The Conservative’s victory in the General Election and in particular the retention of Iain Duncan Smith as Work and Pensions Secretary should interpreted by housing providers as a clear indication that the widespread roll-out of universal credit is definitely going to happen, despite some misgivings over its technical implementation and its effect on housing providers’ incomes and cash flows.
As we have covered in past issue of Housing Technology, while neither the actual details of how universal credit is implemented nor the nuances of its IT platform are of direct relevance to most housing providers, the results of the ‘pathfinder’ pilots and numerous pieces of research all provide very clear evidence that (surprise, surprise) rent arrears increase when the housing component of benefits is paid direct to the claimants.
Regardless of your view of the political and sociological merits (or otherwise) of universal credit, it seems pretty certain that every housing provider will have higher rent arrears. As John Doyle from the Housing Contact Company explained, “For the first time in recent memory, housing providers will have to compete for the bulk of their rental income. This won’t be a challenge just for the income team, but one that needs to be faced by the entire organisation… …it’s even worse when you consider that your new competitors, such as BrightHouse or Wonga or even the regular utility companies, will have their data sorted and be acting on it quickly.”
Most housing providers still have time (but not long) to work out how they are going to deal with increased arrears. And rather than simply increasing the number of income collections staff, the smart thing to do is to use technology and automation to streamline how you deal with the majority of arrears case so that human intervention is only required for the most extreme or complex cases.