Naomi Larsson 15 July 2019

Universal Credit draining council resources

Universal Credit draining council resources image

Universal Credit (UC) is draining resources from councils, a new survey has found.

Households on the new benefit are significantly more likely to have housing debt than those on housing benefit, but the survey found the figures would be far worse if local authorities were not filling the gaps with their own resources.

Research from the National Federation of ALMOs (Arms-Length Management Organisations) and the Association of Retained Council Housing showed members were subsidising UC by bringing on extra staff or introducing new IT systems to cope with the problems caused by the welfare changes.

The Chartered Institute of Housing’s chief executive, Terrie Alafat, said: ‘Far from supporting people into work, [UC] is leaving some of the poorest people having to choose between rent and food, and the burden is falling on already hard-pressed councils and their not-for-profit housing companies.

‘These councils are doing great work despite the obstacles the system places in their way.

'It’s time for the Government to review the impact of UC.’

Out of 39 organisations managing 500,000 properties, 67% of households on UC were in arrears, owing an average of £564 or about seven weeks’ rent.

The report said there has been a gradual reduction in arrears due to local authorities and ALMOs’ investment of resources to limit the impact on tenants.

The National Federation of ALMOs’ policy director, Chloe Fletcher, said: ‘Councils and their management companies have had to innovate to make sure arrears don’t escalate and tenants are able to keep their homes when they move onto the new benefit system.

‘This level of intense support from social landlords just isn’t sustainable.

'Council housing budgets are already under enough pressure from the cuts in rental income imposed upon them by Government for the past four years.

'We are calling for Government to both improve the way it administers UC and to fund social housing organisations to provide the support tenants need during the transition to UC.’

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