Universal Credit pilot sees tenants plunge into arrears

Tenants have been plunged into rent arrears after the introduction of a controversial new welfare regime '“ and now council bosses are asking the UK Government for compensation.

Monday, 19th December 2016, 8:51 am
Updated Thursday, 29th December 2016, 2:03 pm
Tenants have been plunged into rent arrears.

Musselburgh was chosen as the first area in Scotland to pilot the full digital roll-out of the new Universal Credit (UC), which replaces six other benefits and was intended to simplify the system but has been criticised for making it more complex.

And a report by East Lothian Council reveals a 22 per cent increase in rent arrears among UC claimants in just three months, with the average amount owed almost £900.

The report says the way the system is being managed by the Department of Work and Pensions (DWP) is causing “major concern”.

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And it recommends the council should seek “financial recompense from the UK Government for the loss of council tax and council house rent income as a result of UC”.

Council leader Willie Innes said: “Almost from the start of the new system we became aware of delays being experienced by claimants. The length of time some people were left waiting for payments meant they were experiencing considerable financial hardships.

“The council had established key teams of staff to help advise on the new system but the delayed payments to tenants has also resulted in delayed rent and council tax payments.

“As the introduction of Universal Credit has resulted in significant loss of income to the council we are seeking financial recompense from the UK Government. We are also asking the Scottish Government to take immediate steps to use its powers to have the housing cost element of Universal Credit paid directly to landlords.”

Lothian Green MSP Alison Johnstone said the roll-out of Universal Credit was clearly causing serious problems.

“This is affecting vulnerable people and putting a huge strain on council staff. We need to see some compassion from the UK Government who are driving these ill-considered changes.

“The DWP must improve their systems as there is very little confidence left in Universal Credit.”

Musselburgh Citizens Advice Bureau said its staff were stretched to the limit. “We now have a 3 week waiting time for an appointment with a benefits specialist where previously a client could be seen within the week.”

A DWP spokesman said: “The reasons for rent arrears are complex and to link it to welfare reform is misleading.

“We work closely with 
local authorities, including 
East Lothian Council to ensure that claimants are fully 
supported and rent can be 
paid directly to landlords for people who need extra support.”