Concerns about the Universal Credit system from councils, charities and landlords have been detailed in a document given to the government enquiry into the programme.
The Universal Credit system of benefits is due to be rolled out in weeks, and concerns are mounting that the new system is leading to increased rent arrears for tenants.
Following the survey reported this week from the Residential Landlord Association that showed 38 per cent of private landlords experiencing the issue of tenants going into arrears, many councils and charities have also voiced concerns about the Universal Credit system.
Three London councils whose tenants have already been moved on to universal credit said they had built up about £8 million in rent arrears. Croydon, Hounslow and Southwark said that more than 2,500 tenants claiming it were now at risk of eviction.
Data from the Freedom of Information Act has shown that half of all council tenants across 105 local authorities who receive the housing element of Universal Credit are at least a month behind on their rent, with 30 per cent two months behind.
Furthermore, London Councils, the body that represents the capital’s 32 boroughs and the City of London, stated that the new system ‘places both claimants and local authorities in a position of financial insecurity’. It confirmed that areas that have implemented the Universal Credit system had seen ‘a dramatic decrease in rent collection with many tenants immediately falling into rent arrears’.
Many social housing suppliers have also voiced concerns about Universal Credit.
Plymouth Community Homes, with over 14,000 social rented homes, confirmed that 69 per cent of tenants on Universal Credit were in arrears, compared with just 29 per cent of tenants overall.
Islington Council confirmed even worse figures, with 81 per cent of its Universal Credit claimants in arrears, compared to 29 per cent across all its tenants.
However, the government do not seem to be accepting the concerns. A DWP spokeswoman said: ‘Universal Credit is getting more people into work than the old system. It mirrors the way most people in work are paid, helping to ease the transition into employment.’
She continued: ‘The majority of claimants are comfortable managing their budgets, and for people who need extra support, advance payments are available.’