Councils ‘diverting funds to support Universal Credit claimants’

Posted On: 
29th December 2017

Councils are being forced to divert resources into supporting Universal Credit claimants, Labour has revealed. 

The Department for Work and Pensions is pressing ahead with the rollout of the Government's flagship welfare reform, Universal Credit
Credit: 
PA

Freedom of Information requests submitted by the party reveal that local authority cash is being used to help those moving onto the new benefit with rent arrears and other issues.

It comes as landlords warn they are still unsure about renting property to Universal Credit claimants for fear they might not get their rent.

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In a major climbdown last year Chancellor Philip Hammond reduced the waiting time for new claimants to receive their first payment - but Labour says it was not enough.

According to the findings, Newcastle city council has spent £390,000 supporting claimants, while Liverpool city council said it had put £175,000 from its local welfare provision into the new benefit.

Altogether, 26 councils across the UK said they had set aside extra cash or were expecting increased demand for support as part of the rollout of the Tories’ flagship welfare reform.

Shadow Employment Minister Margaret Greenwood said: “Universal credit is causing misery and hardship for thousands of families this Christmas and councils are being expected to pick up the pieces.

“This is yet more evidence that the Government should immediately pause the roll out of Universal Credit so its fundamental flaws can be fixed.”

But a DWP spokesman said: “Councils have been providing welfare advice and housing payment top-ups as standard, since long before the introduction of Universal Credit.

“The majority of claimants are comfortable managing their money but advances are available for anyone who needs extra help, and arrangements can be made to pay rent direct to landlords if needed.”

LANDLORDS PILE IN

Meanwhile, the Residential Landlords Association (RLA) said landlords were still wary of renting to tenants receiving Universal Credit despite government attempts to make sure they get their rent.

Some 73% of landlords are unlikely to rent homes to someone claiming Universal Credit as they are worried tenants will not be able to pay, the RLA said.

An Alternative Payment Arrangements scheme was designed to allow the Government to send overdue rent directly to landlords out of the claimants benefits.

But the RLA said it has had complaints from landlords who are having little success despite the security scheme.

A DWP spokesperson said: “Landlords can now apply to have rent paid directly to them if their tenants are more than two months in arrears.

“The majority of claimants are comfortable managing their money but we are increasing support to help people who need it to stay on top of their payments.

"From April, people in receipt of Housing Benefit will receive two weeks’ rent when they move onto Universal Credit.”