Department for Work and Pensions (P-001044)

  • 1.	We consider that the procedure DWP set up whereby it obtained consent from a Universal Credit (UC) claimant to have their housing costs paid directly to their landlord when a landlord made this request was implemented appropriately. For the landlord’s request to be considered further the claimant had to agree to this.
    2.	DWP took into account relevant legislation and what its duty was under this legislation when implementing this procedure. The information we have seen indicates DWP appropriately considered potential risks to UC claimants and why it needed the procedure in place. It also drew on relevant documents about the UC programme’s overall policy intent to inform its approach. We can also see evidence, as this was a new procedure for a new type of benefit, that DWP planned a mechanism to evaluate its effectiveness after a period of testing.
    3.	As there is evidence DWP implemented this procedure after going through an appropriate decision-making process, and it then followed this procedure when handling Dr N’s requests, we have decided not to uphold this complaint.
  • 4.	Dr N complains that when DWP processed Alternative Payment Arrangement (APA) requests he made for three of his tenants in receipt of UC in June 2017, staff sought consent from the tenants to set up the APAs when they should not have done. Because the tenants refused to give consent to the APAs they were not set up.
    5.	He says he lost rent from his tenants that would have otherwise been paid had the APAs been set up. He says the value of this is approximately £15,000. Because of the losses he sustained, he withdrew some of his properties from the local authority marketplace because he considered it was too risky to take on UC dependent tenants. He says this damaged his relationship with the local authority. He adds that he had to spend time complaining about his APA requests not being set up when he should not have had to.
    6.	He seeks a financial remedy to recognise the amount of time he spent going through DWP’s complaint process.
  • 7.	The UC programme launched in 2013, initially in a small number of postcodes, before being rolled out more widely. For people claiming benefits, it sought to replace several existing benefit types so that claimants would get one monthly payment to cover all their living costs.
    8.	As part of the UC programme, provision was made for APAs to be put in place so that claimants who had difficulty managing their finances could have their housing costs paid directly to their landlord from their UC. Either the claimant or their landlord could ask DWP to set up an APA.
    9.	Prior to 21 December 2017, when a landlord asked DWP to set up an APA for one of their tenants, it was DWP’s procedure to ask the UC claimant for consent to do this. If DWP did not obtain consent, staff did not consider the APA any further and it was DWP’s procedure to tell the landlord that the APA would not be set up.
    10.	Dr N completed UC47 forms for the three tenants in question. He asked that DWP paid their rental costs directly to him from their UC. The forms he completed set out what each tenant’s monthly rent was, that the reason he was asking for the APAs was because these tenants were in arrears, and by how much.
    11.	One of these tenants did not have an active UC claim so no payment could be made. DWP asked the other two for consent to set up the APA. Both declined to consent to it in September 2017 and the APAs were not set up. Dr N made no further APA requests for these tenants.
    12.	On 21 December 2017, DWP changed the procedure for administering APA requests. It removed the step of contacting a UC claimant for consent to consider the request further.
  • 13.	To reach our decision, we have looked at information provided by Dr N. This includes his complaint form with his account of events. This also cites policy documentation and legislation that he considers relevant. We also considered his comments when we proposed to investigate this complaint, and his comments on our provisional views. He also sent us the Independent Case Examiner’s (ICE) investigation of his complaint. 
    14.	We have looked at DWP’s comments on our proposal to investigate. It has also sent us documentation explaining its reasons for setting up the procedure of asking for consent from UC claimants to APAs and what it considers to be the relevant legislation setting out its responsibilities with respect to APAs. It provided a step by step guidance document its staff used when administering APAs. It also sent us information about why it changed the procedure and documentation on engagement it did at the time of the change.
    15.	Specific to the administration of Dr N’s APA requests, DWP sent us its case records relating to each of the three tenants when it handled Dr N’s requests.
    16.	We also considered comments both DWP and ICE provided on our provisional views.
    17.	We use related or relevant law, policy, guidance, and standards to inform our thinking. This allows us to consider what should have happened. In this case we have referred to the following standards:
    •	Our Principles of Good Administration, February 2009 (our Principles). 
    •	Regulation 58 of The Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment Support Allowance (Claims and Payments) Regulations 2013 (the UC Regulations).
    •	House of Commons Briefing Paper, Number 6547: Housing costs in Universal Credit, 8 May 2019 (the UC Briefing Paper). 
    Dr N’s and DWP’s views on the matter 
    18.	Dr N complains that when DWP processed his requests to set up APAs for the three tenants in question, it sought consent from his tenants to do so. He says the APAs were not set up because his tenants did not consent to them. As his tenants were in rent arrears, he believes the APAs should have been set up anyway so he could receive rent.
    19.	During the complaint process, both ICE and DWP said staff followed DWP’s operating procedure at the time. This was to seek consent from Dr N’s tenants for the APAs to be set up. As consent could not be obtained, the APAs were not considered further. DWP and ICE consider this was appropriate.
    20.	Dr N says that DWP’s operating procedure at the time was the problem. He considers it was causing widespread rental losses to landlords and permitting delinquency for UC claimants who were misusing the housing element of their UC. He says these were reasons not to have the procedure in place.
    21.	He adds that DWP knew about these problems well before the procedure was changed in December 2017. He explains his advocate, who represents several landlords, engaged in correspondence in 2014 and 2015 with the Director General and Operations Director at the time.
    22.	He says the procedure ran counter to the policy intention of the UC programme. He says the APA scheme was designed to protect the interests of financially vulnerable tenants from accruing rent arrears, risking eviction, and then homelessness. He says this policy intent was set out in the UC Briefing Paper.
    23.	He says DWP has not properly considered the UC Regulations. He says these give it discretion to redirect rental payments to landlords when this is in the interest of the UC claimant (and tenant), and nowhere does it say there is a need for them to consent to this.
    24.	The crux of the complaint here is not that DWP did not follow its procedure in obtaining consent to Dr N’s APA requests from his tenants. It is that the procedure, and how it came into being, is, according to Dr N, flawed and wrong. Then, in following this procedure when Dr N made his APA requests, he says these requests, wrongly, were not considered further and failed.
    25.	When we proposed to investigate this complaint, DWP sent us information on how and why the procedure came into being. It considers the process behind its design was appropriate and there were valid reasons for taking the decision to implement it. As such, it does not consider it acted improperly in implementing the procedure and then following it.
    26.	As this complaint relates to the implementation and content of a procedure, rather than a failure to follow it, we have considered whether DWP’s actions in implementing it were in line with our Principles. These say, in implementing policies and procedures, public bodies should plan carefully when introducing new ones. They must comply with the law and have regard for the rights of those concerned. They should act according to their statutory powers and duties and any other rules governing the service they provide.
    27.	In this case, the merits of the procedure to ask for explicit consent to APAs are contested. Our role is not to outright say what our view of the procedure is or which side’s view we agree with. Only if we can see fault in the way the procedure was devised and implemented can we consider this further. We decide on whether there were any faults based on whether the procedure was implemented in line with our Principles.
    28.	DWP has summarised what its reasons were for the procedure of consent being set up regarding APAs, and what legislation it considered in the design of this procedure. It confirmed that the UC Regulations set out its powers and responsibilities with respect to paying parts of someone’s UC to another person. This aligns with what Dr N says is the relevant legislation.
    29.	DWP explained its design decision on the consent procedure. It planned that the procedure would consist of the following steps:
    •	housing costs would ordinarily be paid to the UC claimant to manage their own finances and pay their rent
    •	where required or appropriate, a landlord could request a managed payment for the claimant’s housing costs so they could be paid directly to the landlord to secure the tenancy
    •	the claimant would then be asked whether they approved of the housing costs being paid to the landlord - costs would continue to be paid to the claimant until they had responded
    •	if the claimant did not respond, housing costs would continue to be paid to them.
    30.	DWP says the principles behind this approach were:
    •	to allow the UC claimant to take ownership of the process
    •	to promote UC claimants taking responsibility in managing their own financial affairs, including paying rent
    •	to protect claimants’ privacy by preventing third parties trying to find out if they were on benefits against their wishes. There were concerns that, without consent, the process could be exploited simply to establish if someone received UC.
    31.	DWP says paying claimants directly is a fundamental part of UC that seeks to promote independent management of their own affairs. When UC started to be phased in, from 2013, and this procedure became active, DWP considered this was in keeping with the overall aim of the UC programme. As UC was new, DWP explained that it adopted a ‘test and learn’ approach. It gradually increased its UC caseload over time.
    32.	In line with this approach, DWP said that the procedure concerning consent for APAs was reviewed. Having had the procedure in place for a period, by 2017, it had received a consistent pattern of feedback that the approach was not working. It then explained to us the steps it took thereafter.
    33.	On 24 May 2017, staff from its policy team, in partnership with staff from the UC product team decided to investigate the effectiveness of the procedure. These staff met on 30 May to discuss whether the balance was right between protection of tenants from potentially unscrupulous landlords and ensuring that APAs could be put in place for vulnerable people. Staff decided to seek legal and policy interpretations on the procedure.
    34.	The advice that was sought focused on whether data protection regulations impacted on landlords receiving direct payment of housing costs as part of an APA for their tenants. DWP was advised that sharing personal data (including whether a person was in receipt of UC) with a landlord was permitted where there is a regulatory power. The advice confirmed that as the UC Regulations permit such payments to third parties (including landlords), DWP would not be breaching data protection laws if consent was not sought from the claimant. The policy team and UC product team received this advice in June.
    35.	On 13 July, DWP said conversations were held at an internal governance body to share the investigation findings so far and agree next steps. Staff agreed to collect more data, understand the legal position, and conduct research with UC claimants with housing costs who may have been impacted by APA requests. The research found, in summary that:
    •	most UC claimants (consulted through the research) wanted APAs whether they had been requested by their landlord or not
    •	all had financial concerns and felt an APA would help with these
    •	none of them were worried about disclosing their UC status to a landlord
    •	claimants felt their budgeting needs may have been missed by DWP staff
    •	many considered themselves as having a complex need.
    36.	DWP said that the research informed a meeting on 7 September whereby the internal governance group proposed subsequent changes. This was to remove the need for the UC claimant to give consent to an APA, but to introduce a step where they could raise a doubt about a request. These were agreed in the meeting.
    37.	On 12 October, DWP says there was a meeting with the UC private landlord forum (which meets quarterly). This comprised representatives from DWP, private housing representative trade bodies and private rented sector landlord groups from various parts of the UK. In this meeting, representatives from these bodies confirmed that the problems DWP found through its research with the existing procedure were consistent with their experiences. The representatives present supported changes to the procedure.
    38.	DWP says that it then went through its own internal design assurance processes to change the procedure and produce supporting instructions on it for staff. When this was designed and approved, the procedure went live on 21 December.
  • 39.	Having outlined DWP’s basis for the procedure for consent being implemented, we went on to consider if this is in line with our Principles.
    40.	First, according to our Principles, the implementation of the procedure should have taken account of relevant legislation and what this allowed or required DWP to do. The UC Regulations set out when payment of UC, or part of it, can be made to another person on the claimant’s behalf. Regulation 58 says:
    ‘The Secretary of State [DWP in practice] may direct that universal credit be paid wholly or in part to another person on the claimant’s behalf if this appears to the Secretary of State necessary to protect the interests of—
    (a) the claimant;
    (b) their partner;
    (c) a child or qualifying young person for whom the claimant or their partner or both are responsible; or
    (d)  a severely disabled person, where the calculation of the award of universal credit includes, by virtue of regulation 29 of the Universal Credit Regulations, an amount in respect of the fact that the claimant has regular and substantial caring responsibilities for that severely disabled person.’
    41.	This is the relevant legislation for DWP to have based its operating procedure on because it sets out when DWP can consider paying a claimant’s UC to another person. It makes no mention either way as to whether the UC claimant should need to consent to any decision DWP makes on this. It allows DWP to pay the UC entitlement of a claimant to another party if it considers this is needed to protect the claimant’s interest.
    42.	Regulation 58 indicates that the most important thing DWP needed to do in putting this into practice was to carefully consider UC claimants’ interests in making any payments from their claim. The regulation gives DWP discretion to decide what a UC claimant’s best interests are and it is DWP’s responsibility to protect those interests.
    43.	Our Principles say, not only should public bodies have regard for relevant legislation, but they should also take account of relevant considerations in making decisions. Assessing risk is also something public bodies should do in making decisions.
    44.	DWP considered what the interests of UC claimants might be and therefore how they might need protecting when planning and deciding on its procedure. In thinking about risks to a claimant’s best interests, DWP considered that private sector landlords could request direct payments for rent. In responding to such requests, DWP could divulge information on whether the tenant they were claiming for was on UC, and other personal information, in explaining any decision.
    45.	DWP considered this presented possible privacy problems and could influence actions of landlords that may have brought negative consequences to claimants. In meeting minutes DWP sent us, there was a landlord association that reported it issued eviction notices upon finding out any tenant was on UC.
    46.	This indicates that there was a potential risk that in processing such requests and explaining any decision to a landlord, including if there was an active UC claim, there could be a detrimental impact on the claimant’s interests, including their privacy. As we have already set out, the UC Regulations say it is DWP’s role to protect the claimant’s interests.
    47.	By DWP approaching claimants for consent to consider further any APA requests, it would gain a better idea on the circumstances of their tenancy, whether the request was genuine, or if exploitation of the system was happening to obtain personal information. If the latter was true, DWP planned to tell the requesting landlord that the request failed, and nothing further, thus not providing what DWP considered potentially compromising information about the claimant.
    48.	We recognise that others, including Dr N, disagree on how likely these things were to happen, and whether a UC claimant’s interests were better served by DWP assessing the merits of an APA request without the involvement of the claimant. However, in deciding whether a payment was in the claimant’s interest, DWP considered there was a risk it may not protect the interests of a claimant if it did not get in touch with them about an APA request. We consider this to be reasonable as the UC Regulations say protecting the claimant’s interests is necessary in considering any payment.
    49.	DWP also considered that there were other reasons to obtain consent from UC claimants. It says the overall aim of the UC programme is to promote ownership and encourage claimants to take responsibility for managing their financial affairs independently. It considered that this principle also applied to paying their own rent.
    50.	The UC Briefing Paper, that Dr N cited in his complaint to us, gives detail on the intended aim to pay housing costs direct to UC claimants. It says ‘the Government's intention is to pay UC to the claimant in the majority of cases. The Government believes that this policy will replicate the budgeting skills that people will need when working and will help to break the cycle of welfare dependency that is a feature of the current benefit system’.
    51.	Therefore, in its reasoning on implementing this procedure, DWP considered an over arching policy intention that the Government set out in respect to the UC programme.
    52.	Our Principles also say that public bodies should plan carefully when introducing new policies and procedures.
    53.	DWP considered, that as UC was a new programme, and its service users would not yet be able to provide feedback on how it worked in practice, it needed a mechanism to evaluate the practices it put in place. It planned for this as it adopted a ‘test and learn’ approach. This methodology is set out in more detail in work it commissioned to evaluate what could be learnt from its roll out of UC across the programme. This work was published in 2017 in partnership with Ipsos MORI (the Test and Learn Evaluation).  This demonstrates that DWP planned a systemic review of the UC programme after a period of ‘testing’.
    54.	We consider that the above demonstrates that in devising and implementing its consent procedure, DWP considered the relevant law, what its duty was, and the rights of the service users the UC Regulations gave provision for. In deciding on the interests of UC claimants, which the UC Regulations say DWP should protect, DWP considered potential risks to UC claimants that could have stemmed from APA requests. This informed its decision on what procedure it implemented to try and mitigate this. It also took into account relevant over arching policy considerations, as set out in the UC Briefing Paper, in deciding on the procedure it put in place. This is in line with our Principles.
    55.	Its ‘test and learn’ approach pre-planned for an evaluation of the effectiveness of what was a new programme. This demonstrates careful planning considerations so that there was a mechanism to check if procedures within the UC programme were working, which is in line with our Principles.
    56.	We recognise that Dr N, and seemingly other landlords and their associations, may not consider DWP’s reasons for the procedure that it implemented as valid. We cannot replace a decision an organisation has made that it is entitled to make as part of its responsibilities and has made without maladministration. Neither can we take further action with respect to what the organisation has decided when it has gone through a proper process in deciding what to do.
    57.	We recognise the procedure DWP implemented proved to be controversial and there were reasons to change it later. However, as it implemented the procedure in line with our Principles, we are not critical of this.
    58.	We understand that the procedure had been active for around four years when Dr N requested APAs in 2017. He says feedback had been provided on the procedure well before this. Therefore, we can appreciate he feels that DWP might have acted faster to change it.
    59.	In line with its approach, DWP would have to ‘test’ for a period before it could ‘learn’ and then make changes. How long this ‘test’ period lasted would be something DWP would need to plan, as indicated by our Principles, and decide on independently.
    60.	The Test and Learn Evaluation shows that, regarding the UC programme in general, DWP gathered information on UC using surveys and interviews throughout 2015 and 2016, and this had been planned. This was after allowing a period of two years for the programme to run.
    61.	In specific respect to APAs, DWP considered there was a consistent body and pattern of feedback about its consent procedure after a period of ‘testing’ by the first half of 2017. This indicated it, often, was not beneficial to UC claimants, and in practice resulted in a greater risk of eviction and possible homelessness.
    62.	In line with its initial approach of ‘test and learn’, which we consider was devised in line with our Principles, DWP then sought to make changes. We do not consider we can be critical of DWP as it followed the approach it had planned for. It considered changes to the procedure when it was confident feedback indicated a firm need for this.
    63.	We recognise that Dr N’s APA requests were made at a time DWP were considering changes to its APA procedure, but DWP had not yet gone through its internal assurance processes so the changes could go live. Therefore, it was following the procedure it initially implemented at the outset of the UC programme.
    64.	As this procedure was implemented in line with our Principles, and DWP was going through similar planning processes to devise the new procedure it eventually implemented, we do not consider it was inappropriate that DWP did not set up his APA requests when his tenants did not consent to them. This was in line with its procedure at the time.