This report was commissioned by the London Borough of Southwark. The aim of the report is to better understand the impact that Universal Credit (UC) has had on the rent payment behaviour of the borough’s own social housing or “council” tenants.
The report focuses on two main questions: first, whether there has been an improvement in rent payment behaviour since reforms to UC were introduced in 2018; and second, to see what the impact of UC has been long after tenants have transitioned onto the new benefit.
To answer these questions the report analyses and compares the experiences of two groups of tenants that transitioned onto UC at different times. The first group did so between August to October 2016 and the second between April and June 2018.
By examining the rent payments for the second group the report captures a group that should have benefited from a number of significant changes to UC policy announced in the 2017 Budget and that were fully implemented from April 2018 – for example the abolition of the seven-day waiting period and the introduction of a two-week Housing Benefit (HB) run-on.
This report is the third the Smith Institute has produced for Southwark Council tracking the impact of UC on rent payments but the first to look at UC post reform. The first report, ‘Safe as Houses: the impact of Universal Credit on tenants and their rent payment behaviour in the London boroughs of Southwark and Croydon, and Peabody’ was published in October 2017.1 It involved other social landlords whose tenants were affected by the early experience of UC full service rollout and examined the impact of UC roll-out on rent payments among those claiming the new benefit compared with those on HB. The second report, ‘Safe as Houses 2: A follow-on report into the impact of Universal Credit on Southwark Council’s housing tenants rent payment behaviour’ was published in November 2018.2 Unlike the first report it examined only tenants in Southwark’s housing stock. The focus was on the longer-term picture and comparing the two different cohorts transitioning to UC a year apart to see if the system was improving with time.
Like the 2018 report the analysis in this report is focused on tenant’s rent accounts. As such, it does not include the human cost which was highlighted in the first Safe as Houses report. Nor does the report provide details about other costs that the council has to bear, be it the impact on its Housing Revenue Account, development or housing improvement plans or the additional workload on officers supporting tenants. Nor does it include the additional burden facing tenants, including the emotional stress or knock on financial implications such as personal debt.
What the data does demonstrate through the rent accounts analysis is the experience of those who are known to have made an effective claim for UC either in 2016 or 2018. The Council has no way of knowing whether any of those who claimed UC continued to do so, or for what period. What the Council does know is that all those whose rent accounts were analysed for purposes of the research had “migrated” to UC and the new arrangements for meeting housing costs. These tenants were of working age and reliant on the benefit system to help pay their rent.
This latest study draws on previous findings, including using the results from the first report on the rent payments of tenants that moved onto the legacy HB system to act as a baseline for some comparisons. The report also seeks to understand whether rent payments improve with time and arrears are paid down. It also compares the two groups to examine whether reforms at a national level or within the council have led to improved outcomes, and, if so, in what way. Such insights presented without prejudice are intended to help improve what remains a relatively new and untested system.