Universal Credit: Lowestoft

Jim Shannon Excerpts

Tuesday 27th June 2017 Commons Chamber

[Peter Aldous]

I have a constituent who was an ESA claimant. He was required to take part in a work capability assessment. His WCA was carried out, and it was decided that he no longer had limited capability for work and work-related activity. His ESA claim was thus disallowed. His appeal against that decision was successful, but as income-related ESA had been abolished and he had been required to transition to universal credit, he has found himself significantly worse off and facing serious hardship through no fault of his own and with no support to help him through a very challenging time.

Waveney District Council and Anglia Revenues Partnership have also identified the following ongoing concerns. First, universal credit payment delays and cash flow difficulties continue to be a problem for the council in respect of providing temporary accommodation. They urgently need a decision to be made to restore such administration back to councils so that it is treated in the same way as supported accommodation. Secondly, housing benefit recovery in universal credit remains a significant concern. Local authorities and the Local Government Association have proposed that housing benefit debt should be transferred to the Treasury to produce a better outcome for the public finances. Recovery from universal credit will be non-existent, thereby burdening councils with debt that they will not be able to recover.

Thirdly, although universal credit decisions appear to be improving, the housing element is often still being received only in the second or third monthly payment. This is a deterioration compared with national housing benefit performance. Fourthly, the continuing lack of universal credit management information does not provide an insight to assist councils to manage customers’ and landlords’ expectations. Finally, there are no plans for universal credit to share data with councils about housing benefit cases migrating to universal credit. This is needed for local council tax support schemes, discretionary housing payments and supported accommodation claims.

A further issue that should be highlighted is the fact that since universal credit was rolled out in Lowestoft, the level of unemployment has increased. In May 2015, it was at a low of 2.5%. It stood at 3% when universal credit was introduced in May 2016, and it had risen to 5.1% in May 2017. Much of the increase is due to the fact that, under universal credit, a broader span of claimants are required to look for work than was the case under jobseeker’s allowance. However, this raises the question of whether universal credit is fulfilling one of its objectives—that of better preparing claimants for the workplace and making it easier for them to move into full-time employment. We need to look at that to ensure that it is being adequately addressed.

[Jim Shannon (Strangford) (DUP)]

I sought the hon. Gentleman’s permission before asking him to give way. Does he understand, as many of us do, that the switchover to universal credit is proving very difficult? Does he agree that those who have physical and mental issues need a dedicated helpline to ensure that those vulnerable people do not feel overwhelmed and that they can understand the process of change? Many of them do not.

[Peter Aldous]

I am grateful to my hon. Friend for that intervention, and I agree with him. He talks about a dedicated helpline and, yes, that may be one way forward. I would also suggest that there needs to be front of house support and assistance in the jobcentres themselves.

Delays in the paying of universal credit have led to rent arrears building up and, as I mentioned, the situation is being compounded by the fact that the housing element has often not been included in the first payment. The feedback from the DWP nationally is that the timing of payments is improving and that if a tenant has a reasonable expectation of receiving their housing cost as part of the universal credit payment, the landlord should not take action to gain possession of a property and thus the tenant should not face the risk of eviction. In real life, it needs to be borne in mind that that approach is easier said than done and that the landlords have many costs and commitments themselves. Landlords are often in a position to reluctantly have to issue eviction notices as a last resort, but it should be pointed out that many landlords own only one or two properties and that the rents that they receive are a vital part of their income—often retirement income.

Delays in the payment of the housing element are triggering a downward spiral of events: arrears leading to evictions, leading to an increase in homelessness, putting added pressure on local authorities and housing associations to house those who are evicted. In due course, there will be a reduction in the supply of housing as landlords decide not to let to universal credit claimants.

--- Later in debate ---

[Damian Hinds]

No, it does not mean that. Obviously, people come into the benefits system and may be receiving benefits for a period of time but then go into work that is sufficiently remunerative to mean that they do not fall within the universal credit system. As the hon. Lady will know, people’s circumstances change, and can do so often.

As I was saying, the digital take-up of universal credit is a great success story, with 99% of UC new claims made online, which will mean that in the long run the service is more expedient and more user-friendly. Overall, 82% of universal credit customers reported they were satisfied or very satisfied with the service, and figures show that it is working. Claimants are spending twice as much time looking for a job as under the old system and they are moving into work faster, with 113 people moving into work under universal credit for every 100 who were doing so under the pre-existing system.

One result of the roll-out of universal credit full service in my hon. Friend’s constituency—I grant that this may seem paradoxical—is that the claimant count has risen since the full service went live in May 2016. As he rightly acknowledged, that is because under universal credit the count is extended—it is broader—to cover a wider group of claimants than under the old jobseeker’s allowance benefit. This is part of universal credit’s design and ambition to encourage and support more people into work.

My hon. Friend has deep roots in the constituency and community he represents, and I am very aware that he works closely with the local authorities in his constituency to make sure the voice of East Anglia is always heard. I was very pleased to have the chance to visit Lowestoft jobcentre earlier this year—he mentioned that—accompanied by the leaders of the Waveney and Great Yarmouth councils. I am also aware that he has made subsequent visits to the jobcentre, which I hope he also found useful. That visit was a great opportunity for me to see how we are delivering universal credit in his constituency and to hear at first hand some of the concerns people have had.

I also want to join my hon. Friend in expressing condolences following the death of Colin Law, the leader of Waveney District Council, in May. Councillor Law was a long-standing public servant who made a big contribution to the community he represented, as was manifested in the example my hon. Friend gave of his commitment even into his ill health. He will be missed by those on all sides of the political divide.

Given the ambition and scale of change that universal credit introduces, there are bound to be issues that arise as the service is rolled out. In particular, there are clearly concerns over the challenges some claimants face when managing a monthly budget for the first time, but let me assure Members that the Department has already been making inroads on this issue and there are many good reasons to feel positive about the future.

I take the opportunity to highlight how universal credit helps people looking for work in my hon. Friend’s constituency. There is a high level of seasonal work in the Lowestoft area. Before the introduction of universal credit, many people could have been reluctant to take up short-term or irregular work because of the old 16-hour limit with some of the legacy benefits. Since the launch of universal credit, jobcentre staff have contacted the large local employers, leisure parks and holiday resorts, to help generate job opportunities for claimants. We have run popular job fairs, attended by more than 1,700 claimants, promoting these openings. I know that my hon. Friend has had a lot of personal involvement in running job fairs, and other employability and opportunity events.

Universal credit claimants can now take up work, which may initially be just at the weekend and in school holidays, that builds up to extra hours as the season progresses. Claimants have the flexibility to take on extra hours without worrying about having to stop and then restart multiple benefit claims. Under universal credit, employers in Lowestoft and Great Yarmouth are able to offer extra work at short notice to a workforce that can make the most of those opportunities without the additional administrative burden.

Lowestoft and Great Yarmouth jobcentres were among the first to roll out the universal credit service to all claimant types, which has given us invaluable insight into what works and what we can do better. From my visits and from the correspondence that I have had with my hon. Friend and with the local authorities in his constituency it became clear that we needed to be better at gathering information and improving the speed and accuracy of payments to claimants. It was also clear that we needed to do a better job of speaking with landlords in both the private and social sector about the changes that universal credit would bring.

I am pleased to report that this valuable feedback has helped us introduce real improvements to the way we do things: we have removed delays and data verification that were causing some of the payments to go out late; and we have introduced a “Housing Confident” scheme to ensure that universal credit work coaches talk to claimants about housing and that work coaches are alert to the support that claimants might need. It is about properly understanding the claimant’s needs, and this can extend to providing budgeting advice or, when needed, arranging for direct payments to landlords.

We have made improvements to the service that we offer private and social landlords. Thanks to feedback from landlords, we have made improvements to the way we set up direct payments of rent to landlords with an easier to use application form. That means that we are getting those payments out to landlords more quickly. We are also exploring how we can make it easier for landlords to find out the status of the application for a direct payment and we will be making an announcement about that soon.

Universal credit also brings big improvements for private landlords whose tenants get into arrears. Under the old system, landlords would need to apply for recovery of arrears via a third party deduction, often at a low repayment rate, which could mean a long wait before landlords got back their rent. In universal credit, it is easier and quicker to set up an arrears payment for landlords. In addition, under universal credit, repayment for private landlords can be at a higher rate—up to 20% where claimants can afford it. That means that claimants can get on top of their finances and landlords can get the money they are owed more quickly.

These actions are having results. Our internal figures show that far more claimants are getting the right money on time. We aim to make this information public in the near future. I know that my hon. Friend has acknowledged these improvements in performance.

[Jim Shannon]

In my previous intervention, I suggested that perhaps a dedicated helpline would be one way of addressing the issues. The hon. Member for Waveney (Peter Aldous) responded by saying that some more frontline staff would also be of help. Would the Minister consider both of those suggestions?

[Damian Hinds]

In response to the points raised by my hon. Friend about the roll-out of universal credit in Lowestoft, I said that I would come on to some of the questions around our customers and claimants—people with particular needs and complex needs. The essential point is that, in jobcentres, our staff see the full range of society and of course we must have the wherewithal to help those people as best we can. That does involve being responsive to different types of people and their different needs. I am confident that our staff do that in the correct way, but can we learn more? Of course we can.

I do appreciate the concern that exists around rent arrears. It is an issue that matters to many people. We have had a chance to debate that matter in a recent Adjournment debate in this House. As I said at that time, there are many complex and overlapping factors at play, and the role of universal credit is by no means the sole factor contributing to rent arrears. Our research shows that the majority of universal credit claimants are comfortable managing their own budget. Furthermore, we know that, after four months, the proportion of universal credit claimants who were in arrears at the start of their claim fell by a third.

Let me reassure the House that there are safeguards in place for claimants. We can advance up to half of a universal credit payment at the start of the claim. Our work coaches talk to claimants about their financial situation and can also refer claimants for support to help them manage their budget.

If claimants do not want to talk about their finances face to face, our new “Money Manager” website, developed in co-operation with the Money Advice Service, gives claimants practical support and advice. There are a number of alternative payment arrangements available, which include paying rent costs directly to landlords but also making more frequent payments to claimants and splitting universal credit payments in cases of domestic abuse. Our research shows that over time, claimants successfully reduce their arrears.

I want to turn to a couple of the other specifics mentioned by my hon. Friend the Member for Waveney. On emergency and temporary accommodation, we are aware that the transitory nature of universal credit temporary accommodation claims can cause problems to do with the timing of when people will be in temporary accommodation, the assessment period and when the payments are made. We also recognise that this has resulted in some difficulties for local authorities and tenants in emergency or short-term accommodation. Our consultation on supported accommodation, which closed on 13 February, asked whether devolving shared accommodation to local authorities might also work as an approach for temporary accommodation. We are considering the responses to that consultation and the joint Select Committee on Communities and Local Government and Select Committee on Work and Pensions report, and we will work with colleagues across Government and in the devolved Administrations to set out further details of our plans as soon as we can.

On the question of claimants with complex needs, we make sure that our work coaches have the flexibility to shape support for individuals in difficult and different circumstances. Work coaches can adjust work search requirements to allow claimants to prioritise solutions to their issues, such as homelessness or addiction. We are also working with our partners to target resources most effectively. Hon. Members will be aware of the range of third-party services and partnership arrangements in place in a large number of jobcentres. We have also appointed vulnerable people officers in jobcentres to deal with claimants who face significant challenges. These officers work closely with the universal credit service centre to identify and resolve issues quickly.

The DWP’s response to the Public Accounts Committee’s report in February 2017 made a commitment to write to the Committee in spring 2017 to set out the impact of the changes to the programme on operational costs, staff and claimants. As a result of the general election, we will now send our response once the Committee has been reinstated. We also plan to publish a range of management information on universal credit later this year.

I recognise, of course, that there are areas for improvement in our service, but with every release of new software and every office that goes live with the full digital service, enhancements are made that improve the experience of using the service for staff, for claimants, for landlords and for our delivery partners. My hon. Friend the Member for Waveney has seen for himself the drive, commitment and passion that so many of our staff, stakeholders and people across the programme have. They want to see this revolutionary welfare reform through, and I am confident that they will.

Question put and agreed to.