Universal Credit (Payment of Housing Element)

– in the Scottish Parliament on 26th June 2019.

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Photo of Jackie Baillie Jackie Baillie Labour

3. To ask the Scottish Government what its response is to the Social Security Committee’s recommendation that the housing element of universal credit should be paid directly to a landlord by default, with the option for a tenant to opt out. (S5O-03441)

Photo of Shirley-Anne Somerville Shirley-Anne Somerville Scottish National Party

As part of the development of the universal credit Scottish choices in 2017, we worked directly with people in receipt of universal credit. The feedback from that was that people wished to have a choice about whether or not to have the housing costs in their universal credit award paid directly to their landlord. The evidence so far shows that almost 50 per cent of the people who have been offered the choices have taken up one or both. In other words, they have decided for themselves whether it works better for them to have their housing costs paid directly to their landlord.

Photo of Jackie Baillie Jackie Baillie Labour

The cabinet secretary will be aware that the Scottish Association of Landlords welcomed the report last week and, in particular, backed the move to pay the housing element directly to landlords as the default. The cabinet secretary knows that that can reduce the risk for landlords and can secure tenancies by preventing arrears, and that it was backed overwhelmingly by those who gave evidence to the Social Security Committee and by the committee itself. Will the cabinet secretary support that recommendation and commit to allowing the money to go straight to landlords to ensure that Scotland’s powers are used to the maximum effect to support and protect tenants?

Photo of Shirley-Anne Somerville Shirley-Anne Somerville Scottish National Party

I appreciate where Jackie Baillie is coming from on the issue. However, as I said in my original answer, when we asked people who are directly in receipt of universal credit what they wanted to happen, they asked to have the choice. It is important that, as we build a system that works for the people who receive a service, their asks and requests are taken on board. I fully appreciate that the Scottish Association of Landlords and others, including the Social Security Committee, have asked us to look at paying the money directly to landlords.

As I said to the committee when the Scottish Government’s response was being produced, it is important that we listen to the requests of individuals—not just those of landlords—and try to balance such judgments. We took that decision to ensure that the choice lies with the individual initially. A review of UC choices is coming up at the end of this year, which it might be useful to look at. However, when we initially developed the project, the direct response was that people wanted to make that choice themselves.

Photo of Shona Robison Shona Robison Scottish National Party

T he report also showed that the five-week delay in claimants’ receiving their first payments of universal credit has greatly increased rent arrears. Ineffective communication and poor exchange of information on the part of the Department for Work and Pensions has inevitably had a human cost. Does the cabinet secretary think that that is yet further evidence of the mishandling of universal credit under the Tory United Kingdom Government? Does she agree that it is unsustainable for the Scottish Government to continue to mitigate that Government’s welfare cuts, which will reduce social security spending ability in Scotland by £3.7 billion?

Photo of Shirley-Anne Somerville Shirley-Anne Somerville Scottish National Party

Shona Robison is right to highlight again the impact of the delays—which I may say are of a minimum of five weeks—in UC claimants receiving their first payments. As she also pointed out, that greatly increases rent arrears and has a severe impact on people, in terms of not only the lack of money but the stress that they go through at a very difficult time. Research conducted by the Convention of Scottish Local Authorities suggests that, between March 2016 and March 2018, rent arrears increased by an average of 26 per cent across all UC full-service local authority areas, which is highly concerning—not just for the individuals who are involved but for the landlords, too.

The Scottish Government is doing all that we can to mitigate the worst excesses of the UK Government’s policies—for example, in 2019-20 we will spend more than £125 million in doing so. However, as Shona Robison rightly pointed out, the scale of the challenge—some £3.7 billion—is such that it would be simply unsustainable for any Government to be able to mitigate it fully.