Deputy Leader calls for pause in Universal Credit or risk escalating rise in rent arrears, debt and homelessness

On the Eve of the Parliamentary vote on Universal Credit, Nottingham City Council Deputy Leader, Councillor Graham Chapman has called on the Government to halt the full introduction of Universal Credit in Nottingham until the faults in the system are sorted out.

Most recent figures show that In Nottingham, since its introduction for simpler cases on a limited basis in February 2016, there are currently 2,700 people – mainly single people – on Universal Credit of which around a quarter are in work. A major concern is that this has already resulted in rocketing rent arrears and debt levels for some of those on the scheme.

With the commencement of the full roll-out in the City in June 2018 – which will be for more complex cases including families with children, people with health conditions and those in work – It is estimated that in Nottingham, up to 4,800 households would move onto Universal Credit in the first year.

Ultimately, the people likely to be most affected are disabled people including those with mental health problems, those in low-paid work particularly those with little or no savings and children.

Amongst the principles of Universal Credit, claimants must wait for at least 6 weeks before receiving any money. Additionally, support they receive for housing, which was previously paid directly to landlords, is now passed directly to claimants introducing additional complexity into the system.

Claimants have the option of applying for a loan during the 6-week wait via an Advance Payment, but this represents additional debt and comes with a short repayment period, which can place major stress on already tight finances for many claimants.

Councillor Chapman is highlighting the following measures that he believes must be addressed by the Government before Universal Credit is fully rolled out in Nottingham:

  • Restore the principle of paying housing rent directly to Landlords. The current position is driving a rise in rent arrears and costs through additional bureaucracy. This in turn will potentially increase homelessness and restrict the ability of social landlords to build more badly needed council housing.
  • Reduce the 6-week wait for the first payment, which is leaving significant numbers of people without money for basic essentials like food and housing.
  • Look again at the need for the 7 day waiting period at the start of a claim
  • Sort out the major problems in the system administration, which requires repeated calls from claimants to resolve problems and poor assessments by people without medical qualifications.

Universal Credit – designed to bring together six different benefits into a single monthly payment – is set for full introduction in Nottingham in June 2018. Research has established that Universal Credit will eventually reach more than one in four working-age households and families of which more than half of these will be in work.

Councillor Chapman says: “In principle, the basic idea of Universal Credit makes sense but the way the Government is implementing it is chaotic and at times simply cruel.

“We’ve only had a limited experience of Universal Credit so far in Nottingham but we’re already seeing rent arrears rising along with more debt problems.

“The Government needs to see sense and pause the full introduction of Universal Credit in Nottingham until the problems with the 6-week wait and the way rent is paid are sorted out.

Otherwise we will see more homelessness, more families in serious debt and more children in poverty next year”.

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