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Welfare questions for Wales

In answer to The Big Question posed at the CIH Cymru conference in Cardiff, there were times when it felt less like being ‘at the cliff edge’ than being one of those cartoon characters who runs beyond the cliff and then looks down.

It was certainly hard to find much good news on offer at the session on welfare reform.








For Welsh housing of course, that means not just universal credit but the prospect of being hit harder by the extension of the local housing allowance (LHA) than anywhere else in the UK.

The day after MPs debated universal credit at Westminster delegates heard first hand about the impact in Flintshire, the first area in Wales to go full service back in April.

Jen Griffiths, benefits manager at Flintshire County Council, wrote about the early impacts and potential responses in the July issue of WHQ.

Clare Budden, chief officer community and enterprise, gave a picture six months in that was every bit as grim. To quote a brief selection of stats: £80,000 of arrears directly attributable to universal credit and council tax collection down £17,000; a 50% increase in the housing register in 12 months; 117 food bank vouchers issued; and a 400% increase in applications for discretionary housing payments.

Beyond the well-publicised issues about the phone line and the waiting period, she highlighted the plight of adversely affected households who lose their transitional protection (and more generous tax credits) when their circumstances change.

There are problems too with short-term accommodation, with universal credit unable to cope with people moving and leaving local authorities unable to claim back the costs of temporary accommodation.

Flintshire is taking a range of measures in response, including trying to implement a no-evictions policy. As Clare put it: ‘If people can’t afford to live in social rented property where can they afford to live.’

And she also appealed for more flexibility from Welsh Government on regeneration and revenue funding and on rents. ‘We need a total rent envelope that allows landlords to charge what people can afford to pay.’

Sam Lister from CIH highlighted the scale of the acceleration in the roll-out. There are just over 700 Job centre Plus areas in the UK and only 13% of them had seen full service universal credit by July but over the next 12 months the other 600 are set to follow on current plans.

However, he also highlighted some pluses in the new system: landlords should be able to identify winners as well as losers from it; and they can also apply to reduce rents for people affected by universal credit in a way that is impossible under housing benefit.

But then there was more gloom from Douglas Haig, director for Wales of the Residential Landlords Association, who quoted its survey evidence that just 13% of private landlords are willing to take tenants on universal credit.

If that is worrying enough, for the tenants they will not house and for local authorities relying on the private rented sector for their homelessness work, then the reluctance also seems to have spread to people who might be on universal credit in future: some 61% said they would not rent to someone on a zero hours contract.

On LHA, the conference heard from Mike Owen, chief executive of Merthyr Valleys Homes, about the impact of the planned extension to social housing from 2019.

Quite apart from the impacts on supported housing and the under-35s, the policy affects Wales in general more than anywhere else in the UK because of its low LHA rates and the Valleys and parts of north Wales in particular because many social rents are already higher than LHA.

As social landlords and Welsh Government continue to grapple with the effects and possible responses to it, Mike outlined the wider-ranging effects of a system that seems almost purpose-designed to affect areas like Merthyr.

There are no easy answers and Merthyr Valleys, its tenants and staff have looked at freezing rents at LHA in the short term at a cost of £260,000 a year.

However, Mike appealed for a fresh look at rents policy and warned of the dangers of a two-tier housing service in Wales, split between areas forced to freeze rents and cut back new build and others that will still have scope to increase their rents.

As we stand at the cliff edge, it’s just as well that there was plenty of positivity elsewhere at the conference, evidence of solutions that are working on the ground, potential alternatives to the current system, an update from communities secretary Carl Sargeant and the launch of New Housing Professional 2017.

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