This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.theguardian.com/society/2017/nov/22/england-housing-crisis-botched-universal-credit

The article has changed 10 times. There is an RSS feed of changes available.

Version 4 Version 5
What England needs is more affordable houses, not universal credit What England needs is more affordable houses, not universal credit
(13 days later)
Wed 22 Nov 2017 07.30 GMT
Last modified on Mon 27 Nov 2017 13.22 GMT
Share on Facebook
Share on Twitter
Share via Email
View more sharing options
Share on LinkedIn
Share on Pinterest
Share on Google+
Share on WhatsApp
Share on Messenger
Close
Across the road from where Daniel Blake pleaded for fairness with jobcentre staff in Ken Loach’s 2016 film, a real human drama is unfolding in Newcastle upon Tyne’s Citizens Advice Bureau. Since becoming the largest city to pilot universal credit last March, rent arrears with Newcastle council’s housing provider have gone through the roof. At the last count, they stood at £1.3m. Some tenants have run out of cash, leaving the bureau to pick up the pieces.Across the road from where Daniel Blake pleaded for fairness with jobcentre staff in Ken Loach’s 2016 film, a real human drama is unfolding in Newcastle upon Tyne’s Citizens Advice Bureau. Since becoming the largest city to pilot universal credit last March, rent arrears with Newcastle council’s housing provider have gone through the roof. At the last count, they stood at £1.3m. Some tenants have run out of cash, leaving the bureau to pick up the pieces.
Think about that: at least 2,400 people in rental arrears in a medium-sized city, with a growing economy, thriving digital sector, two universities and a rich cultural offer. It could be anywhere in England. Newcastle’s experience with universal credit and the consequent impact on social housing – and the shrinkage it is inflicting on the private rented sector – should be a warning to the rest of the country as it is rolled out.Think about that: at least 2,400 people in rental arrears in a medium-sized city, with a growing economy, thriving digital sector, two universities and a rich cultural offer. It could be anywhere in England. Newcastle’s experience with universal credit and the consequent impact on social housing – and the shrinkage it is inflicting on the private rented sector – should be a warning to the rest of the country as it is rolled out.
Universal credit is the supposed flagship reform of the benefits system, rolling together six benefits (including unemployment benefit, tax credits and housing benefit) into one, online-only system. The theoretical aim, for which there was general support across the political spectrum, was to simplify the benefits system and increase the incentives for people to work, rather than stay on benefits.Universal credit is the supposed flagship reform of the benefits system, rolling together six benefits (including unemployment benefit, tax credits and housing benefit) into one, online-only system. The theoretical aim, for which there was general support across the political spectrum, was to simplify the benefits system and increase the incentives for people to work, rather than stay on benefits.
The project was legislated for in 2011 under the auspices of its most vocal champion, Iain Duncan Smith. The plan was to roll it out by 2017. However, a series of management failures, expensive IT blunders and design faults have seen it fall at least five years behind schedule.The project was legislated for in 2011 under the auspices of its most vocal champion, Iain Duncan Smith. The plan was to roll it out by 2017. However, a series of management failures, expensive IT blunders and design faults have seen it fall at least five years behind schedule.
The original design set out  a minimum 42-day wait for a first payment to claimants when they moved to universal credit (in practice this is often up to 60 days). After sustained pressure, the government announced in the autumn 2017 budget that the wait would be reduced to 35 days from February 2018. This will partially mitigate the impact on many claimants of having no income for six weeks. The wait has led to rent arrears (and in some cases to eviction), hunger (food banks in universal credit areas report notable increases in referrals), use of expensive credit and mental distress. The original design set out  a minimum 42-day wait for a first payment to claimants when they moved to universal credit (in practice this is often up to 60 days). After sustained pressure, the government announced in the autumn 2017 budget that the wait would be reduced to 35 days from February 2018. This will partially mitigate the impact on many claimants of having no income for six weeks. The wait has led to rent arrears (and in some cases to eviction), hunger (food banks in universal credit areas report notable increases in referrals), use of expensive credit and mental distress. 
Ministers have expanded the availability of hardship loans (now repayable over a year) to help new claimants while they wait for payment. And housing benefit will now continue for an extra two weeks after the start of a universal credit claim. However, critics say the five-week waiting time is not enough and want it reduced to two or three weeks.Ministers have expanded the availability of hardship loans (now repayable over a year) to help new claimants while they wait for payment. And housing benefit will now continue for an extra two weeks after the start of a universal credit claim. However, critics say the five-week waiting time is not enough and want it reduced to two or three weeks.
Plenty.  Multibillion-pound cuts to work allowances imposed by the former chancellor George Osborne mean universal credit is far less generous than originally envisaged. According to the Resolution Foundation thinktank, about 2.5m low-income working households will be more than £1,000 a year worse off when they move on to universal credit, reducing work incentives. Landlords are worried that the level of rent arrears racked up by tenants on universal credit could lead to a rise in evictions. It's also not very user-friendly: claimants complain the system is complex, unreliable and difficult to manage, particularly if you have no internet access.Plenty.  Multibillion-pound cuts to work allowances imposed by the former chancellor George Osborne mean universal credit is far less generous than originally envisaged. According to the Resolution Foundation thinktank, about 2.5m low-income working households will be more than £1,000 a year worse off when they move on to universal credit, reducing work incentives. Landlords are worried that the level of rent arrears racked up by tenants on universal credit could lead to a rise in evictions. It's also not very user-friendly: claimants complain the system is complex, unreliable and difficult to manage, particularly if you have no internet access.
With penniless claimants waiting a minimum of six weeks for the new benefit, – and it can often be much longer – staff at the CAB, opposite the office converted into a stage set for I, Daniel Blake, are overwhelmed by the fallout. They offer food bank vouchers to some and direct desperate people to the crisis support team of a council which has lost 40% of its budget since 2010. These are truly desperate times – as the chancellor Phillip Hammond has been reminded as he prepares for the autumn budget. Hammond has pledged to double housebuilding to 300,000 annually, but it will be a triumph of hype over reality unless he provides billions extra to boost construction.With penniless claimants waiting a minimum of six weeks for the new benefit, – and it can often be much longer – staff at the CAB, opposite the office converted into a stage set for I, Daniel Blake, are overwhelmed by the fallout. They offer food bank vouchers to some and direct desperate people to the crisis support team of a council which has lost 40% of its budget since 2010. These are truly desperate times – as the chancellor Phillip Hammond has been reminded as he prepares for the autumn budget. Hammond has pledged to double housebuilding to 300,000 annually, but it will be a triumph of hype over reality unless he provides billions extra to boost construction.
Like the country as a whole, Newcastle has a buoyant housing market in some districts, serving a comfortable majority, alongside lower-income neighbourhoods housing the working poor. That division reflects a new report from the Resolution Foundation showing that this latter group has suffered disproportionately from changes in housing costs over the past decade.Like the country as a whole, Newcastle has a buoyant housing market in some districts, serving a comfortable majority, alongside lower-income neighbourhoods housing the working poor. That division reflects a new report from the Resolution Foundation showing that this latter group has suffered disproportionately from changes in housing costs over the past decade.
It didn’t have to be like this. This government has deliberately sought to subsidise home ownership at the expense of social housing. Only a few weeks ago, Theresa May announced a further £10bn boost to David Cameron’s help-to-buy scheme, subsidising first-time buyers with a 20% loan.It didn’t have to be like this. This government has deliberately sought to subsidise home ownership at the expense of social housing. Only a few weeks ago, Theresa May announced a further £10bn boost to David Cameron’s help-to-buy scheme, subsidising first-time buyers with a 20% loan.
By contrast, the prime minister last month promised only £2bn for a “new generation” of 25,000 council houses and affordable homes to rent by 2021. The state, she said, must get back in the business of building subsidised rented homes for those unable to buy.By contrast, the prime minister last month promised only £2bn for a “new generation” of 25,000 council houses and affordable homes to rent by 2021. The state, she said, must get back in the business of building subsidised rented homes for those unable to buy.
That might make more sense if it reversed £3bn of cuts made in the affordable housing budget since 2010 – and acknowledged that few of the 40,000 so-called “affordable” rented homes built last year were earmarked for social housing. Worse, government policy is reducing the stock of social homes – because councils are being forced to sell houses at discounted rates under a Thatcherite right-to-buy scheme. As a result, around 12,000 council homes are sold in England annually – although Scotland has sensibly now abolished right-to-buy.That might make more sense if it reversed £3bn of cuts made in the affordable housing budget since 2010 – and acknowledged that few of the 40,000 so-called “affordable” rented homes built last year were earmarked for social housing. Worse, government policy is reducing the stock of social homes – because councils are being forced to sell houses at discounted rates under a Thatcherite right-to-buy scheme. As a result, around 12,000 council homes are sold in England annually – although Scotland has sensibly now abolished right-to-buy.
You might remember countless promises from successive ministers that the cash raised from sales would be ploughed into building new homes. Dream on. Only 3,000 council houses are built annually in England.You might remember countless promises from successive ministers that the cash raised from sales would be ploughed into building new homes. Dream on. Only 3,000 council houses are built annually in England.
Last week the Office for National Statistics reclassified housing associations – now the main providers of social housing – as private sector enterprises, giving them more power to borrow now they are off the government’s books. No such luck for councils, which still own around 800,000 social homes. They are prevented by a government borrowing “cap” from using their assets, and guaranteed rental income streams, to raise sufficient funds to build on a scale to meet demand. They reckon 15,000 new homes annually is within their grasp initially. What’s holding them up? You might well ask. As a desperate Blake shouted in the jobcentre: “I am just going round in circles.” Ditto ministers. But that rather flatters a government seemingly bent on compounding the housing crisis with a botched universal credit rollout.Last week the Office for National Statistics reclassified housing associations – now the main providers of social housing – as private sector enterprises, giving them more power to borrow now they are off the government’s books. No such luck for councils, which still own around 800,000 social homes. They are prevented by a government borrowing “cap” from using their assets, and guaranteed rental income streams, to raise sufficient funds to build on a scale to meet demand. They reckon 15,000 new homes annually is within their grasp initially. What’s holding them up? You might well ask. As a desperate Blake shouted in the jobcentre: “I am just going round in circles.” Ditto ministers. But that rather flatters a government seemingly bent on compounding the housing crisis with a botched universal credit rollout.
Social housingSocial housing
HousingHousing
Universal creditUniversal credit
PovertyPoverty
CommunitiesCommunities
Social exclusionSocial exclusion
commentcomment
Share on FacebookShare on Facebook
Share on TwitterShare on Twitter
Share via EmailShare via Email
Share on LinkedInShare on LinkedIn
Share on PinterestShare on Pinterest
Share on Google+Share on Google+
Share on WhatsAppShare on WhatsApp
Share on MessengerShare on Messenger
Reuse this contentReuse this content