Universal Credit is Not Ready Yet
- 03 Apr
Universal Credit has been criticised by MPs as the system to prevent fraud is not ready.
They also raised concerns that there is not yet a clear definition of the 'vulnerable' tenants who will be exempt from direct payments.
A report from the Communities and Local Government select committee has requested urgent confirmation that the switch to universal credit will not leave the system open to fraud.
The MPs have criticised the government as the system for prevent fraud is still at an early stage, and not ready to be in place, despite already making some of the welfare reforms this month.
They have asked the Department for Work and Pensions ensure the new system will be leaving universal credit open to benefit fraud.
Chairman of the committee, Labour MP Clive Betts, said:
We heard evidence that ICT systems for fraud detection within Universal Credit were still at an early stage in their development. This is extremely concerning given the advanced state of implementation.
The government must act to provide assurance that the benefit system will not be left vulnerable to fraud either during or after the transition. And it must do so urgently.
The committee also raised concerns that the details for direct payments, which is a big part of the universal credit proposals where payments are paid directly to the tenant, do not outline who will be classed as 'vulnerable', and therefore exempt from direct payments. They have said a clear definition needs to be provided.
The government should also look at how the bedroom tax, which came in to force this week, will impact divorced parents and those with disabilities. They said that the benefit cut will already add pressure on family budgets, which will impact local authority and housing association collection rates, and this needs to be considered.
The committee have called for the government departments to have a more joined-up thinking as they need to ensure the changes are as trouble free as possible.
Mr Betts said:
The government has promised a great deal. It has provided assurances that the reforms will not undermine the financial viability of housing associations.
It has promised guidelines for local authorities on how 'vulnerable' tenants - who will have their rent paid to their landlord - will be identified.
It has promised an arrears trigger that will switch payments back to landlords when arrears reach a given level.
It has promised to take into account the results of the Direct Payment pilots, which show increased levels of rent arrears, before the rollout of direct payments nationwide.
These promises are welcome but must be speedily fulfilled.
Gavin Smart, director of policy and practice at the Chartered Institute of Housing, said:
Universal credit is a massive change for housing providers and tenants alike and it's essential that housing providers have a clear, stable timetable to allow them to put effective new systems into place.
There is still far too much uncertainty - the DWP announced last week that some of the universal credit pilots are to be delayed and it's extremely worrying that such changes are still taking place at this late stage.
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