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Direct Payment projects: Rent worth more than £500,000 not collected

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Direct Payment projects: Rent worth more than £500,000 not collected


Published by Anonymous for in Housing and also in Bill Payments, Universal Credit

Direct Payment projects: more than £500,000 of rent not collected Direct Payment projects: more than £500,000 of rent not collected

More than half a million pounds worth of rent was not collected by housing associations and local authorities during the first four months of the Government's Direct Payment Demonstration Projects, according to figures released today.

The research, published by the Department for Work and Pensions, shows rent collection rates in the six project areas stood at 92% - representing a total value of £7,692,844 from a sample of 6,220 social tenants. It means that the total unpaid rent for the period stood at £615,478.

Across the different areas, levels of payments by tenants on the projects varied from 88% to 97% – demonstrating the different conditions and approaches being tested in each area.

In addition, a total of 316 tenants have been 'switched back' to payments to their landlords – either because they have reached the eight-week arrears 'trigger' for switch back or due to early invention.

The direct payment of housing benefit to social tenants is being tested by the Government ahead of the introduction of Universal Credit in October 2013.

The Minister for Welfare Reform Lord Freud (pictured) 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."

The six direct payment demonstration projects are:

  • Dunedin Canmore Housing Association in Edinburgh, working in association with The City of Edinburgh Council
  • Oxford City Council and Oxford Citizens, (part of the) Greensquare Group, Southern England
  • Shropshire Unitary County Council and Bromford Group, Sanctuary Housing and The Wrekin Housing Trust, West Midlands
  • Southwark Council and Family Mosaic, London
  • Torfaen County Borough Council and Bron Afon Community Housing and Charter Housing, Wales
  • Wakefield Metropolitan District Council and Wakefield and District Housing, Northern England

Commenting on the first four months of the Demonstration Project involving GreenSquare Housing Group and Oxford City Council, Councillor Val Smith, the council's Portfolio Holder for Customer Service, said: "The council got involved in the Direct Payments projects as a result of concern  we had for the impact of the direct payment provisions in Universal Credit. As a local authority landlord we were concerned that some of our tenants may get into rent arrears as a result of not being able to manage payment of the rent themselves. By being involved in the project we have been able to firstly introduce a significant number of our tenants into direct payment, in a controlled environment.

"We are also learning what the best way is to help those who need some support in managing direct payment. At the same time we are able to influence the final delivery model of Universal Credit.

"It has been pleasing to see that majority of our tenants have been able to manage direct payment of their Housing Benefit. Encouragingly the trend for each phase of people who move into the project is for arrears to steadily reduce after the initial payment. This suggests that our tenants are able to adapt to the new process quite quickly."

Click here to read the latest findings in full.


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