Lord Freud exclusive: 'We are listening to social landlords on Universal Credit'

Minister for Welfare Reform Lord Freud says the Universal Credit demonstration projects have helped to shape new thinking around direct payments to tenants.

The demonstration projects were set up to learn how we could best support landlords and tenants with the introduction of direct payment. That learning is regularly shared and I’m sure all members of the social housing community have views on what it is teaching us. Because the roll out of Universal Credit is progressive we have time to get this right.

For me, the Projects highlight how crucial the tenant/landlord relationship is.

We were expecting to learn from the demonstration projects how best to make direct payments work for both tenant and landlords and that is happening.

Indeed, that was the original purpose of us testing the different safeguards and levels of support and it’s been such a worthwhile exercise we have extended it for a further six months.

However we are also seeing something else from the demonstration projects which is essential to know about if we are to help claimants turn their lives around.

Put simply there are some tenants who have very complex needs requiring extra support that we were not aware of until the demonstration projects highlighted them.

Tenants have come to light with multiple issues that landlords simply didn’t know about before the demonstration project changed the landlord/tenant relationship, people who had slipped through the net of local social service provisions and who needed help for themselves and their families.

Everyone agrees that social landlords aren’t just landlords to their tenants. Their responsibilities to the families living in their accommodation extend further than that.

That’s why social landlords are so proud of the work they do. Most of their tenants will manage their lives well and need no further help. These projects have thrown up that a minority of tenants do need more support – from DWP, their landlords and local authorities and other organisations on the ground working together.

Learning how we identify these people, how we intervene and what help we give is key.

We are looking at a wide range of support for tenants under Universal Credit.

We have already published the Universal Credit local support services framework and guidance on alternative payment options for claimants.

We are now working on and getting agreement on what the ‘trigger point’ should be to switch to managed payments to the landlord and how we continue to help landlords protect their financial position as we move more people over to Universal Credit.

But I want to be very clear this switch should be a failsafe mechanism. We want earlier intervention for the minority of tenants who cannot handle direct payments – there is no point unnecessarily placing people in risk of arrears if we can act earlier.

While I know that there are still concerns among landlords over direct monthly payments, those working on the demonstration projects who I spoke to acknowledged the benefits of direct payments in helping people take responsibility for their lives and move into work and were generally positive that it can be made to work. We are continuing to learn what we can do to support that process.

The majority of people in the demonstration projects are making their rent payments, even through the Christmas period, and that is reassuring to those involved in the projects.

Where people need help managing a direct payment we will provide that and we will ensure that the financial position of landlords is protected.

The demonstration projects show my commitment to making this happen.

However they also show how important the relationship between landlord and tenant is.

The changed relationship that direct payment brings will help landlords understand more about their tenants and allow them to identify those who need to access more help and support for their particular circumstances.

Working in partnership and building on what we learn from the demonstration projects will help us get the best from this new relationship. I believe it is a positive step forward.