The Chartered Institute of Housing (CIH) claimed a significant success for the housing sector, as Welfare Minister Lord Freud announces demonstration projects to explore the practicalities of paying help with housing costs directly to social tenants.
CIH Interim Chief Executive Grainia Long said:
"This announcement shows that Government has listened to expertise shared by CIH and others. We are pleased by Government's commitment to balance the principle of making payments direct to tenants with the need to minimise risks and protect the vulnerable.
"Clear articulation of the practical knowledge and experience of housing professionals, lenders and tenants has played a significant part in getting to this point."
The Welfare Reform Bill contains a clause which would allow the housing element of universal credit to be paid direct to tenants - ending a long standing practice where Housing Benefit for tenants getting their full rent covered usually goes straight from the local authority benefits department to the landlord.
This clause had raised fears that the change would lead to increasing arrears, financial hardship and evictions and increase the cost to landlords of actually collecting the rent.
Possibly the largest opposition has centred on the likelihood that increased risk of greater rent arrears and interrupted cash flow would negatively affect lending to housing associations - lending which underpins new development and other investment in property and communities.
Grainia Long further said:
"CIH has been working with Government and housing professionals throughout the summer to illustrate how risks arising from direct payments to tenants can be minimised. Identifying types of people who are likely to struggle with managing large amounts of money, and the types of intervention that could help them, has been central to this.
"A housing professional would not set a tenant up to fail or wait until a tenant falls into arrears before they act, and we wouldn't want the new benefits system to do this either.
"The demonstration projects are a good opportunity to build the principle and practice of prevention into the Universal Credit. The projects have a lot of work to do to identify suitable processes, advice provision, and financial tools to make this work, and we welcome the chance to get it right before roll-out across the UK.
"CIH has many concerns about the Welfare Reform Bill and is continuing to press the Government to make significant changes before it becomes law."
Click here for a transcript of the speech by the Minister for Welfare Reform, Lord David Freud, at the National Housing Federation annual conference on 14 September.
He talks about acting to reduce welfare dependency, and the benefits of the Government's plans on universal credit and the work programme.
