Local authorities are being forced to commit ‘valuable resources’ to tackling the effects of Universal Credit (UC), Labour says.
Freedom of Information requests from the opposition party have revealed councils are committing scarce funds towards preparing for the impact of UC over and above Discretionary Housing Payments provided by the Department for Work and Pensions.
The roll out of the new benefits system, which consolidates six benefit payments such as housing support into one, has been widely criticised - despite the Chancellor’s announcement last November of a £1.5bn support package to help address concerns about the welfare reforms.
One in-depth report by the Smith Institute published by Southwark Council, one of the first boroughs nationally to see the full roll out of UC, found delayed UC payments were pushing many into debt and rent arrears, causing considerable stress.
The report, which was published in conjunction with Croydon Council and Peabody, showed the average council rent account in Southwark sits at £8 in credit. However, for UC recipients, it’s about £1,178 in arrears.
Labour’s research reveals councils are having to provide additional rent arrears support and increase staffing as well as working with their local food banks and Citizens Advice to offset the impact of UC.
Newcastle City Council, for example, is spending nearly £400,000 of its own resources supporting UC claimants, almost a quarter of which comes from additional rent arrears support.
Tower Hamlets Council has set aside £5m over three years to help those affected by Universal Credit, while Barking and Dagenham is budgeting £50,000 to support UC claimants from January 2018.
‘Universal Credit is causing misery and hardship for thousands of families this Christmas, and councils are being expected to pick up the pieces,’ said Margaret Greenwood, Labour’s shadow minister for employment.
‘It’s clear councils are committing their own valuable resources from already-stretched budgets to offset the impact of Universal Credit and to prepare for the damage its roll out could cause.
‘This is yet more evidence that the Government should immediately pause the roll out of Universal Credit so its fundamental flaws can be fixed.’