In one town the DWP’s most toxic benefit has thrown two-thirds of people into rent arrears

The DWP logo and boarded up homes
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The Department for Work and Pensions (DWP) can’t even have a weekend off. Because on Saturday 22 February, a local media outlet revealed that in one town around two-thirds of renters on Universal Credit were in arrears.

The DWP: here we go again

As The Canary has continued to document, Universal Credit is the DWP’s flagship new benefit. But it’s in constant chaos, from taking bonuses from Greggs staff to the DWP not knowing if it causes poverty. The issues with the benefit led UN special rapporteur on extreme poverty Philip Alston to call it “Universal Discredit”.

Most recently, The Canary reported on two court cases about the benefit. One, which involves disabled people with high support needs, is looking for more claimants to come forward. You can read more about that here. But since then, a local media outlet has revealed the staggering impact Universal Credit has had on people who rent their homes.

How much???

The Northampton Chronicle & Echo has said that in Northampton alone, two-thirds of claimants on the benefit who rent from the council are now in arrears with it. As Alastair Ulke wrote:

The scale of debt problems felt by residents who rent from the council or Northampton Partnership Homes under universal credit (UC) has more than [doubled] in just eight months.

In June last year, the Chronicle and Echo revealed how 551 UC claimants were saddled with rent arrears, worth a total of some £288,500.

This amount is bad enough. Now, though, it’s got worse. Ulke wrote:

Read on...

But a freedom of information request by a member of the public has now shown that that number has ballooned to 1,186 in just eight months – and the total debt could be as much as £670,000.

In fact, two-thirds of all people in the town renting with UC are in debt for unpaid rent – and on average owe £565 each.

Perhaps the most shocking part was how this compares to one of Universal Credit’s predecessor benefits:

This compares to how just one-in-five people on the old housing benefit system are in debt, and only for around £199 on average.

At first glance, it seems unfathomable that the number of claimants in arrears could rise so much just because their benefits changed. But some groups have been warning about this problem for a while.

Perpetual chaos

As The Canary previously reported, in 2018 one housing association issued a damning assessment of Universal Credit. It said that at the time:

    • People on Universal Credit owe 63.7% of all rent arrears. But just 24.9% of tenants are on the benefit.
    • Universal Credit claimants’ arrears have increased by 76% on average
    • There was a £210,000 increase in arrears due to Universal Credit in a year.
    • Before Universal Credit, the average rent arrears was £207. Now it’s £365.

As BBC News reported in 2019, the Residential Landlords Association said that 54% of its members had tenants on the benefit fall into rent arrears in the past year.

“Causative of misery and homelessness”

Back in Northampton, Robin Burgess from charity The Hope Centre said of the situation:

In a nutshell, the scale of Universal Credit related rent arrears is a simple and direct testimony to the problems universal credit is creating and why it needs complete review: it is causative of misery and homelessness.

Northampton’s dire situation is not unusual. Similar rises in rent arrears under Universal Credit have been reported in Scotland, Wales, the West Midlands and Hull. But perhaps the most damning part is that the DWP knew claimants were having problems. Its own survey of claimants back in 2017 showed this.

When will this end?

The survey found that only 25% of claimants said they were “keeping up with bills… without any difficulties”. In total, 72% either struggled from “time to time”, struggled constantly, fell behind, or were having “real financial difficulties”. Across most measures, the benefit hit sick and disabled people the hardest. And around a third of claimants said they were in housing payment arrears.

These latest damning figures just add to the pile of problems with Universal Credit. But the DWP shows no signs of addressing any of this. Perhaps most telling is its insistence on fighting the legal system and claimants over the benefit. So, with the department’s continued negligence and wilful ignorance, it’s claimants who will ultimately suffer.

Featured image via Flickr – Mikey / Wikimedia – UK Government 

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  • Show Comments
    1. I always thought lower benefits would be felt by the commercial sector, as so many millions of pounds every week are lost to the overall economy through lower spending on essentials as much as fripperies, but I never guessed the problem would concentrate into such small geographical areas with damaging effects on localised economies, but now it has. A consequence unforeseen by the government?

      If so many landlords are finding their tenants unable to pay their rent, not through their own failings but the belligerent policies of the government, then loss of income to levels below which one can live on has spread from claimants to those whose living comes from the buy-to-rent sector, many who’ll still have mortgages. So punitive benefits can impoverish local providers? Many of them are surely Tory voters.

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