In the coming months, council and housing association tenants are facing a ‘perfect storm’ – a series of substantial, high impact changes to their external environment, arriving all at once. Councils and housing associations need to work together to support those who need help – but they need the government to play its part, writes Mark Rogers, Chief Executive of Circle Housing Group.
The changes that tenants face include lack of affordable housing, higher energy and food prices, direct payments of benefits into their bank accounts rather than to their landlord, cuts and freezes to benefits and an overall benefits cap. All of this is against a backdrop of economic stagnation and low employment prospects.Early evidence suggests that this is likely to result in difficulties, as people who are already struggling may resort to payday lenders and illegal high interest loan services, to make ends meet. Many could face heart breaking daily decisions between eating, or heating their homes.
Councils and housing associations now have a game-changing opportunity to work together, with other agencies, to ensure that we deliver the right type of support, where it is needed the most. However, it is absolutely crucial that the government underpins their changes to the welfare system by providing information and face-to-face advice available to those who are affected. Online solutions alone are not enough.
At Circle, we recently surveyed our tenants to ask them questions about their situation and their attitudes towards banking and money. Even though welfare reforms are yet to start, 30 per cent of our tenants already say that they find themselves lying awake at night thinking about money issues. Quite often we find that those most likely to want to receive money advice are often those who are least in need of guidance. Or to put it another way, if your money situation is comfortable, you are more likely to be willing to talk about it, but, if you are in serious trouble, you might not want to discuss it. So, we need to look at new ways to engage those most in need of support.
At the moment most social housing tenants pay their housing benefit directly to their landlord. As part of Universal Credit – which brings together many benefits under one payment – the Department of Work and Pensions (DWP) is planning to introduce ‘direct payments.’ This means that most recipients will receive all of their benefits in one monthly lump sum to their accounts for the first time ever, rather than their rent being paid direct to their landlord.
Most of our tenants will not be used to receiving this amount of money at once, and may have difficulties in the transition to the new system. Some will want support to help them understand the changes and manage their money. The DWP is keen for these direct payments to be made online and for advice to be internet-based. However, our research shows that 45 per cent of our customers don’t have internet access at home, so can’t access online advice. So, for many online solutions will not work and face-to-face advice is the most effective way to guide people through the changes.
If housing associations receive less rental income as a result of benefit changes, this will directly impact on our ability to invest in our local communities and the services we are able to provide. At Circle, we have already invested heavily in our inclusion services and provided more money matters advisors on the ground to help our customers through the transition. We are now calling on the government to support councils and housing associations by providing a guarantee of at least one face-to-face money advice session for each new recipient of direct Universal Credit payments who needs it. In this way, we can prepare people for the ‘perfect storm’, give them the information and guidance they need, and help them to navigate towards proactive management of their resources.
This article first appeared in c’llr magazine February 2013.