Written evidence from The Riverside Group Ltd [UCW0063]
1.1 The Riverside Group Ltd (known as Riverside) is one of the largest charitable housing association groups in the country, owning and managing over 53,000 homes across England and Scotland. With a substantial national profile and over 90 years of experience of developing affordable housing, we work in some of the country’s most challenging neighbourhoods. In addition to general needs accommodation, our large supported housing and retirement living division - Riverside Care and Support - provides high quality support to more than 12,000 service users with a diverse range of housing needs.
1.2 Currently, just over 9,000 Riverside tenants are in receipt of Universal Credit, we anticipate that this is around half of the total eligible tenants who will eventually migrate. On average, just over 300 Riverside tenants make a new Universal Credit claim every month, although in recent weeks we have seen a substantial acceleration in this.
1.3 Riverside welcomes the opportunity to respond to this call for evidence. Our response will focus on to what extent the mitigations already introduced by Government have helped to reduce the impact of the five week wait and how these can go further and help more people.
1.4 We will use evidence from a survey carried out by BMG Research on behalf of Riverside in 2019[1]. The survey was used to assess the impact of Universal Credit on Riverside tenants in receipt of the benefit. In total, 368 Riverside tenants responded to the survey. This is representative of Riverside tenants nationwide and is accurate to a +/- 4.9% confidence interval. Further evidence from Riverside arrears data will also be used.
1.5 In summary, we recognise that mitigations put in place by the government have gone some way to rectifying the problems associated with the five week wait. However, these do not go far enough. The rapid availability of advance payments is welcome, however the requirement for claimants to repay over 12 months is leaving people in greater financial hardship and any policies to increase the length of time allowed to repay advances should be put in place as soon as possible.
2.1 Our data on arrears highlights the impact that the five week wait is having on Universal Credit claimants. For existing Riverside customers moving onto Universal Credit, their rent arrears increase by £150 on average over the first three months of their claim. It can take over a year before their arrears reach the same point they were at before making their Universal Credit claim.
2.2 We recognise the attempts by Government to mitigate the impacts of the five week wait, in particular through advance payments. However, evidence from our Universal Credit survey shows that two thirds of customers who were surveyed and had received an advance payment were pushed into increased financial hardship through the repayment process. Comments from respondents on repayment of the advance included:
“You have no choice but to take the advance as it was nearly five weeks until I was due to receive payment. They will only allow that to be paid over a maximum of one year, which means they take an awful lot out of your universal credit to repay each month”
“I knew and accepted paying it back but it only pushes you into hardship over a longer period. I do regret having advance payment but I had no other option”
2.3 In our experience, there are some cases where Universal Credit claimants get an advance payment but do not use this to pay their rent (either because they have other priorities or because they do not realise the advance payment includes the housing element). This means that these customers are still facing the increased rent arrears they have built up over the five week wait as well the requirement to pay back their advance.
2.4 The recent announcement from Government in the 2020 Spring Budget, that the repayment period for advances will be extended from 12 months to 24 months, is welcomed. In our opinion this will help to mitigate the impacts of the five week wait and alleviate the pressure on claimants to repay their advance within 12 months whilst at the same time facing other debts they have accrued (for example, rent arrears). However, since this measure is not set to come into place until October 2021, new claimants over the next year will still be required to pay their advance back over 12 months and thus still risk financial hardship.
2.5 We also recognise the measures that Government has put in place during the coronavirus pandemic, increasing the standard Universal Credit allowance for one year until April 2021. This will mitigate the impact of the five week wait for many new Universal Credit customers over the next year, providing greater resources to repay any advance payment they have received.
2.6 Whilst these welcome measures will go some way to mitigating the impacts of the five week wait for many customers, it is clear that for those customers who make a new Universal Credit claim between April 2021 (after the end of the coronavirus measures) and before October 2021 (before the introduction of the extended repayment period) the impacts of the five week wait are likely to continue to push them into increased financial debt.
3.1 We recommend that in order to support all new Universal Credit claimants from this point, the extension of the repayment period (for advances) to 24 months should be put in place from April 2021, as soon as the measures put in place during the coronavirus pandemic come to an end.
3.2 In order to support those claimants who are facing increased debts in other areas (for example, rent arrears) we also recommend that the repayment of advances does not begin until the Universal Credit claim has been in place for at least three months. This will give claimants the opportunity to repay their other priority debts first, rather than having to repay them alongside repayment of their advance.
[1] A similar survey is likely to be commissioned later in 2020