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Whither Universal Credit? Matthew Warburton - 18/08/2014

UC300ARCH has been tracking the impact of the underoccupation penalty on tenants and landlords through a joint survey with CWAG and the NFA; councils and ALMOs have recently been asked to provide data for the last quarter of 2013/14. 

The experience of a full year of implementation of this element of welfare reform provides a firmer basis for landlords to assess the likely medium-term impact of the penalty on tenants' ability to pay their rent, and thus on councils' income streams.  However, it is not the underoccupation penalty or the benefit cap that poses the greatest long-term risk to rent income but the plan to pay Universal Credit direct to claimants on a monthly basis, ending the system of rent rebates on which councils have been able to rely for many decades. 

Yet when and how Universal Credit will be rolled out to all claimants remains extremely unclear.

To date, UC has been piloted with new single applicants with uncomplicated circumstances in just 34 JobCentres, 10 of these began also taking on couples from the end of July.  The total number of cases involved is around 12,000, a fraction of the number originally intended to be receiving UC by now.  Yet the Government continues to maintain that UC remains on target for complete implementation by 2017. 

In a recent speech, the Secretary of State for Work and Pensions, Ian Duncan-Smith, insisted that implementation was proceeding according to the timetable set out in December 2013. 


However, this timetable is extremely light on detail.  The 10 pathfinder areas currently beginning to accept claims from couples are expected to add new claims from families in the autumn.  Then "once those extensions have been tested, Universal Credit is expected to become available across more areas in the North West of England." No indication is given as when exactly this might happen. 


"During 2016" the December 2013 statement continues, "current assumptions are that Universal Credit will be widely available across Great Britain and during 2016 and 2017, the majority of all legacy cases will be moved over to the new scheme."


However, detailed plans are not currently available and DWP and HMRC continue work on their schedules to widen the delivery of Universal Credit up to the end of 2017.  Meanwhile, there are continuing problems with the IT systems needed to operate the new arrangements, and expert opinion is almost unanimous that there is no realistic prospect of the IT working nationally for all claimants by 2017.


Labour is sympathetic to the principles underlying UC, but is committed to a review of its feasibility and implementation if elected to government next year.  Taking all these uncertainties together, it is virtually impossible for councils to know for more than a few months ahead how UC implementation will affect them and their tenants.  Its potential impact remains enormous, but exactly when and how they and their tenants will be affected remains impossible to quantify.

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