Announcement on direct payment pilots delayed until New Year

Published by Ross Macmillan for 24dash.com in Housing and also in Central Government, Local Government

The Government has put back the date it is to formally announce the six housing association and councils who will road test direct benefit payments to tenants next year.

The measure - which will come in with Universal Credit in 2013 - will see tenants paid their benefits directly, a move which landlords fear could increase their arrears and preferential borrowing rates from banks.

In a bid to assure the sector of its impacts, Lord Freud announced in September that a number of demonstration projects in each UK region would road test direct payments from June 2012.

The pilots will test how to support tenants and landlords on the introduction of direct payments – such as offering budgeting advice to tenants and placing a trigger which switches the housing payment to landlords if the tenant gets behind with their rent.

The Department for Work and Pensions (DWP) had hoped to inform successful organisations before Christmas, but a spokesperson confirmed today the announcement will now be made next year; understood to be early January.

The DWP spokesperson said: "We announced in September that six demonstration projects would take place next year to test how direct payments to tenants could work. Over 70 volunteer organisations have come forward and 25 placed actual bids. We are now considering all of the bids and we will announce the successful volunteers as soon as we can."

The spokesman confirmed interested parties had been notified of the delay.

Some of the organisations who have expressed an interest in the pilots include Family Mosaic, City West Housing Trust and Wakefield and District Housing.

It was announced this month that a review of the pilots will be led by Professor Paul Hickman from the Centre for Regional Economic and Social Research at Sheffield Hallam University.

The Government says that around 30% of social housing tenants will be affected by the shift to direct payments, and that certain groups  - pensioners and vulnerable tenants - will continue to see their housing costs paid directly to their landlord.