Universal Credit endangers efforts to limit spread of coronavirus, warns thinktank report

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PRIVATE renters are terrified of becoming homeless as a result of coronavirus, a thinktank claims, prompting calls for serious reform of Universal Credit.

In a briefing paper issued today, the Royal Society for the Encouragement of Arts, Manufactures & Commerce (RSA) has revealed what it says is the “harsh reality” of the pandemic’s impact on private renters.

Polling carried out last Thursday by Populus on the thinktank’s behalf finds that the youngest generation is suffering the most.

One in six (16%) of workers said they seriously feared becoming homeless due to missing rent or mortgage payments as a result of coronavirus. This was most acute amongst renters (26%), young people under 35 (22%), and those in insecure work (33%).

It also shows that pressures of rent and mortgage payments could force people to work even if they displayed symptoms of Covid-19: 43% of renters and 40% of mortgage holders said they would feel obliged to work if they become unwell with it, due to needing the income.

The starkest finding is the impact of the virus on mental well-being: 55% of private renters say that the coronavirus has had a direct effect on their mental health or anxiety due to money worries.

“The Government’s approach to the private rental sector has been ill thought-out during this crisis, prioritising mortgage holders over the millions of private renters, many of whom are self-employed or in insecure work,” said Hannah Webster, senior researcher at the RSA. “Any further policy announcements must include a greater package of support for renters, to ensure that they can remain in their homes during the pandemic.”

Last week, the Government promised protections for renters, setting out some measures to suspend new eviction proceedings for three months. But many commentators felt these protections didn’t go far enough, and simply amounted to postponing evictions rather than offering renters any real protection.

Universal Credit also presents problems for those impacted by the virus, with the DWP indicating that it would not be loosening the infamous five-week wait before claimants receive their first payment; instead offering faster loan advances.

The benefit has proved controversial since it was first introduced, with a wealth of reports highlighting its disastrous impact on many of the poorest and most vulnerable households. It has been found to drive up rent arrears, push people towards a reliance on food banks, and increase deprivation and poverty.

Earlier this week, it was reported that there has been a surge of claimants, with almost 500,000 new claims as the pandemic impacts people’s livelihoods. Such is the demand, that the DWP’s systems struggled to keep pace.

Calls for its reform have been incessant – little heeded by ministers – but the coronavirus is adding new urgency.

The RSA’s report, meanwhile, has found that the public is keen on measures to alleviate the issues it highlights.

A guarantee of housing costs was the most popular financial support package in the survey, with 83% of workers supporting the measure. Across all age groups support for this was above 80%, and even amongst those who owned their home outright this policy this was supported by 77%.

In response, the RSA has called for a package of support for private renters, including:

  • An increase to the local housing element of universal credit, from the 30th percentile to the median rent in a given area
  • A removal of the ‘shared accommodation rate’ limit for under 35 year olds. This restricts most childless, young claimants to a payment scaled to rent for shared accommodation rather than a one bed or more
  • More rapid payment of Universal Credit, through the advance payment system

It warns that not taking these measures could have a negative impact on attempts on the Government’s strategy of containing the virus, by forcing people into work or making people move households due to eviction.

“Universal credit needs to go further,” Webster added. “In these difficult times, increasing the local housing allowance and removing the shared accommodation rates would go some of the way in providing security for those who need it most. On a wider level, a basic income could alleviate many of the issues faced by our precariat.

“This crisis should also spark a discussion about how we can build a resilient housing system. We would also urge the Government to come good on its recent promises, such as the removal of ‘no fault’ evictions and meeting social housing targets.”



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