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Direct payments – time for a u-turn?

Published by Phil Morgan on Tuesday, February 26th, 2013 at 11:06 am

The results of the recent pilots of direct payment of benefits to tenants makes sobering reading. These benefits, currently paid to social landlords, have been paid to tenants in six different landlords. And these pilots show that something is truly rotten in the state of Direct Payment.

Unsurprisingly arrears rise when direct payment is introduced. They rise a lot. By 8%. This means that there is less money coming in to provide housing services such as repairs and maintenance. And even more money gets spent trying to stop arrears happening. Oh and then more money spent dealing with arrears. And if arrears really mount up add in the cost of eviction. And then rehousing evicted tenants probably in the private rented sector costing even more housing benefit than now.

And the impact is felt most by vulnerable tenants – hardly the group of tenants whose lives need uncertainty about their housing.

Unlike the other welfare reform changes impacting on tenants not a single penny will be saved through direct payment. In fact it will cost money.

What’s really frustrating is that direct payment is happening at the same time as other changes through welfare reform. This means that many tenants of working age are coming to terms with paying extra council tax and the bedroom tax. This means that they will be having real issues with rent payment from the beginning. Adding in direct payment will be like throwing a lighted match into petrol.

Admitting you got it wrong is a hard thing to do in politics. The adversarial and tribal nature of politics means that any deviation from your previous position is seized upon as a lack of consistency or even worse judgement, normally driven by ideology. Whereas your opponents, or commentators are always driven by common sense and sound values. Hence politicians spend an inordinate amount of time pretending U-turns are not really U-turns at all but ‘clarifications of policy’.

The DWP state that the results of the pilots are “encouraging” – the kind of statement that Sir Humphrey Appleton would make before congratulating Jim Hacker on a “brave” decision. They’re not encouraging. They state the obvious – that direct payment will result in increased arrears and increased costs whilst not contributing a single penny to reducing the deficit.

For Ian Duncan Smith it won’t be easy, post ruling about the legality of welfare to work schemes, to do a U-turn on an area which he feels encourages personal responsibility. But the pilots give him enough cover to take stock, commission further work and look for his objective to be met in a time scale that doesn’t threaten his other welfare reforms. Time for a “clarification of policy” minister?

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