New evidence heaps pressure on ministers to halt Universal Credit

dwpA dossier detailing a catalogue of concerns from landlords, councils and charities regarding Universal Credit has been handed to a parliamentary inquiry investigating the programme as pressure mounts on ministers to halt its continued roll-out.

With the accelerated roll-out of the new system just weeks away, some warn that rent arrears among tenants receiving Universal Credit are running at three, four or even five times the level of those on the old system. Three councils whose tenants have already been moved on to universal credit said they had built up about £8m in rent arrears. Croydon, Hounslow and Southwark said that more than 2,500 tenants claiming it were now at risk of eviction.

The Observer reported that marriages had broken down as a result of the extra pressures of waiting for payments, while some landlords are now choosing not to accept tenants on Universal Credit.

Figures obtained through the Freedom of Information Act show that half of all council tenants across 105 local authorities who receive the housing element of Universal Credit – which replaces housing benefit – are at least a month behind on their rent, with 30% two months behind.

London Councils, the body that represents the capital’s 32 boroughs and the City of London, said the new system “places both claimants and local authorities in a position of financial insecurity”. It said that in areas where universal credit had been fully implemented, there had been “a dramatic decrease in rent collection with many tenants immediately falling into rent arrears”.

The Peabody Group, a housing association that owns and manages more than 55,000 homes in London and the south-east, said the rate of rent arrears among its tenants on universal credit was three times greater than those not on the new benefit. It said the average level of arrears for those on universal credit was £1,400 per household.

Halton Housing Trust, which owns and manages 7,000 homes in Cheshire, said that while just 17% of its customers were receiving universal credit, they owed 47% of all its outstanding arrears. “We are also seeing an increased risk of claimants who are unable to sustain their tenancy due to increased rent arrears,” it said.

Plymouth Community Homes, which has more than 14,000 social rented homes, said 69% of its tenants on Universal Credit were in arrears, compared to 29% of all tenants. Gloucester City Homes, which has more than 4,000 rented properties, said 85% of its universal credit claimants were in arrears compared to 20% of all other tenants. Islington council in London said 81% of its Universal Credit claimants were in arrears, compared to 29% across all of its tenants. Chesterfield Borough Council said 77% of its tenants in receipt of Universal Credit had rent arrears.

The Trussell Trust, Britain’s biggest food bank network, said that it had come across “instances of people referred to food banks having to wait for far longer periods , including up to 10 and 13 weeks” for their first payment. It also reported four recent instances of people dealing with the breakdown of marriages due to financial pressure.

The new evidence comes after the Scottish Federation of Housing Associations (SFHA) warned that the continued roll-out of Universal Credit would have “catastrophic consequences” for some of the most vulnerable in society as well as undermine the sustainability of housing associations.

Last month a group of 24 charities signed a joint public letter calling for the roll-out to be stopped.

A DWP spokeswoman said: “Universal Credit is getting more people into work than the old system. It mirrors the way most people in work are paid, helping to ease the transition into employment.

“The majority of claimants are comfortable managing their budgets, and for people who need extra support, advance payments are available.”

Share icon
Share this article: