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Rent arrears double in areas piloting Universal Credit – BBC report

by: Mortgage Solutions
  • 12/11/2018
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Rent arrears double in areas piloting Universal Credit – BBC report
Council tenants on universal credit have on average more than double the rent arrears of those still on housing benefit, a BBC Panorama programme airing tonight has found.

A BBC report confirmed that in Flintshire, north Wales, one of the first counties to test the new payment, rent arrears have gone up by £1m in the 18 months since it was introduced.

However, the UK government said it had listened to concerns and universal credit was ‘working well’.

The BBC contacted every local authority in the UK on arrears levels and the results from 129 councils suggest the amount owed by tenants claiming universal credit across the UK is £662.56 against £262.50 for those still on housing benefit.

Flintshire council said that tenants on universal credit in the county owe on average four times as much rent as those on the old benefits, but down from six times as much in September.

Universal credit, which had cross-party support when it was first proposed, brings together six benefits, including job seekers allowance, child tax credits and, crucially, housing benefit, into one payment.

 

Online confusion and delayed payments

 

However, many of the problems stem from the fact, to mirror a salary, it is paid once a month in arrears.

Some claimants told the BBC it is the delay in payment, combined with confusion over the online application process, that has seen families left with no income for weeks, forced to turn to food banks and choose between paying bills or paying their rent.

Universal credit was rolled out to job centres in Flintshire in April 2017, meaning the local authority is ahead of much of the UK. Eighteen months on, 23% of benefit claimants are now on universal credit in Flintshire, compared with about 10% nationally.

Currently one million people across the UK claim the new benefit, a figure that will eventually rise to eight million. The BBC said experts and council chiefs are expressing alarm.

Neal Cockerton, head of housing at Flintshire council said Universal Credit has created the double problem of potential evictions and a growing hole in the council’s finances.

In 2017 the authority’s rent arrears stood at £1.6m, whereas that figure is now more than £2m. Evictions have increased by 55% compared to the same time last year.

“We do undertake a lot of intensive support before we get to that stage (eviction), but there is a degree of inevitability,” he said.

The government has given them more funding to offset this, but the council said not only is it not enough, it is stopping in April 2019.

Universal credit ‘is working well’

The government has delayed migrating the majority of claimants over to universal credit for another year, as well as announcing more money for improvements to the system.

Employment minister Alok Sharma said the new benefit is working and claimed the rise in rent arrears is only temporary.

He said: “Universal credit is working well. What we have is a system which is simpler, a system which people understand and ultimately makes sure they get into work faster and stay in work longer.”

BBC Panorama’s The Universal Credit Crisis airs tonight 19:30. (Wales Investigates, BBC One Wales at 21.30)

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