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Social landlords need to push harder for a fairer and more generous welfare system
The vital role of the effective and compassionate state over the past few months should be sharp rejoinder to politicians who would prefer us all left to our own devices. We must have a fairer welfare system moving forwards, writes Sir David Bell
No one found 2020 easy. Even when it looked as if there might be some respite at Christmas, hopes were cruelly dashed as a large section of the population went back into lockdown.
For all, life has been difficult. Those who had the toughest time were – as usual – people on the lowest wages or on benefits. In that respect, the pandemic has been no different to the circumstances many endured in the aftermath of the 2008 financial crash and through the ‘austerity’ policies in place post-2010.
This time round, the government has intervened in several ways to ameliorate the impact of the successive local and national lockdowns, most notably through the furlough scheme and support to business owners.
In April 2020, the weekly rate for Universal Credit was increased by £20 – and that uplift was to last for a full calendar year. For those in the greatest need, this measure provided a lifeline, although, as the huge demand on foodbanks has demonstrated, it is barely enough to get by.
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Work has never been more precarious, and zero-hour contracts have meant that incomes have disappeared overnight for many. For others, the pandemic has forced them to navigate the complexities of the welfare system for the first time.
That has led to a wider recognition that being supported through Universal Credit is not a handout but a ‘help out’, and is the absolute minimum that a civilised and decent society should be doing for its most vulnerable citizens.
If last year demonstrated anything, it is that none of us can be absolutely certain about the future. That should reinforce the necessity of having a well-funded national ‘safety net’ there for all of us when we fall upon hard times.
Yes, a well-regulated capitalist system in which private enterprise moves quickly and stimulates innovation is a central component of a free and democratic society. But the vital role of the effective and compassionate state over the past few months should also be a sharp rejoinder to those politicians who would prefer us all left to our own devices.
So even when our world has gone back to operating more ‘normally’, the £20 Universal Credit uplift should remain in place – it should also apply to legacy benefits such as Employment Support Allowance, Jobseeker’s Allowance and Income Support, as the Joseph Rowntree Foundation has been eloquently arguing.
This is principally about doing what is right and fair, as society resets its obligations to the most needy – a much wider group of people post-pandemic. But this is also a politically sensible approach, as what works for individuals and local communities will also have a positive impact on the wider economy.
It will help to remove the ‘heat or eat’ dilemma that faces the country’s poorest households each winter. But, crucially, it means more money being spent in local shops and with local services or helping to relieve the burden of debt.
Any housing officer will tell you that giving their residents on Universal Credit a boost in income will also contribute to more secure tenancies, which has the knock-on advantage of providing stability for children in school.
“We also need to abandon the five-week wait for a claimant to receive their first payment. We know it leads to significant rent arrears which can take up to three years to clear, as well as other debts”
In housing associations, we can see at first-hand the impact that Universal Credit has on our customers’ lives. Karbon Homes’ Money Matters team works closely with customers to help maximise their incomes, manage their debts and to understand the pressures they are facing.
Our approach is based on solid research with our customers who are on Universal Credit. Our work found that more than half of those surveyed demonstrated one of the Joseph Rowntree Foundation’s indicators of destitution, with many of those having had fewer than two meals a day.
In practical terms, pressure could be relieved by enabling claimants to have the housing element of Universal Credit paid directly to their landlord from the beginning of their claim.
Some may prefer to manage their own budget and finances. Others, who struggle to budget, may prefer the housing element to go straight to their landlord to avoid accumulating rent arrears. Claimants should be given the choice.
We also need to abandon the five-week wait for a claimant to receive their first payment. We know it leads to significant rent arrears which can take up to three years to clear, as well as other debts.
So, here are two aspirations for 2021. First, Universal Credit should be upgraded permanently. Second, what about us all making a collective commitment to push hard for a fairer and more generous welfare system? As 2020 has demonstrated, it is as much about what we value as a country as it is about what we can afford.
Sir David Bell, chair, Karbon Homes
