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Arrears ‘too high’ on demonstration projects

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Arrears ‘too high’ on demonstration projects

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

Chartered Institute of Housing gets Smart to join leadership team Chartered Institute of Housing gets Smart to join leadership team

The arrears percentage on the Government’s direct payment demonstration projects is "too high" and would be hard for landlords to support in the longer term, the Chartered Institute of Housing (CIH) has warned.

The institute was responding to Government figures, published today, revealing that 8% of the rent on average had been uncollected on the projects, which are roadtesting the direct payment of housing benefit to social tenants ahead of Universal Credit.

It published figures for the first four months of the projects, which kicked off in June, showing that 92% of the of £7,692,844 owed in rent had been collected and that 316 of the 6,200 tenants participating in the project had been switched back to payments to their landlords.

Gavin Smart (pictured), director of policy and practice at the CIH, said: “We are pleased that some findings from these demonstration projects have finally been released. CIH has been calling for more transparency from the DWP for some time on this issue so it is good to see they have taken note.  It is crucial that landlords are given as much information as possible from the pilots to help them plan ahead, put effective processes in place and mitigate any risks arising from the new system.

“The arrears percentage in this report is too high and would be hard for landlords to support in the longer term, but the pilot projects are still in their early stages and we hope collection levels will increase once the new systems and approaches begin to bed in.

“Direct payment is a massive cultural shift and will take time for both tenants and landlords to get used to.  These findings demonstrate the importance of good communication between landlords and their tenants in keeping rent arrears down.

“The six areas are trialling different rent collection processes and switchback mechanisms and as the pilots continue we hope more information will be released about how each system has worked.  CIH will work with landlords to determine the most effective systems and practices and support them in putting those into place.”

The projects are investigating a range of elements of direct payments to provide protection for landlords and tenants.

The Minister for Welfare Reform Lord Freud said: "Direct payments of benefits will help people to step into the workplace without the many institutional barriers that now exist.

“However, we have always been clear that exemptions must be in place alongside the right support for those who need it and the Demonstration Projects are showing us and the housing community the steps that must be taken."

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