Written evidence from the Scottish Federation of Housing Associations

1. Who we are

1.1.  The SFHA leads, represents and supports Scotland's housing associations and co-operatives. We want to see a thriving housing association and co-operative sector providing sustainable and affordable homes.

2. Executive summary

2.1.  The SFHA’s concerns over the efficacy and implementation of a sanctions regime have been well highlighted by other organisations and their reports, in particular the recent report by the National Audit Office[1], the various reports undertaken by Dr David Webster on behalf of the Child Poverty Action Group[2] and the recent research by Oxford University funded by the Trussell Trust and supported by a Wellcome Trust Investigator Award[3].

2.2.  The particular concern of the SFHA is the effect of sanctions on tenant sustainability. Evidence to previous inquiries and calls for evidence have pointed to the danger to tenancies and the income streams of housing associations, which underwrite the delivery of a high quality housing service to all tenants. In particular there was concern that:

• More vulnerable tenants were disproportionately subject to sanctions;
• That a sanctioned tenant’s housing situation was worsened if, as was often the case, their Housing Benefit was suspended in error, even though the claimant has a legal entitlement to Housing Benefit despite the error. Although the error can be rectified, the consequence of the delayed payment is an additional administrative burden to both the housing association and the benefit agency and causes the tenant undue anxiety;
• That the difficulties encountered with data sharing in Universal Credit and in particular with the full service rollout with the denial of implicit consent (that had been permitted with all other benefit enquiries) does not offer any assurance that the situation will improve.

3. Main Report

3.1.  In February 2015 the SFHA submitted evidence to the Scottish Parliament Welfare Reform Committee on foodbank use. The Committee’s request for evidence had come following the request by the then Under Secretary of State for Scotland, the Rt. Hon David Mundell MP, to give specific examples of cases where issues such as sanctions, benefit delays or maladministration contributed to an individual resorting to foodbank use. The evidence was based on returns from a range of housing associations operating from the northernmost to the southernmost parts of Scotland and it told a similar story: the main reasons for foodbank referral was due to either benefit delays or sanctions:

3.2.  It should be noted that for every case an association might be aware of there are likely to be many more, as housing associations are not usually part of the referral system. In order to access a foodbank an applicant has to be referred by social services or some other recognised agency.

3.3.  The harm caused by benefit sanctions and delays can also be compounded if, as in the Oakley Review[4] of Benefit Sanctions, Housing Benefit is stopped in error. The financial difficulties and stress upon the individual are exacerbated and they face the risk of being evicted from their home. As Dr David Webster pointed out in his analysis of JSA and ESA Sanctions, “The DWP’s database only shows sanctions after any reviews, reconsiderations and appeals that have taken place by the time the data is published. But numbers of sanctions before the results of these challenges are important since they show all the cases in which claimants have had their money stopped. Although a successful challenge should result in a refund, this is only after weeks or months by which time serious damage is often done[5].”

3.4.  In evidence to the DWP independent review of Job Seekers Sanctions in 2014[6], the SFHA reported on a survey of its members. The findings of the survey were that:

• Members were having to invest in services to support tenants facing sanctions while at the same time having to contend with the possibility of diminished income as a consequence of increased rent arrears;
• That in a number of cases tenants who had not been in arrears before had fallen into arrears as a result of sanctions and their housing benefit being (incorrectly) stopped;
• That in case studies provided, there was a recurrent theme of claimants being sanctioned as a consequence of mental or physical health issues. Furthermore those with vulnerabilities or addiction problems were likely to be the subject of repeat and more draconian sanctions.

3.5.  Universal Credit (UC) is expected to exacerbate the problem as claimants are given the responsibility of paying their housing costs to the landlord: if sanctioned, the support they receive for housing costs is likely to be used for other necessities such as food, heat and light. The landlord can apply for an Alternative Payment Arrangement Managed Payment to Landlord (MPTL) if the tenant has arrears of two months’ rent (which on average will be well in excess of £700). Not all Universal Credit arrears will be as a direct result of sanctions, but in its monthly members’ survey of UC implementation, in October 79% of tenants on Universal credit were in arrears, with an average arrear of £805. If that level of arrear was replicated when UC is fully rolled to the 116,000 working age housing association and housing cooperative tenants currently on Housing Benefit, the overall arrears would be £73.8 million.

3.6.  The DWP has been conducting a “yellow card” pilot in Scotland whereby a sanction is still imposed, though the claimant is given advance warning of the sanction and thus an opportunity to offer good cause why it should not be imposed, though we still await the report of the pilot.

4. Conclusion

4.1.  Benefit sanctions have exacerbated the challenge of managing rent arrears and have undermined the efforts of those who have faced sanctions to sustain their tenancy. Against any savings the DWP may have achieved should be set the cost of tenancy failure, both to housing associations and to other services that have to respond to the consequences of a failed tenancy.

6 November 2016