Universal Credit Roll-Out faces major delays
The current Local Housing Allowance (LHA) benefit system is likely to continue until at least 2017 for the majority of private rental sector (PRS) landlords and tenants in most of the UK, following major delays to the roll-out of the new Universal Credit system.
Universal Credit was originally due to be rolled out nationally to all new tenants claiming benefits from October this year, however due to continued problems, the controversial welfare reform measure will just be extended to an additional six jobcentres.
The delay is being blamed on poor IT by Government ministers, leading to claims that Universal Credit is just another Government white elephant.
Universal Credit was heralded by its proponents as an easier way to deliver state benefits including housing benefit or LHA and tax credits into one lump sum paid monthly to claimants, but its proposal saw an immediate backlash from PRS landlords, letting agents and landlord associations over the abolition of direct rent payments to landlords.
The original idea behind Universal Credit was that benefit claimants got all the money in one monthly payment and empowering them with the responsibility to manage their own finances, including passing the monthly rent on to landlords.
The Government state that the IT system intended to manage the entire Universal Credit system does work, but is lacking some technical advances and that a better system could potentially be built.
It has also been revealed that up to 6,000 new computers would have to be installed in jobcentres, so that claimants can access online services locally.
Iain Duncan Smith, secretary of the Department for Works and Pensions (DWP), said: “I am pleased to say that while we press ahead with Universal Credit delivery, we are also ensuring that we have the best long-term approach in place for this transformative benefit. I’m determined to get this right and will not follow the old ways of governing, launching with a big bang and having to clear up the mess afterwards.”
However, Mr Duncan Smith’s shadow opponent, MP Liam Byrne, said that Universal Credit had become the biggest white elephant in Whitehall, stating: “David Cameron and Iain Duncan Smith have spent £420 Million (GBP) of taxpayers’ money to deliver Universal Credit in the grand total of just ten jobcentres, that’s less than 1.5% of the nation’s jobcentres.”
The new Universal Credit system is already being trialled in two pilot areas in the UK, including Ashton-Under-Line in the North West, where there has already been a marked increase in tenant rent arrears due to its introduction, as tenants struggle to get to grips controlling their finances and landlords are last on the priority list for payment.
Further trials are set to start later this month with the scheme being rolled out in Hammersmith, Rugby, Harrogate, Inverness, and parts of North Wales.
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