Housing associations and councils chosen to pilot direct benefit payments

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

The Government has revealed the councils and housing associations who have been chosen to road test the Government's direct payments plan.

The demonstration projects, which will take place from June 2012 until June 2013, will test how claimants can manage housing benefit monthly payments ahead of the introduction of Universal Credit from October 2013.

The projects will also look at the appropriate level of safeguards needed to help secure landlord income streams if tenants fall behind on their rent.

The local authority and housing association partnerships named for the demonstration projects are:

• Southwark Council and Family Mosaic, London
• Oxford City Council and Oxford Citizens and the Green square Group, Southern England
• Shropshire Unitary County Council and Bromford Group, Sanctuary Housing and The Wrekin Housing Society, West Midlands
• Wakefield Metropolitan Borough Council and Wakefield and District Housing, Northern England
• Torfaen Borough County Council and Bron Afon Community Housing and Charter Housing, Wales

Each will be involved in testing out different elements of the project, including testing different trigger points when social landlords should receive direct payments if tenants fall into specified levels of arrears.

The projects will also inform how best to communicate the changes to claimants, provide assistance with budgeting to successfully pay their rent, and support claimants and landlords experiencing financial difficulties.

Minister for Welfare Reform Lord Freud said: “Direct monthly benefits payments are a key part of Universal Credit, allowing claimants to prepare for the financial responsibilities they will face when in work and to encourage them to move away from often costly weekly and fortnightly budgeting.

“However, we know that some families will need support to adapt to managing their finances in this way.  The demonstration projects will help us to understand the demand for budgeting support and the best ways to deliver it.”

Vivian Davies, Head of Collections and Credit Control at Family Mosaic, said: “Family Mosaic is very excited and eager to be involved. It will not only give us the opportunity to shape how Universal Credit process will work in practice but will also help us to assess the provision of advice and assistance needed for our tenants to manage their finances.”

Councillor Richard Livingstone, cabinet member for finance and resources, said: "Working with the DWP from the outset as the Universal Credit is developed will help us to understand the impact of these changes on the community and our Housing Revenue Account. We hope it will also enable us to influence future decisions as government develops the policy."

Councillor Ian Wingfield, cabinet member for housing, said: "It's important that as changes begin to happen, we ensure our tenants are well supported and informed. As well as getting involved at the development stage of policy to set out, and look at ways to respond to, Southwark's unique challenges with the changes, the council is proactively working with tenants to train tenant representatives in money advice. This means they can signpost their neighbours to the relevant agencies for support, basic benefits and money management skills."

Alongside this measure, Ministers are working with the banking sector, credit unions, supermarket financial services and the Post Office to explore opportunities to develop cost-effective budgeting accounts for claimants moving onto direct payments.

The Government has also commissioned a review of the projects led by Professor Paul Hickman from the Centre for Regional Economic and Social Research at Sheffield Hallam University. The review will evaluate the impact of direct payments on claimants and vulnerable groups, as well as local authorities and social rented sector landlords.

While the majority of Universal Credit claimants renting in the social sector will be responsible for making their own rent payments to landlords, vulnerable claimants and pensioners will continue to have their housing costs paid direct to their landlord.