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Friday, January 18, 2013

The wrong solution?

This morning's Western Mail carries a report on a DWP pilot in Torfaen which, according to various housing organisations proves that certain tenants are not capable of taking responsibility for their own lives.

Essentially, the pilot is based around the fact that tenants currently have the choice to have their rent paid directly to them or to their landlord. The majority choose to have it paid to their landlord as it is one less thing to worry about. However, all that is to change with money being paid monthly into bank accounts as part of the switchover to Universal Credit.

However, when this was piloted with 435 lower risk tenants their total arrears of £21,457 increased to between £83,000 and £116,000 depending on the time of month. This has led Duncan Forbes, chief executive of Bron Afon Community Housing, to conclude that: “The results so far on the demonstration project and research by others are suggesting that as many as a third of working age tenants will need extensive long term support to cope with a change to direct payments."

Personally, I find it difficult to accept that conclusion simply because there are ways around this which do not involve increases in arrears and potential evictions.

One such solution is being put in place in Swansea where the local credit union is working with the Council and housing associations to sign up all new tenants. This means that if they are willing all their benefits can be paid into their credit union account, their priority debts disbursed and the balance charged to a debit style card that cannot be overdrawn.

There are 22 credit unions in Wales at present. Surely it is not beyond the wit of those working with tenants to set up this sort of arrangement for the more vulnerable.

Given this, I think the DWP spokesman is quite right to say that Universal Credit will give people the chance to take greater control over their finances and provide a much clearer route into work and independence – without them having to move on and off different benefits, or switching back and forth between paying rent and having the state pay it.

What is important is that organisations embrace that principle and make this work.
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