House of Commons Communities and Local Government Committee Implementation of welfare reform by local authorities Ninth Report of Session 2012–13 Volume II Additional written evidence Ordered by the House of Commons to be published 26 March 2013 Published on 3 April 2013 by authority of the House of Commons London: The Stationery Office Limited The Communities and Local Government Committee The Communities and Local Government Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Department for Communities and Local Government. Current membership Mr Clive Betts MP (Labour, Sheffield South-East) (Chair) Bob Blackman MP (Conservative, Harrow East) Simon Danczuk MP Rochdale (Labour, Rochdale) Mrs Mary Glindon MP (Labour, North Tyneside) David Heyes MP (Labour, Ashton under Lyne) James Morris MP (Conservative, Halesowen and Rowley Regis) Mark Pawsey MP (Conservative, Rugby) John Pugh MP (Liberal Democrat, Southport) Andy Sawford MP (Labour, Corby) John Stevenson MP (Conservative, Carlisle) Heather Wheeler MP (Conservative, South Derbyshire) Heidi Alexander MP (Labour, Lewisham East), Bill Esterson MP (Labour, Sefton Central) and Stephen Gilbert MP, (Liberal Democrat, St Austell and Newquay) were also members of the Committee during this inquiry. Powers The committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the internet via www.parliament.uk. Publication The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the internet at www.parliament.uk/parliament.uk/clg. A list of Reports of the Committee in the present Parliament is at the back of this volume. The Reports of the Committee, the formal minutes relating to that report, oral evidence taken and some or all written evidence are available in a printed volume. Additional written evidence may be published on the internet only. Committee staff The current staff of the Committee are Glenn McKee (Clerk), Sarah Heath (Second Clerk), Stephen Habberley (Inquiry Manager), Kevin Maddison (Committee Specialist), Emily Gregory (Senior Committee Assistant), Mandy Sullivan (Committee Assistant), Stewart McIlvenna, (Committee Support Assistant) and David Foster (Assistant Media Officer). Contacts All correspondence should be addressed to the Clerk of the Communities and Local Government Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 1234; the Committee’s email address is [email protected] List of additional written evidence (published in Volume II on the Committee’s website www.parliament.uk/clgcom) Page Administrative Justice and Tribunals Council Ev w4 Association of North East Councils Ev w93 British Property Federation Ev w41 Centrepoint Ev w48 Chartered Institute of Public Finance and Accountancy Ev w23 Child Poverty Action Group Ev w33 Circle Housing Group Ev w50 Core Cities Group Ev w19 District Councils’ Network Ev w37 Durham County Council Ev w9 East 7 Ev w17 East Riding of Yorkshire Council Ev w39 Gipton Supported Living Ev w117 Hull City Council Ev w96 Institute of Revenues Rating and Valuation Ev w66 LASA Ev w120 Leeds City Council Ev w62 Liverpool City Region Child Poverty and Life Chances Commission Ev w85 Local Government Ombudsman Ev w31 London Borough of Croydon Ev w45 London Borough of Hackney Ev w80 London Borough of Newham Ev w99 London Borough of Sutton Ev w89 London Borough of Tower Hamlets Ev w103 London Councils Ev w13 MasterCard Ev w127 National Association of Local Councils Ev w116 National Housing Federation Ev w1 New Policy Institute Ev w73 North West Landlords Association Ev w84 Oldham Council Ev w52 The Riverside Group Ev w55 Rochdale Council Ev w58 Royal National Institute for Blind People Ev w122 SIGOMA Ev w108 Southwark Council Ev w27 Stockton-on-Tees Borough Council Ev w69 Surrey County Council Ev w112 Waverley Borough Council Ev w119 West Midlands Metropolitan Council (Collective) Ev w77 cobber Pack: U PL: COE1 [SO] Processed: [28-03-2013 10:03] Job: 028287 Unit: PG01 Source: /MILES/PKU/INPUT/028287/028287_w040_odeth_027020_w010_JB_IWR 09 MasterCard.xml Communities and Local Government Committee: Evidence Ev w1 Written evidence Written evidence from the National Landlords Association Background 1. The National Landlords Association (NLA) exists to protect and promote the interests of private residential landlords. 2. With more than 20,000 individual landlords from around the United Kingdom and over 100 local authority associates, it provides a comprehensive range of benefits and services to its members and strives to raise standards in the private-rented sector. 3. The NLA seeks a fair legislative and regulatory environment for the private-rented sector while aiming to ensure that landlords are aware of their statutory rights and responsibilities. NLAEvidenceSummary 4. The NLA has sought to limit its evidence to the following areas of inquiry outlined by the terms of reference: (i) Is the guidance available to local authorities from central Government on implementing welfare reform adequate? Are there areas where more or better guidance is required? (ii) Is the Government’s timetable for implementing Welfare Reform achievable? (iii) Are there financial risks to local authorities from Welfare Reform changes? Are such risks being adequately addressed? (iv) Are there sufficient safeguards to protect social landlords from financial harm resulting from the payment of housing benefit direct to claimants? 5. The NLA contends that: — The implementation of Universal Credit, as intended by the draft regulations currently before the House, has the potential to have a significant destabilising, and subsequently detrimental, impact on the private rented sector. — The lack of financial safeguards, identified as a risk factor for social landlords, also represents a significant risk for private landlords operating in a parallel market. — Private landlords do not appear to have been given the same consideration in respect of mitigating the risk and costs of transition to Universal Credit. — Insufficient consultation of directly affected stakeholders has taken place concerning essential guidance. — The severity of potential damage caused by non-payment of rent in the social and private sector is not reflected in the planned correction mechanisms. — The assumption that landlords will be able, and willing, to absorb additional costs has not been sufficiently explored or evidenced. Consequently, little contingency planning appears to have taken place to source alternative accommodation for those in need or encourage greater investment. (i) Adequacy of Guidance 6. The NLA is not well placed to comment extensively on the adequacy of guidance issued to local authorities before the fact, as its members will only be able to judge its efficacy once it is used in practice to implement Universal Credit. However, the NLA is extremely concerned about the lack of industry consultation in respect of necessary guidance. 7. While it is likely that the relevant guidance relating to housing support has been reviewed by social housing providers and their representatives, there appears to be a reluctance to acknowledge that the transition to Universal Credit will also have a significant impact on private-residential landlords currently housing recipients of Local Housing Allowance. 8. This state of affairs is of particular concern given the intent of DWP to replace much of the existing regulation relating to payment of housing support with guidance. It remains unclear to what extent this guidance has been generated and whether it is likely to have statutory status. 9. Specifically the replacement of regulations relating to the exceptions (to direct payment) mechanism with, as yet, unknown guidance has introduced a degree of uncertainty into the market which will have a negative impact on investment by private landlords providing housing for those in receipt of housing support. 10. The NLA would like to see the DWP reconsider the policy of replacing essential items of regulation with guidance, or at very least increase their consultation with housing suppliers in respect of the formulation of statutory guidance to take its place. cobber Pack: U PL: COE1 [E] Processed: [28-03-2013 10:03] Job: 028287 Unit: PG01 Source: /MILES/PKU/INPUT/028287/028287_w040_odeth_027020_w010_JB_IWR 09 MasterCard.xml Ev w2 Communities and Local Government Committee: Evidence 11. It is also essential that the Department publishes all available information related to the current direct- payment demonstration project with a view to enabling stakeholders to evaluate progress and interpret regulation and guidance already in place. Without such open access to evaluation data it is impossible for those involved to comprehensively identify areas which may require further support. (ii) Timetable 12. The Government’s timetable is undoubtedly ambition and poses many challenges for local authorities, central agencies and the providers of housing, including private landlords. At present it is difficult to foresee a scenario whereby all of the planned demonstration projects, evaluations and implementation stages will be concluded on schedule. 13. In respect of the housing element of Universal Credit, a direct-payment demonstration project is already underway. However, no significant data