Press release

Direct Payment projects extended for 6 months

The Universal Credit direct payment demonstration projects will be extended for a further 6 months.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

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The Universal Credit direct payment demonstration projects will be extended for a further 6 months, Minister for Welfare Reform Lord Freud announced today, as new findings from the projects are published.

The extension will help to further develop the support needed for social housing tenants moving onto Universal Credit. The projects will now run until the end of the year.

The latest findings from the projects show a rise in the rent collection rate to an average of 94%.

Lord Freud said:

Direct payments will allow claimants to manage their money far more effectively and create a much smoother transition into work.

The Demonstration Projects show the majority of claimants are managing their own rent – even through Christmas when budgets can be tight.

But we have always been clear that there needs to be protection for both tenants and landlords if people build up arrears and to target help at those people who should not be placed on direct payments.

The Projects are helping us to develop and set this protection and that is why we are extending them for 6 months.

New figures from the Demonstration Projects show 6,168 tenants received direct payments, the total level of rent charged stood at £19,204,022 and an increase in the average rent collection rate to 94% – with levels of rent payment rates on the projects varying from 91% to 97%.

The projects are investigating a range of different elements of direct payments to provide protection for landlords and tenants including:

  • levels of support tenants may need to start direct payments, such as advice on managing personal finances and budgeting
  • the exemptions that need to be in place for direct payments
  • payment switch-backs to the landlord if a tenant falls into arrears
  • the support needed to help tenants in arrears to pay back their arrears and to potentially return to direct payments
  • early intervention switch-backs before arrears reach trigger points

Findings from the 6 areas covering the first 9 payments of housing benefit directly to tenants is available here: www.dwp.gov.uk/docs/direct-payment-demo-figures-may-2013.pdf

More information

The 6 direct payment demonstration projects are:

  • Dunedin Canmore Housing Association in Edinburgh, working in association with The City of Edinburgh Council
  • Oxford City Council and Oxford Citizens, (part of the) Greensquare Group, Southern England
  • Shropshire Unitary County Council and Bromford Group, Sanctuary Housing and The Wrekin Housing Trust, West Midlands
  • Southwark Council and Family Mosaic, London
  • Torfaen County Borough Council and Bron Afon Community Housing and Charter Housing, Wales
  • Wakefield Metropolitan District Council and Wakefield and District Housing, Northern England

The English and Welsh projects went ‘live’ in June and July 2012. Edinburgh at the end of August.

Findings from the first four months are available here: www.dwp.gov.uk/docs/direct-payment-demo-figures.pdf

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Published 16 May 2013