A new report by Brighton and Hove council has found that the flagship policy of the Department for Work and Pensions (DWP) is causing spiralling rent arrears in the city. And the council is being forced to pick up the pieces.
It’s just another day in the life of Universal Credit (UC).
As the Argus reported:
More than two thirds of people on universal credit living in council homes in Brighton and Hove could not pay their rent in the first three months of the year…
68 per cent of the 498 households on universal benefit had average rent arrears of £473 between January and March.
The council reported that the total rent arrears for people in council homes topped £150,000, although 93% of this has now been paid. And arrears for people in temporary accommodation are nearly 3 times this total at £434,000.
Brighton and Hove council’s report warns that the complexities of switching to UC are hitting it hard:
Overall it is clear that the change to universal credit is creating resource pressures for council services.
It is arguable that this is inevitable during any process of change of this scale.
However, the rules and delivery structures around universal credit (which vary significantly from the legacy benefits system) may mean these pressures are in fact not transitional but ongoing.
And the Argus reported that:
the council has held 93 personal budgeting sessions and 65 assisted digital sessions in the first three months of the year.
The DWP created UC supposedly to simplify the benefits system. But in many cases, it seems to have had the opposite effect. Brighton residents join a long list of people who have been forced into rent arrears when moving onto the benefit.
The BBC reported that:
More than 70% of council tenants in London on Universal Credit are in rent arrears.
And a freedom of information (FOI) request sent by the Observer in 2017 revealed 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.
By contrast, less than 10% of council tenants on housing benefit are a month behind on their rent, with under 5% running more than two months behind.
It’s no surprise that a report by Homeless Link has stated that UC is contributing to Britain’s homelessness crisis.
The bigger picture
The stress Brighton and Hove council is feeling due to the calamitous rollout of UC is indicative of a wider problem.
Newcastle city council reported that it was spending £390,000 supporting UC claimants, almost a quarter of which was for additional rent arrears support.
Liverpool city council said it had spent £175,000 from its local welfare provision scheme on UC claimants, while Shropshire council said it had set aside £20,000 to help food banks to “diversify the type of help they are able to give specifically to suit universal credit.”
In London, Tower Hamlets council said it had set aside £5m over three years to help those affected by the shift to UC, while Barking and Dagenham is budgeting £50,000 from January 2018.
In total, 26 councils said they had set aside extra resources or anticipated increased demand for welfare support as the UC rollout reaches their area.
This is clear evidence of how DWP incompetence is causing havoc for already cash-strapped local authorities. Spiralling rent arrears reduce a council’s income while increasing the demand for support services.
The plight of Brighton’s residents and the council is unfortunately typical of when UC grabs hold of an area.
It causes havoc, leaving local authorities to pick up the pieces.
– Contact Step Change for expert debt advice.
– Read The Canary‘s full analysis of Universal Credit.
Featured image via DPAC and UK government – Wikimedia