Universal Credit: Landlords to be paid direct but changes need to go much further
Amber Rudd, the new Work and Pensions Secretary has announced a welcome set of reforms to Universal Credit saying that the system she inherited was not as "effective" or "compassionate" as she wanted.
Aiming to assuage concerns surrounding the policy, her first major speech on the policy today confirmed that she was delaying asking Parliament for permission to move three million people on to UC until next year, after a pilot of the transfer from existing benefits has been completed.
The first big announcement is the scrapping of a controversial plan to apply a two-child benefit cap retrospectively to new Universal Credit (UC) claimants, which is estimated to help around 15,000 families.
She said it was not "reasonable" to impose the two-child cap - intended to force claimants to make decisions on whether they can afford a third child in the same way as those in work - on families which already have more than two offspring.
The second big change announced that an end is in sight to the longstanding benefit freeze introduced by former chancellor George Osborne in 2016, announcing she had no expectation to legislate on renewing the freeze in 2020.
Also announced are a range of changes that will aim to make the more "individual" by tailoring it to claimants' needs by making payments more regular or paying rent money direct to landlords. In regard to this announcement, we look forward to the department outlining plans for how this will be achieved.
New online system
Furthermore, the DWP has listened to the NLA regarding the numerous faults in the online system which led to many administrative errors and has subsequently announced they will be building a new online system to process claims, which allow landlords to be paid directly. This news is greatly welcomed, we have been working with the DWP closely to speed up and improve the process by which direct payments are made to the landlord, this change will change will help bring greater assurances to landlords and provide tenants greater security with the knowledge that rent payments will be made on time.
Finally, she announced she also would build a "nudge" into the system to ensure that a couple's UC payment was "much more likely" to go to children's primary care-giver, usually the mother.
Despite consistent delays and uncertainty surrounding the policy, Ms Rudd told BBC Radio 4's Today programme that she remained committed to the completion of the "migration" of claimants of six old benefits onto UC by 2023.
Speaking on the changes, Amber Rudd said:
"This is a really ambitious project. It's going to impact on 8 million people's lives when it is finally completed.
"Maybe things that were were proposed previously weren't effective or weren't compassionate in the way that I want them to be.
Defending the benefit freeze, she added:
"It was the right policy at the time, it's got one more year to run, I look forward to it coming off."
Reacting to the changes, Richard Lambert, chief executive of the NLA commented:
“Landlords have long supported the principles underlying Universal Credit but have not been convinced by any of its practical implementations.
“Amber Rudd’s fresh approach is welcome, but needs to go much further if she wants Universal Credit to be truly effective and compassionate.
“Payments have fallen well behind rents across the country and will continue to do so while the freeze remains in place.
“In committing to end the freeze in 2020, all she’s saying is once the hole's a bit deeper, I’ll stop digging.”
Alongside today's policy changes, the Government has given further clarity on the managed migration process, confirming the DWP will press ahead with a pilot scheme in July 2019, migrating 10,000 people from legacy benefits over to Universal Credit.
Commenting on the pilot, Ms Rudd argued that the transition 'needs to be done well', saying that lessons from the scheme will form the future strategy for the rollout. It has yet to be confirmed what areas the scheme will take place, or how the department plans to progress, the NLA will continue to press the DWP for clarity regarding the pilot scheme.
A chance for you to shape the system: Landlord participation in DWP research
The DWP are working with us to improve processes such as APAs and direct payment to the landlord. This is an opportunity for NLA members to refine the processes and have a direct voice in the direction of the Universal Credit.
The feedback and experiences of our members will be crucial to the success of the policy, with the DWP now beginning to recognise the critical role private landlords play in the process.
For those interested in volunteering, you can contact Jude Eccles on JUDE.ECCLES@DWP.GSI.GOV.UK, if you wish to learn more, you can also contact: firstname.lastname@example.org