Disturbing figures, following the introduction of Universal Credit in Crawley Borough which indicate that council rent arrears are increasing in Crawley, were revealed today by concerned Labour Borough councillors.
Leader of the council Peter Lamb and Cabinet Member for Housing Michael Jones, have spoken out, calling on the Government to stop the roll out of Universal Credit, and expressing concern that not only does the new benefit take money from many Crawley residents unfairly, but that collection problems for rent and council tax risk giving Crawley Borough Council future additional financial pressures, that could impact on services.
Figures from the Borough Council this week revealed that rent arrears of council tenants claiming Universal Credit had increased sharply since its introduction, backed by reports that council staff were having to spend hours assisting claimants with additional assistance if their claims proved to be particularly complicated, despite Government claims that the new benefit would streamline administration.
Universal Credit Full Service went live in Crawley on 6th June 2018. In October Crawley it was confirmed to councillors the Borough had verified 194 active UC cases.
Straight forward cases take approximately 45-60 minutes of council officer time. Complex cases, however, are forcing hard-pressed council staff to take up to 4-5 hours of officer time each, including having to make home visits and even accompanied visits to the Jobcentre to assist getting the claim into payment.
Arrears on the 194 active new UC cases have increased by £33,609 (up from £44,455 to £78,065), a significant increase. The council has confirmed they expect this trend to continue as a result of number of factors, including the DWP making all direct rent payments at the end of the month regardless of the agreed date the tenants are meant to pay.
The next phase of the roll out of Universal Credit will mean Crawley residents over the next 4 years currently claiming the benefits that Universal credit is replacing, such as Tax Credits and ESA, being required to claim Universal Credit instead.
Universal Credit has caused severe hardship for many people so far with long waits for initial payments leading to people building up debts, rent arrears or even being forced to turn to food banks for help.
Where there is no change in Crawley residents’ circumstances they will receive what is known as “Transitional Protection” which is an additional payment designed to ensure that they will not be worse off as a result of moving across to claim Universal Credit. However, that will only last for 2 years and could be lost due to even a small change in circumstances such as a couple moving in together, or separating.
The roll out of Universal Credit for new claimants has seen controversy over whether people who are required to transfer to Universal Credit during the next phase of the roll out will lose financially as a result. It was reported that the Work and Pensions Secretary had told Cabinet colleagues that families could lose up to £200 a month and there is anecdotal evidence from some residents that they are already worse off.
Figures from the Trussell Trust show that foodbank referrals have risen 52% in areas where Universal Credit has been rolled out over the previous 12 months, strongly suggesting that instead of lifting people out of poverty it is pushing them into it.
The DWP survey of full service claimants published in June showed nearly half of new Universal Credit claimants falling behind with bills and even six months later four in ten still struggling to cope financially.
Two former Prime Ministers, Gordon Brown and John Major, have warned of the impact of the roll out as the government prepares to start the next phase early next year.
Cllr Lamb (Lab, Northgate) said,
“Universal Credit is causing untold misery for Crawley residents, pushing many of those most in need of help into debt and poverty. Rather than going ahead with the full roll-out of a system which fails to achieve any of its objectives, the Government needs to look at the warning signs and listen to those on the ground who say all this will do is create further hardship for local people.”
Supporting Cllr Lamb’s comments, Cllr Jones (Lab, Bewbush) warned:
“The increasing rent arrears from tenants is clearly being made worse by the effects of Universal Credit, if this also translates into worse collection of council tax, which in my mind it undoubtedly will, this will all feed into Crawley Borough Council not having the money to pay for all the services it provides.
“And if Universal Credit is impacting on council rents like this, you can be assured that it is having just as much an impact on arrears in the private sector which will cause serious problems as well.
“Universal Credit is a vehicle for cuts and is causing severe hardship for many people as it is rolled out. It is leaving people in debt, rent arrears or forced to turn to food banks to survive. At the moment it is only new claimants who are being forced to take Universal Credit, but it may only be a matter of time before a lot more people are worse off from the way the Tories have pushed these unfair changes on to people.”