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Jim McGonigle District Manager East & South East Scotland Lyndean House, 199 Commercial Street, Edinburgh, EH6 60P Telephone 0131 555 8070 Fax 0131 555 8005 Textphone 0845601 6045 www.direct.gov.uk

Kezia Dugdale MSP The Scottish Parliament Holyrood Edinburgh EH991SP May 11 2012

Dear Ms Dugdale Direct payment of Housing Bene it to sele"cted tenants in preparation for the introduction of Universal Credit My reason for contacting you is to update you on changes to the way Housing Benefit will be paid to a small number of tenants in the social rented sector in your area, as part of a series of demonstration projects run by the Department for Work and Pensions (DWP) with six volunteer local authorities. The demonstration projects will look at how tenants can best manage Housing Benefit monthly payments, ahead of the introduction of Universal Credit from October 2013. The projects, running from June 2012 until June 2013, will involve paying Housing Benefit directly to a small number of tenants on a monthly basis. Tenants will then make their rent payment to their landlord themselves. Advice, support and help in managing payments and budgeting will be provided locally. Up to 2,000 tenants in each area will participate. The six volunteer local authorities are now contacting the tenants selected to take part in the demonstration projects. As some of your constituents may contact you about this I am writing to provide-information to help you with any enquiries you may receive. What are the changes? A number of local authority and housing association partnerships are volunteering to work with the UK Government on changing the way Housing Benefit is paid in the social sector. The new projects will see some tenants in the social rented" sector receiving monthly Housing Benefit payments, paid directly to them for the first time. The projects, running from June 2012 until June 2013, will test how tenants can manage Housing Benefit monthly payments. This is ahead of the introduction of Universal Credit from October 2013.

Part of the Department for Work and Pensions

INVESTOR

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The projects will also look at the appropriate level .of safegu~rds needed to help protect a landlord's income if tenants fall behind on their rent as well as the support tenants also need. The local authority and social landlord partnerships named for the demonstration projects are: o The City of Edinburgh Council and Dunedin Canmore Housing Association, Scotland o Southwark Council (the local authority landlord) and Family Mosaic Housing Association, London o Oxford City Council (the local authority landlord) and GreenSquare Group Housing Association, Southern England o Shropshire Unitary County Council (the local authority landlord) and Bromford Group Housing Association, Sanctuary Housing and The Wrekin Housing Trust, West Midlands o Wakefield Metropolitan District Council and Wakefield and District Housing, Northern England o Torfaen Borough County Council and Bron Afon Community Housing and Charter Housing, Wales. . The projects will help local authorities and housing associations to prepare for the introduction of Universal Credit. Tenants will benefit from this also as their local authorities and housing associations will have the opportunity to develop the support they offer to tenants. The projects will help Government understand the best ways of: o Communicating these changes to tenants o Providing assistance with budgeting to ensure tenants successfully pay their rent o Developing appropriate safeguards to protect landlords' financial position if tenants do get into arrears o Supporting tenants and landlords experiencing financial difficulties. How will this affect tenants? Selected tenants are now being notified by their participating local authority of their inclusion in the projects. Participating tenants have been drawn from the social rented sector in their respective areas. In selecting people to participate, we have looked to choose a representative sample of social housing tenants in receipt of Housing Benefit who are of working age and not currently living in temporary accommodation. Pensioners and some other limited exceptions have not been selected and will continue to have their housing costs paid direct to their landlord. There is no option for selected tenants to opt out from participation in the projects. Local authorities will work with those tenants selected to take part to help them prepare for the switch to receiving their Housing Benefit directly.

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An independent external research consortium led by the Centre for Regional Economic and Social Research (CRESR) at Sheffield Hallam University has been commissioned to undertake an evaluation of the projects. Other members of the consortium are the Oxford Institute of Social Policy and Ipsos MaRl. Ipsos MaRl will contact a number of the selected tenants to take part in some initial survey work designed to help DWP understand how well tenants can manage their own rent payments and what type of support may be best for them. Any information given by tenants to Ipsos MaRl will be completely confidential. Why is this happening? Monthly direct payments for housing are a key part of Universal Credit, reflecting the fact that 75 per cent of all those in employment are paid earnings monthly (Bacs Family Finance Survey 2011). _ The Government is committed to supporting working-age recipients of Housing Benefit make the transition to a single monthly direct payment as part of Universal Credit. This change is seen as key to helping people develop the financial management skills required to move with ease from benefits into work by mirroring a regular salary. Maintaining single payment is also important so that claimants can see clearly the effect of their decisions about work on total household income. Although most of those in the private rented sector are already used to receiving their payments directly and managing their finances accordingly, it is recognised that for others, including many in the social rented sector, the change may raise additional challenges. I hope that this information is helpful to you. Should you require any further information, please do not hesitate to contact me. My details are at the top of this letter. Yours sincerely

J McGonigle
District Manager