Minister defends welfare reform agenda

The welfare reform minister, addressing delegates at a packed session at the Chartered Institute of Housing conference in Manchester this morning, said: ‘Clearly there is broad support among the housing sector for these reforms, I’ve heard that consistently.

‘The reason is the sector understands the changes of behaviour and attitudes that will affect people’s lives that universal credit is designed to engineer.’

Universal credit will replace a host of benefits, including housing benefit, with a single payment paid direct to tenants. It will be phased in nationally from October 2013. The reform aims to simplify benefits, allow people to manage their own money and more easily gauge whether they are better off in work.

Lord Freud said direct payment of benefit to tenants, which has led to fears that social landlords’ arrears will rise, is essential to the aim of universal credit.

He said: ‘Giving them a single payment allows them to budget whether they are in work or out of work, in the same way, not paying your own rent creates a genuine barrier which stops people going out to work.’

However Julia Unwin, chief executive of the Joseph Rowntree Foundation, questioned Lord Freud’s claim that the sector is backing the reforms and warned him against confusing ‘pragmatism with consensus.’

She said: ‘I have huge respect for the way in which people on very low incomes budget, they budget to the penny and we are asking them to do that in even more difficult circumstances.

‘There are strong arguments for it but the pragmatic response we are coming up with is not saying we think this is the best way either for tenants or for the businesses we run.’

Ms Unwin said there are also concerns about the lack of jobs in some parts of the country and about whether the IT system which will deliver the universal credit will work.

Tim Power, landlord services manager at Oxford Council, which with landlord Greensquare is operating one of six pilot projects to test direct payment, said half of the 1,000 tenants it has assessed so far are ready for direct payment with no support needed.

Lord Freud also defended the controversial underoccupation penalty for social housing tenants, which will see tenants with spare rooms have their benefit cut. Lord Freud said the policy will mean social tenants face the same choices around whether to pay for extra rooms as private renters.

The CIH today published a guide for landlords on how to prepare for the bedroom tax.