Evidence is emerging that a vital component of Iain Duncan Smith’s welfare reforms - intended to protect vulnerable tenants and social landlords alike – has been bungled by Minister for Welfare Reform Lord Fraud.
The ‘financial products’ which Lord Fraud promised would support low income tenants with budgeting when the new payment structure is introduced don’t appear to actually exist.
To much fanfare Lord Fraud announced last September that private companies were being invited to create ‘financial products’ to help claimants manage their money under the new regime. A tender was issued which astonishingly revealed that claimants were to be charged for this service and also seemed to include a possible entry point for High Street loan sharks to trap claimants in debt.
The successful bidders were supposed to be announced last December. They weren’t and no explanation was ever given why. The only clue as to what’s actually going on comes from allpay.net, a company eager to get their greedy hands on some tax payers cash via the welfare reforms.
According to them: “allpay was one of a number of financial providers that attended the DWP’s procurement day and had been expecting the DWP tender in November. However, following a revised timetable for the procurement, allpay is not expecting to be updated on the DWP’s position until January. The department has also warned suppliers not to expect a tender in either January or February.”
Universal Credit is due to be begin in April, which means that the protection for so called vulnerable claimants that Lord Fraud has long promised, will not be ready for the launch.
This may come as a shock to Social Housing providers who have repeatedly warned that they anticipate losing millions due to the change in the way benefits are paid. This will create a homelessness double whammy as more tenants are evicted for rent arrears, and social housing providers have less money to build new houses.
When Universal Credit begins in April this year, claimants will receive payments monthly as opposed to fortnightly or weekly as most do now. Housing Benefit payments, which many claimants currently have paid direct to landlords, will in future be paid to tenants.
This has led to concerns from Social Housing providers that many tenants – already struggling under the tsunami of cuts – will find it difficult to balance budgets and are likely to slip into rent arrears. A series of pilots of the new payments system has revealed these fears to be well founded, with rent arrears doubling in areas where the new system was trialled.
Up until recently Lord Fraud’s new ‘financial products’ were the answer to all these problems as he claimed: “Accounts that provide people with extra budgeting services could help to ensure people’s essential bills are covered – helping them to build up their credit rating and break the cycle of financial exclusion.
“We are anticipating the call for new financial products may open up a new market place, where competition is strong.”
In a downbeat speech this week Lord Fraud did not even mention the bodged procurement, instead garbling: “we recognise that there will always be some hard cases. Where this is the case vulnerable claimants could be made an exception to the payment rules for a period of time. Budgeting support will also be made available to support these individuals so that they can make a successful transition over time to the Universal Credit standard monthly payment.”
Not for the first time, it sounds like he’s making it up as he goes along and his ‘financial products’ seem long since forgotten.
Lord Fraud hasn’t been given much to do when it comes to the nitty gritty of welfare reform. Iain Duncan Smith may be stupid, but he’s clever enough to know that all the old fraud is good for is standing round looking posh.
But these financial products were his chance to show that he isn’t just some comedy toff with a pervy grandad. And he fucked it up. The truth is the Minister for Welfare Reform couldn’t run a bath without flooding out the building and getting his knob stuck in the plug hole.
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