Landlord threatens mass evictions ahead of universal credit rollout

Powered by Guardian.co.ukThis article titled “Landlord threatens mass evictions ahead of universal credit rollout” was written by Jessica Elgot, for theguardian.com on Wednesday 15th November 2017 15.27 UTC

A Lincolnshire property company has threatened all of its tenants with eviction if they fail to pay their rent because of delays in receiving universal credit payments, sending all tenants pre-emptive notices ahead of the rollout of the welfare reform.

The letter from GAP Property in Grimsby was highlighted by Jeremy Corbyn in his weekly clash with Theresa May at prime minister’s questions. Corbyn said tenants of the property management company faced the prospect of being made homeless before Christmas. May said she would look into the “particular case” raised by the Labour leader.

GAP Property said the changes would affect the vast majority of its tenants and it needed to take action to avoid a slew of rent arrears.

Universal credit is due to be rolled out across north-east Lincolnshire from 13 December and new applicants will have a minimum six-week wait for their first payments, though many have reported longer delays.

What is universal credit?

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 divide, was to simplify the benefits system and increase the incentives for people to work, rather than stay on benefits.

How long has it been around?

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.

What is the biggest problem?

There is a minimum 42-day wait for a first payment endured by new claimants when they move to universal credit (in practice this is often up to 60 days). For many low-income claimants, who lack savings, this in effect leaves them without cash for six weeks. The well-documented consequences for claimants of this are rent arrears (leading in some cases to eviction), hunger (food banks in universal credit areas report striking increases in referrals), use of expensive credit, and mental distress.

Are there other problems?

Plenty. Landlords are worried about the level of rent arrears racked up by tenants on universal credit. Unchecked, this will lead to a spike in evictions. Claimants complain that universal credit is bafflingly complex, unreliable, and difficult to manage, particularly if you are without internet access. 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.

The letter from the agency, seen by the Guardian, says it is “not intended to cause alarm, rather to inform you of the problems that could very well occur during the rollout of universal credit”.

It calls the flagship welfare reform “an extraordinary event that requires both you and us to take extraordinary measures”.

It tells tenants: “GAP Property cannot sustain arrears at the potential levels universal credit could create (this affects the vast majority of our tenants), therefore we find it necessary to issue your Notice Seeking Possession … that has been enclosed to be exercised only in the event that you fail to pay your rent in accordance with the terms of your tenancy (in full and on the due date).”

The letter warns tenants will face eviction if there is a delay in payment to the landlord. “IF YOU DO NOT PAY YOUR RENT WE WILL HAVE NO OPTION BUT TO ASK YOU TO LEAVE AND RECOVER LOSSES FROM YOUR GUARANTOR,” it writes, in capital letters.

The letter also includes a formal notice of possession as well as a guide to universal credit for tenants.

The company’s website says the agency was established more than 30 years ago by Guy Piggott, chair of the local Humber Landlords Association, with a “wide range of properties from rooms in shared houses, flats, to five-bedroom detached houses”.

Quoting from the letter during PMQs, Corbyn said: “Will the prime minister pause universal credit so it can be fixed? Or does she think it is right to put thousands of families through Christmas in the trauma of knowing they are about to be evicted because they are in rent arrears because of universal credit?”

In response, May said she wanted to “look at the issue of this particular case” but said the government wanted people to be able to manage their own budgets.

“There have been concerns raised over the issue of people being able to manage their budgets to pay rent,” she said. “What we see after four months is that those on universal credit in rent arrears has fallen by one-third.”

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Six-week wait for universal credit set to be reduced

Powered by Guardian.co.ukThis article titled “Six-week wait for universal credit set to be reduced” was written by Heather Stewart and Patrick Butler, for theguardian.com on Wednesday 15th November 2017 11.28 UTC

The government is preparing to confirm that it will cut the six-week waiting time for universal credit, caving in to Conservative backbench rebels.

After being promised concessions by ministers, a group of Tory MPs concerned about the impact of the delay on their constituents were persuaded not to vote against the government in a Labour-led debate on universal credit last month.

The six-week wait was the central concern of the group, which includes Heidi Allen and Johnny Mercer, and the government is expected to reduce it, most likely by eliminating the seven-day mandatory waiting time at the start of any new claim.

The move comes as MPs prepare to vote on a cross-party motion to cut the wait for a first payment from 42 days to a month. The backbench business debate in the House of Commons on Thursday will focus on the recommendations of the recent work and pensions committee inquiry report on universal credit.

The committee chair, Frank Field, warned that a government defeat would send a clear message to ministers that the long wait had to go: “Universal credit’s design and implementation have been beset with difficulties that knock claimants into hunger, debt and homelessness, but the most glaring of these in the first instance is the six-week wait for payment.

“I doubt many households in this country could get by for six weeks, and for many, much longer, with no income, never mind those striving close to the breadline. The baked-in wait for payment is cruel and unrealistic and government has not been able to offer any proper justification for it.”

What is universal credit?

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 divide, was to simplify the benefits system and increase the incentives for people to work, rather than stay on benefits.

How long has it been around?

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.

What is the biggest problem?

There is a minimum 42-day wait for a first payment endured by new claimants when they move to universal credit (in practice this is often up to 60 days). For many low-income claimants, who lack savings, this in effect leaves them without cash for six weeks. The well-documented consequences for claimants of this are rent arrears (leading in some cases to eviction), hunger (food banks in universal credit areas report striking increases in referrals), use of expensive credit, and mental distress.

Are there other problems?

Plenty. Landlords are worried about the level of rent arrears racked up by tenants on universal credit. Unchecked, this will lead to a spike in evictions. Claimants complain that universal credit is bafflingly complex, unreliable, and difficult to manage, particularly if you are without internet access. 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.

 

Last month, a committee report described the 42-day wait as a “major obstacle” to the policy’s success. It found the delay caused claimants to run up debts and/or turn to foodbanks. “Most low-income families simply do not have the savings to see them through such an extended period,” it said.

The Resolution Foundation has estimated that cutting the waiting time to four weeks would cost the government £150m-£200m a year. It is unclear where the Treasury would find the money.

The thinktank said in a recent report: “The foundation recommends shortening waits considerably by scrapping the current seven-day waiting period and compressing payment processing days to ensure payments happen a week and a half earlier.”

The government is unlikely to go lower than four weeks because the Department for Work and Pensions (DWP) uses one month’s of earnings data to calculate recipients’ entitlements. The universal credit system uses monthly payments as part of its aim to mimic earnings.

A government source told Sky News that a concession on the waiting time would come early next week, as Philip Hammond, the chancellor, prepares to deliver the budget on Wednesday.

Universal credit, which combines six benefits, is being progressively rolled out across the country. It is meant to improve work incentives, but has been made significantly less generous since it was first designed, as the Treasury seeks to cut the welfare bill.

Hammond has stressed to cabinet colleagues that there is little cash to spare to cushion the blow of the new system, but his focus on balancing the books is frustrating fellow Tory MPs, who are concerned about the electoral impact of continued austerity.

A Treasury spokesman refused to comment on reports that the budget would soften the universal credit regime.

The employment minister Damian Hinds said: “I won’t be commenting on budget speculation, but we have made clear that no one has to wait for six weeks before they get their first full payment because they can get an advance, which is interest-free and recovered over six months.

“We have always said that we are continually looking to improve the system and the bottom line is that universal credit is working and getting more people into work.”

Jeremy Corbyn, the Labour leader, has repeatedly made universal credit his focus at prime minister’s questions, and Labour held an opposition day debate on the issue last month in an attempt to expose Conservative divisions and draw attention to concerns about the system.

The DWP recently announced that charges for calling the universal credit helpline would be scrapped, after Corbyn complained that it was costing up to 55p a minute.

The proposed shortening of the waiting time was welcomed by anti-poverty charities and thinktanks, although there were concerns that four weeks was still too long for low-income claimants to wait, and more needed to be done to restore the benefit’s flagging credibility.

David Finch, a senior economic analyst at the Resolution Foundation, said: “Questions remain over how long the wait will be reduced by, and whether more flexibility can be built into the system, given that three in five new claimants moving out of work are paid either weekly or fortnightly.

“Today’s move should signal the start of far wider reform to universal credit to make it fit for purpose, and help it deliver on its huge potential.”

Recent research by Peabody housing association estimated that the 42-day wait would result in more than 20,000 low-income families having no income this Christmas. It called for the period to be cut to two weeks.

There are concerns that design and administration changes alone will not mitigate the impact of universal credit on families. The Resolution Foundation has said cuts to the generosity of universal credit will leave 1 million working households an average of £2,800 a year worse off by 2022.

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Charities warn of ‘devastating cost’ of cuts to children’s services

Powered by Guardian.co.ukThis article titled “Charities warn of ‘devastating cost’ of cuts to children’s services” was written by Sally Weale Education correspondent, for The Guardian on Wednesday 15th November 2017 00.01 UTC

Local authority children’s services are being reduced to crisis-driven firefighting as a result of “crippling” central government funding cuts, according to a report.

Three leading children’s charities are warning that early intervention services, designed to prevent problems escalating and children suffering a crisis, have been hardest hit by budget cuts.

As a result, councils can only afford to get involved when children have already reached crisis point, which may then result in more costly interventions such as being taken into care, the charities say.

The Turning the Tide report by the Children’s Society, Action for Children and the National Children’s Bureau says council spending on early intervention services, designed to spot signs of neglect and abuse, fell by 40% between 2010/11 and 2015/16.

The £2.4bn government funding cuts come at a time of growing demand for children’s services, with a 108% increase in child protection investigations, according to the report.

The report also claimed that the poorest children have been the hardest hit, with the most deprived councils in England cutting spending on children’s services by almost a quarter (23%), six times as much as the least deprived councils.

Sir Tony Hawkhead, the chief executive of Action for Children, said: “Leaving local authorities without the necessary resources to help children and families at an early stage has a devastating cost, both in social and financial terms.

“With no long-term solution on the table, children’s services are on an unstable and dangerous footing. We’re calling on the government to prioritise the services children need before this crisis turns into a catastrophe for the next generation of children and families.”

Among the early intervention services affected by the cuts are parenting classes, children’s and youth centres, substance misuse prevention, teenage pregnancy support and short breaks for disabled children.

Matthew Reed, the chief executive of the Children’s Society, added: “Councils are being denied the funding they need to provide safe, effective children’s services and spending on vital support is collapsing as a result.

“We are at a tipping point, with more cuts yet to come. The government must step up and give councils the funds they need to protect our children.

A government spokesperson said: “Councils have a duty to provide appropriate care for the children in their area, including responding to referrals.

“We are supporting them to deliver efficient services by investing £200m in the children’s social care innovation programme – this includes projects providing targeted support for children in need.”

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People left without heating due to spending cuts, says fuel poverty group

Powered by Guardian.co.ukThis article titled “People left without heating due to spending cuts, says fuel poverty group” was written by Adam Vaughan, for The Guardian on Sunday 12th November 2017 21.27 UTC

No gas boilers have been repaired since April under a government scheme intended to combat fuel poverty, as a result of spending cuts that risk leaving poorer Britons unprotected from the cold at home, according to a fuel poverty pressure group.

National Energy Action (NEA), which obtained the figures from the Department for Business, Energy and Industrial Strategy (BEIS), said the drop in official support via the energy company obligation (ECO) threatens the health of low-income households. Peter Smith, NEA’s director of policy, said: “This leaves thousands of people with existing medical conditions facing a winter without any effective space heating or hot water.”

Consumers fund the ECO through their energy bills, but its annual budget has been cut from £800m to £640m as part of government attempts to reduce bills. The scheme’s spending has been concentrated on replacing a small number of faulty boilers, rather than repairing them.

But the number of replacement boilers being installed through the ECO programme has fallen from a high of 85,000 in 2013 to a low of 7,000 between April and June this year. No gas boilers have been repaired since April.

Temperatures in Britain were expected to drop below freezing on Sunday night as autumn turns to winter, with forecasters predicting that a cold spell could last for several weeks. A scattering of snow was reported in Cumbria on Sunday, the first in the UK this winter, with snowfall expected on higher ground in Scotland on Monday.

Dan Jarvis, the Labour MP for Barnsley Central, said the decline in funding for vulnerable households was causing unnecessary hardship. “Sadly I know all too well this is bound to have very negative consequences in my constituency, causing needless winter deaths and acute suffering.”

The lack of support for repairing and replacing boilers has been raised several times in parliament recently, but NEA accused the government of failing to recognise the severity of the problem. NEA said its research showed engineers and local authorities were making daily contact with people who had had their gas appliances condemned but could not afford to fix them because of a lack of official support.

The charity estimated that over the past four years more than £5bn of public money has been spent treating health problems caused by cold homes. It argues that funds should be spent making vulnerable households warmer and more efficient.

At the recent launch of the government’s clean growth strategy, ministers committed to continuing the ECO scheme until 2028. But it is unclear how much funding it will receive.

A spokesman for BEIS defended its policy, saying: “Government action is decreasing the fuel poverty gap and we made a long-term commitment to continue funding the ECO programme at current levels as part of the clean growth strategy.

“We’re replacing boilers rather than repairing them, with 13,000 installed between April and August alone, and funds available for thousands more. Overall, the ECO scheme is on track to upgrade the energy efficiency of well over 200,000 homes in 2017.”

Chris Bielby, the chair of the charity Gas Safety Trust, which aims to prevent carbon monoxide poisoning, shares the NEA’s concerns. “We know the tragic and fatal consequences of not being able to afford to service, repair or replace unsafe gas heating appliances, particularly for the most vulnerable in our society.

“It can put households or nearby neighbours at risk as a result of carbon monoxide poisoning or potentially, in extreme circumstances, cause fires or gas explosions,” Bielby warned.

The problem could inadvertently be exacerbated by the rollout of smart meters, which send readings direct to energy suppliers and are being offered to every home by the end of 2020, NEA said. Engineers fitting the meters are obliged to turn off unsafe gas appliances they find during their visits.

Industry is urging ministers to take action in the autumn budget to help address the lack of funding for vulnerable households to fix their boilers.

Mike Foster, the chief executive of the Energy and Utilities Alliance, which represents boiler manufacturers, said: “The upcoming budget must address this worrying gap in support.”

The interventions came after the energy regulator, Ofgem, warned last month that it was concerned some consumers were rationing their use of gas in response to higher energy prices.

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