desire to take back their property, the fact that more than 40,000 families were forced out of their homes last year is a symptom of the government’s failure to create a sustainable housing market.”

The housing minister, Brandon Lewis, defended the government’s performance, pointing out that mortgage repossessions had fallen drastically, keeping owner-occupiers in their “hard-earned homes”.

He said:

“Mortgage repossessions continue to fall at 56% lower than this time last year, and the lowest annual figure since the series began in 1987. Meanwhile, numbers of county court mortgage possession claims continue to fall to the lowest quarterly number since records began. This is thanks to our work to tackle the deficit and keep interest rates low, helping more families to stay in their hard earned homes.

“There are strong protections in place to guard families against the threat of homelessness. We increased spending to prevent homelessness, with over £500m made available to help the most vulnerable in society and ensure we don’t return to the bad old days when homelessness in England was nearly double what it is today.”

Source – The Guardian,  14 May 2015

Row looms over Tories ‘right to buy’ election pledge

Tory plans to allow 1.3 million tenants to buy their housing association homes have been condemned by the boss of one of the region’s biggest social landlords.

The Conservative election manifesto includes plans to extend the Right to Buy, which was granted to council tenants under Margaret Thatcher.

David Cameron placed home ownership at the heart of the Tories’ election campaign at the launch of the manifesto in Swindon yesterday.

He said: “Part of having a good life is having a home of your own.

 “That’s why Conservatives have committed to building a property-owning democracy for generations, and today I can tell you what this generation of Conservatives is going to do about it.”

But Michael Farr, executive director of development for Isos Housing, which has properties on South Tyneside, said the move would be ‘a catastrophic mistake’.

Being forced to sell off its housing stock would reduce the association’s ability to raise funds for new building, he said.

“Like any independent business, we borrow money based on our assets. If a government obliges us to sell a proportion of those assets, we will not be able to borrow in the same way, or at the same rates.”

“If the Government proposed supermarket chains must sell off stores, or a bus operator should sell its vehicles, people would say it couldn’t be done, and they had no right to do that.

“So why is it considered acceptable to sell off housing association assets?”

Mark Littlewood, director-general of think-tank the Institute of Economic Affairs, said he was “staunchly for” the approach.

He said:

“All of the evidence suggests that, when you transfer the housing stock away from state ownership and into the hands of individual citizens, they feel a greater stake in society.”

> Well he would say that, wouldn’t he ?

The IEA enjoyed its highest influence during the right-wing Tory administration of Margaret Thatcher. Milton Friedman believes the IEA’s intellectual influence was so strong that “the U-turn in British policy executed by Margaret Thatcher owes more to him (Antony Fisher, one of its founders) than any other individual.”

http://www.sourcewatch.org/index.php?title=Institute_for_Economic_Affairs

Source – Shields Gazette, 15 Apr 2015

Community action : Horden residents plan to take over running of dozens of empty homes

Residents of a former colliery community plan to take over the running of dozens of boarded up homes themselves.

A total of 160 homes out of 361 properties managed by Accent housing association stand empty in East Durham – 130 of them in Horden, near Peterlee.

They have become a magnet for antisocial behaviour, fly-tipping and rat infestations.

Horden residents decided to act after Accent announced it was seeking a “programme of disposal”, with a Government minister suggesting last week they could be flogged off for as little as £1 each.

Accent has blamed the controversial bedroom tax for contributing to the low demand for the homes, but residents argue it is the failure to invest in the properties which has made them undesirable.

At a packed meeting convened by the Horden Colliery Residents’ Association (HCRA)  on February 18 backed the formation of a community association with the view to acquiring and renovating the properties.

HCRA spokesman John Barnett said:

“Over the many years Accent have invested little or nothing on the properties.

“Although Accent claims the bedroom tax is to blame, we believe it is the lack of investment and the state they have allowed the streets to degrade into that has put people off. The appearance of all the boarded up houses is devastating.”

“What we want to do as a community is tackle the environmental aspects and make streets more attractive and then renovate those properties.”

Residents have approached community housing expert Jo Gooding to help them examine the options.

Accent is hoping many of the homes will be purchased by would-be homeowners under a homesteading initiative, subject to approval by the Homes and Communities Association.

Claire Stone, Accent’s director of communities and assets, said:

“We have worked really hard to find the best possible solution for these homes and have had a dedicated project team in place with Durham County Council and the Homes and Communities Agency to explore all the options.

“We had hoped that other social landlords with stock in the area would take them on, but unfortunately this has not proved possible.

“We have therefore reluctantly decided to dispose of the properties as they fall empty. We will continue to work closely with residents and local representatives to ensure that they are fully supported throughout this process.”
Source – Northern Echo,  20 Feb 2015

‘£1 homes’ to go on sale in Horden and Blackhall

A housing  group has announced it is to sell a number of empty homes which a debate in Parliament heard could go for as little as £1.

Accent housing association, which manages 361 social housing properties in Horden and Blackhall, says it has reluctantly taken the decision after exhausting all other avenues including approaching other landlords.

It is seeking consent from the Homes and Communities Agency to dispose of 30 empty homes in Blackhall and 130 in Horden.

Claire Stone, Accent’s director of communities and assets, said:

“We have worked really hard to find the best possible solution for these homes and have had a dedicated project team in place with Durham County Council and the Homes and Communities Agency to explore all the options.

“We had hoped that other social landlords with stock in the area would take them on, but unfortunately this has not proved possible.

“We have therefore reluctantly decided to dispose of the properties as they fall empty.

“We will continue to work closely with residents and local representatives to ensure that they are fully supported throughout this process.”

During a debate in the House of Commons last week called by Easington MP Grahame Morris, the Government suggested such homes could be sold off for as little as £1 with new owners being required to renovate them.

But Mr Morris said there was a feeling Accent was abandoning the community and said they should not be allowed to walk away from their responsibilities.

Ms Stone added:

“As a responsible social landlord, we need to ensure that our stock is fit for the future.

“We are under an obligation to secure the best possible value for money for all of our residents into the future and our robust asset management strategy has identified that these properties are not sustainable for us as a social landlord.”

Accent says it has invested £8.6m in the area but would have to spend a further £7m to bring the houses up to the required standard.

The social housing provider says it intends to sell more of its 321 properties in Blackhall and Horden as they become vacant.

It says it is visiting all residents in the areas affected.

So far, more than 130 households have requested a move while those who wish to will remain Accent tenants.

Source –  Hartlepool Mail,  18 Feb 2015

Universal Credit: Claimants Face 20% Deduction To Clear Rent Arrears

Universal Credit claimants who fall behind on rent payments could see up to 20% of their monthly allowance redirected to landlords, the DWP has announced.

The move comes after housing organisations raised concerns that the previous amount of just 5% could result in increased arrears and possible evictions.

Universal Credit brings together six different benefits into one monthly payment and the housing element will, in most cases, be paid directly to the claimant – rather than their landlord.

The new system is designed to “encourage financial responsibility”, says the Department for Work and Pensions. However, some housing organisations and charities are concerned that vulnerable claimants – which may include people with learning difficulties or debt problems – may struggle to manage their finances and fall into rent arrears.

The DWP say “work coaches are being trained to assess a claimant’s financial capability and will refer to personal budgeting support where appropriate”.

Where Universal Credit claimants need additional support to help keep up with their rent payments, the DWP may make rent payments directly to landlords, and deduct additional amounts from a claimant’s monthly Universal Credit payments if requested by landlords.

Communities Minister Kris Hopkins said:

Universal Credit helps claimants and their families to become more independent through simplifying the welfare system. I welcome this initiative to help social landlords and tenants prepare for Universal Credit.

“I’ve been impressed by the work I’ve seen that social landlords do in supporting their tenants and it’s clear to me they have a vital role to play in helping them to make this change. A large number of social housing tenants will over time move onto Universal Credit so I would encourage landlords to get involved.”

In a ‘support pack‘ published for housing organisations, the DWP said:

“The amount that can be deducted from a claimant’s universal credit if they fail to pay their rent, has been increased from 5% to an amount of up to 20% of the universal credit standard allowance, which will ensure claimants are back on track with payments quicker. The minimum amount that will be deducted is 10%.”

If a claimant accumulates a months worth of rent arrears it will trigger “early intervention” by the DWP, who will review a tenants financial status and may consider making rent payments directly to landlords where appropriate.

Should a tenant accrue two months of rent arrears, the DWP will step in immediately and divert the housing element of Universal Credit to a claimants landlord.

20% of a claimants ‘standard allowance’ could be deducted and diverted to landlords to clear rent arrears as quickly as possible. The DWP had consulted with charities and experts on deducting as much as 40% from a claimants standard allowance.

However, like many others, The Money Advice Charity described this amount as “excessive”, which “could ultimately compound the financial difficulties that led to the arrears building up.”

Responding to the consultation (pdf) the charity said:

“A maximum deduction rate of 20% for housing-related arrears would strike a more appropriate balance between increasing repayments and ensuring that these repayments do not have unintended negative consequences.”

Social landlords are being encouraged to identify tenants who may be struggling to keep up with their rent payments under Universal Credit.

Lord Freud, Minister for Welfare Reform said:

“Social landlords have been playing a vital role in welfare reform and supporting tenants who are already receiving Universal Credit. There is great work happening in the sector.

“Universal Credit is now available in 1 in 10 Jobcentres and will be in almost 100 by Christmas, with national roll-out beginning early next year – so now is the ideal time to boost preparation activity.

> Didn’t they say that last year ?

“For the first time many tenants will be paid their Housing Benefit directly and I would encourage landlords to think about identifying tenants who need support to prepare for this, and put those who are ready onto a direct payment early.”

Universal Credit has been beset with delays and costly IT problems. The DWP has already written-off £40 million failed IT system with a further £90 million predicted to be thrown away over a five-year period.

Work and Pensions Secretary Iain Duncan Smith originally promised that 1,000,000 households would be on Universal Credit by the end of 2014. However, DWP figures show that less than 18,000 households were claiming Universal Credit by 9 October.

The national roll-out of Universal Credit is expected to be fully completed by 2018.

Source –  Welfare  Weekly,  13 Nov 2014

http://www.welfareweekly.com/universal-credit-claimants-face-20-deduction-clear-rent-arrears/

Council announces proposal to build own housing to help prevent migration

Plans to revive rural communities by spending £5m on building new council houses have been criticised as having a high risk factor.

A lack of affordable homes has been identified as a contributing factor to young people moving away from Yorkshire Dales communities – and has prompted a campaign by leader of Richmondshire District Council, John Blackie, to provide cheap new homes and jobs.

Schools across Richmondshire have reported a fall in school roll figures, so house building has been proposed as a means of persuading families to stay in the Dales.

Cllr Blackie has organised a conference for key partners including the Yorkshire Dales National Park Authority, housing associations, local enterprise partnerships, and health and education representatives, to take place at Tennants, Leyburn, on Wednesday, November 19 from 9am.

But Cllr Fleur Butler, leader of the Conservative opposition group on the council, said the £5m proposal was a huge risk to council tenants, whose rent feeds the fund.

She told the full council meeting that she was concerned the council would be taking on more debt when cuts still had to be made and she felt more work should be done to work with existing landlord partners.

 > And probably sell off existing council housing stock while they’re about it – it’s the Tory way.

To spend £5m from the housing revenue account will put enormous risk on to our tenants whose rents must rise should the council’s proposed own social landlord company fail to repay its debts,” she said.

Why isn’t Cllr Blackie instead working better with our registered social landlords? What evidence does he have for partnership failure, and why on earth should we go down the route of being our own landlord, when we already work with several?”

Cllr Blackie said the greater risk was to lose young families in our rural and deeply rural communities – and that he did intend to continue to work with social landlords.

He said:

We are intending to take the decision to authorise Richmondshire District Council to return to the role it occupied for many years as a provider, by purchasing in the housing market, or builder of council houses.

“We intend to set up what is basically a registered social landlord company.

“The Government has relaxed its stand on councils across the country legally doing this, and we have funds available to finance the programme.”

Cllr Blackie confirmed the funds would flow from a £5m borrowing facility within the housing revenue account.

This is a really important issue and on November 18 the council’s corporate board will debate the proposal,” he said.

Cllr Butler said she was not completely against the idea of the council building its own stock, but first wanted to examine why so many people were leaving the Dales.

Source –  Northern Echo,  23 Oct 2014

Universal Credit: Housing Benefit Claimants Told To Pay Rent A Month In Advance

Housing Associations have told tenants in receipt of Housing Benefit to pay their rent a month in advance, due to growing fears over Universal Credit.

Housing providers fear that tenants in receipt of Housing Benefit may default, or fall behind on their rent payments when they are transferred (moved) to Universal Credit, which is replacing six existing benefits and rolling them into one single monthly payment.

Housing Benefit is currently paid directly to social landlords in the majority of cases. Under the new Universal Credit system, housing support will be paid directly to the claimant.

Those claimants will then be expected to manage their own housing costs – a month in advance. In the minority of cases where a claimant may not be able or capable of managing their own housing costs, rent payments may still be paid directly to housing providers.

Six Town Housing based in Bury, Lancashire, has told its tenants that “you need to make additional rent payments now if you are affected by the introduction of universal credit. Otherwise, you are at risk of your rent account falling into rent arrears.”

The Town and Country Housing Association, who manage social housing properties across 22 local authorities, is asking its tenants in receipt of Housing Benefit to pay an extra £14.60 every month, until they are a month in credit. “This will ensure that when you transfer to universal credit you will not be in arrears which could put your tenancy at risk,” the Housing Association said.

Town and Country also refused to reimburse a tenant who had wrongly been asked to pay the controversial ‘bedroom tax’. The tenant was owed £362, however the Housing Association said it would be in the “best interests” of the tenant for the over-paid rent amount to remain on their account.

Gillian Guy, Citizens Advice’s chief executive, told the Guardian newspaper:

It’s for householders to manage their finances, not landlords or housing associations. There’s a difference between advising people to be financially prepared and doing it for them, and it would be concerning if the latter were the case.”

Source –  Welfare News Service,  17 Aug 2014

http://welfarenewsservice.com/universal-credit-housing-benefit-claimants-told-pay-rent-month-advance/