1. Universal Credit - One Year On 2016 NFA/ARCH survey findings Chloe Fletcher NFA Policy Director

2. Impact of Welfare Reform NFA and ARCH have been doing joint surveys on the emerging impacts of welfare reform on the HRA business plan and council tenants since 2013. Focus initially was on the impact of the removal of the spare room subsidy and overall arrears. Now focused on roll out of Universal Credit and emerging issues.

3. The 2015 Survey Findings 31% of tenants were in arrears at the end of the 2014/15 financial year. Regional variations, with landlords in London and the North reporting higher proportions than those in the Midlands and the South. We have a sub set of organisations who participated in all previous surveys. This has allowed us to track arrears over time. o Our data shows that arrears peaked in the first half of 2013/14 before beginning to fall towards the end of that year. o Over 2014/15 there has been a small increase in the proportion of tenants in arrears.

4. The percentage of all tenants in arrears over time

5. Removal of the spare room subsidy In total respondents reported that 10% of their tenants were still affected by the removal of the spare room subsidy at the end of the 2014/15 financial year. Of these, 51% of were in arrears. Significant regional variations in the effect of the removal of the spare room subsidy: o Greatest impact in the North of the country with 13% of tenants affected and only 5% of tenants affected in London. Not much change in situation from the year before.

6. Preparations for Universal Credit All of the respondents to our survey indicated that they are already preparing for Universal Credit. Most common preparations were: o training or briefings for staff o reviewing arrears processes o increasing the provision of money advice/financial inclusion/tenancy support services o improving IT systems o increasing resources for income collection o increasing provision of digital inclusion services

7. Preparations for Universal Credit A majority reported that they are either offering, or exploring offering, a greater choice of direct debit payment dates - in many cases offering these on any day of the month. Other options included: o mobile apps o credit union/jam jar accounts o recurring card payments o web and text payments o paypal o payment barcodes.

8. Initial Experiences of Universal Credit 67% of respondents housed some tenants who were already in receipt of UC. In total these organisations were housing around 2,000 households in receipt of UC. Big variations from one organisation to another - from a low of just a single household to a high of more than 600. Numbers were also concentrated geographically, with around 1,700 out of 2,000 live cases being in the North of the country.

9. Initial Experiences of Universal Credit Overall 89% of those tenants who were already receiving UC were in arrears 34% were subject to an alternative payment arrangement (APA) – meaning that they had accrued at least eight weeks of arrears.

10. Initial Experiences of Universal Credit Respondents reported a number of practical problems with the way in which UC is currently operating. The most common problems reported were: o not receiving timely notification of tenants going on to UC o claimants experiencing hardship while waiting for their first payment o payments of UC being delayed o the housing element of UC being calculated incorrectly or omitted entirely

11. Initial Experiences of Universal Credit

12. In addition respondents also raised the following concerns: o APA payments being sent without the correct tenant reference number (mentioned by three organisations) o APA applications being approved but payment to the claimant continuing in error o only receiving notifications of UC applications and not confirmation payments o notifications being sent to several different offices o inaccurate notifications being received o DWP staff refusing to speak to Income Officers about claims o cancellation of APAs.

13. Findings from 2016 survey 79% of UC claimants are in arrears (a total of around 2,500 households who are both receiving UC and in arrears). This is a decrease 89% in 2015. 56% of these owe more than one month/four weeks’ worth of rent and 46% are subject to an alternative payment arrangement (APA). On average they each owe £321.05, which is slightly higher than the average of £294.57 among all households in arrears.

14. Percentage of households in rent arrears over time

15. Direct Impact of UC on arrears Status of household on UC and in arrears prior to UC claim Pre-existing arrears is a significant issue About half were not in arrears 32% new tenants

16. Impact on tenants Anecdotal evidence of: o Getting into debt and severe financial problems at transition to UC due to having to wait for at least 6 weeks for initial payment. o Increase in use of foodbanks. o Increased presence of loan sharks on estates. o Increased demand for money advice and local hardship funds.

17. Factors causing higher levels of arrears among UC claimants

18. Which improvements to UC would be likely to reduce arrears?

19. Support Arrangements: DWP and the Social Housing Sector NFA a member of the Core Landlord Working Group DWP have been working proactively with the sector to try to prevent problems: o Direct Demonstration Projects o Digital Pilots o Local Support Services Framework - for budgeting advice and support o Landlord information packs o Work with Money Advice o Trusted Partner Pilot for APAs

20. What does successful roll out look like? Two main problems: o Delays and mistakes in processing claims o Systematic problems with the design of the scheme The first requires further training for DWP staff, increased resources and staffing for DWP to oversee the roll out. The second requires the Government to change its policy on the delay in the 1 st payment and review the month in arrears policy.

21. What the NFA is calling for For the Government to allow “payment direct” to landlords to be a tenant choice for all tenants. For Universal Credit claims to be processed quicker. For the waiting period for payment under Universal Credit to be scrapped.

22. What the Government says Will continue to improve the system to ensure people paid quicker and correctly first time. Working with social landlords to identify issues and improve administration – e.g. email notification. Want to improve links with Job Centres and Landlords to share information and pick up money issues. Testing Trusted Partner status for APAs. Would like social landlords to move to monthly tenancies and monthly rents to align with new UC world.

23. NATIONAL FEDERATION OF ALMOs www.almos.org.uk chloe.fletcher@almos.org.uk