Rent arrears soar after reform of welfare system

Rent arrears soar after reform of welfare system
Rent arrears soar after reform of welfare system

THE controversial new benefits system Universal Credit has sparked a 20 per cent rise in rent arrears from a council’s tenants in just three months since it was introduced, a report has found.

A study by East Lothian Council found the welfare fund for the unemployed or those who need help paying for housing is forcing claimants into debt, to foodbanks and is damaging the council’s finances.

It claims the benefits system is causing “major concern”.

Since the introduction of full Universal Credit in the area, rent arrears have risen by £242,000, the report says.

The net year on year increase, calculated at 12 per cent, or £157,000 has almost entirely wiped out the council’s success in reducing rent arrears in since 2014, it adds.

Additional time spent by staff in dealing with the impact of the new benefit is costed at nearly £8,000 and average rent arrears stands at £898.89, compared with £589.49 for those not yet on the benefit.

Key impacts have included additional demand for crisis grants and an increase in referral to food banks.

The report says claimants are experiencing lengthy delays.

“Inefficient Department of Work and Pensions (DWP) processes and poor communication with council officers, coupled with the lengthy delays experienced by claimants [are] causing significant pressure on council services and stress and financial hardship for claimants,” it said.

The council’s depute chief executive Alex McCrorie demanded the DWP carry out an urgent investigation into the impact of Universal Credit in the area, while also calling on the Scottish Government to use new powers over welfare to help.

The concerns were highlighted at Holyrood’s Social Security Committee yesterday by MSP Alison Johnstone, social security spokeswoman for the Scottish Greens. She said problems included delays, errors and missing documentation.

She added: “This is affecting vulnerable people and putting a huge strain on council staff. We need to see some compassion from the UK Government, which is driving these ill-considered changes. There is very little confidence left.”

East Lothian Council leader Willie Innes said there had been delays experienced by claimants “almost from the start of the new system” causing some to face “considerable financial hardships”.

A spokesman for Musselburgh Citizens Advice Bureau said: “Our staff are also stretched to the limit and we now have a three-week waiting time for an appointment with a benefits specialist.”

A DWP spokeswoman said: “The reasons for rent arrears are complex and to link it to welfare reform is misleading. Universal Credit is transforming lives, with people moving into work faster and staying in work longer than under the previous system.”

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