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Universal Credit (Housing)

Volume 542: debated on Monday 12 March 2012

3. What recent discussions he has had with the Secretary of State for Work and Pensions on direct payments to tenants for the housing element of universal credit. (98954)

We are working with the Department for Work and Pensions, local authorities and housing associations on direct payment demonstration projects, and developing a successful process for paying universal credit directly to tenants which will encourage tenants to manage their own budgets.

There are 23,000 local authority-owned homes in my borough of Dudley, and the local authority is extremely concerned about the resources that will be required for the collection of payments once housing benefit is paid directly to tenants. Will my hon. Friend seek guidance from the Department for Work and Pensions on what help can be given to authorities?

I can reassure my hon. Friend that the pilot projects are designed precisely to establish whether those concerns are justified or not. Members representing the five areas involved will have received a letter about the projects from the Department for Work and Pensions. Paying tenants directly eases the transition into work, and is already happening in most cases in the private rented sector.

I believe that some 20,000 local authority employees are currently involved in the delivery of housing benefit. What will happen to them when housing benefit is absorbed into universal credit in 18 months’ time?

In October 2013 a start will be made on the transfer with new claimants, and there will then be a progressive integration until 2017. There will be a series of steps as claimants move to universal credit. The demonstration projects will assess all aspects of the delivery of the scheme, and will be reported on to the House in due course.

Is the Minister aware that registered social landlords are already threatened with an increase in borrowing costs as a result of arrears and the cost of collection of the direct payments?

As my hon. Friend will know, housing benefit expenditure has been rising rapidly, from £14 billion 10 years ago to £21 billion now. The reform of that benefit is included in the social security measures that have just been approved by the House.

It is not just Dudley borough council and the black country that are concerned. So is Birmingham city council, which is the largest authority in Europe. Given that the Minister is running pilots, can he tell us how he will define success?

The pilots are taking place in five different local authorities, including both urban and rural authorities. The purpose of the demonstrations is to ensure that we get the mechanisms, support and financial tools right, so that landlords’ financial position is protected and tenants receive the right support.