Universal Credit flaws throwing thousands into rent arrears, poverty and misery

Family debt anguish

Calls for Universal Credit rollout to be slowed down 

8th February 2017 by Robert Armour 0 Comments

Universal Credit (UC) is fatally flawed with an overhaul of the system essential to avoid thousands of claimants being evicted and forced further into an endless cycle of poverty.

The situation has become so serious that many claimants on the new scheme are turning to loan sharks because they can’t afford even the most basic essentials to live.

That is the warning from an influential group landlords and politicians in England who are urging the government to slow down the national rollout and to increase support for vulnerable claimants who are struggling to cope with the demands of monthly payments and an online-only system.

The National Federation of Almos (NFA), which represents arm’s length organisations running council housing, and the Association of Retained Council Housing, said problems have noticeably worsened over the last few months and is calling for a further slow down of the rollout or a complete halt.  

It comes as the UK Parliament’s work and pensions committee will challenge the architect of UC, Lord Freud, today (8 February).

Universal Credit is being rolled out across the UK on what appears to be an ad hoc basis. The system brings together six benefits into one monthly payment with housing costs no longer going directly to landlords but the claimant instead.

It means hard-up claimants often spend their rent money, forcing landlords to evict them and pushing them into a desperate cycle of poverty.

But its progress has been beset by IT failures and concerns over its complexity. Ministers have already slowed the pace of the rollout, which is now scheduled to be completed in 2022.

Clearly, there are some basic features of its design - Frank Field

Chloe Fletcher, the NFA’s policy director, said: “Our members are reporting households being forced to turn to foodbanks, payday lenders and, alarmingly, loan sharks just to get by. This is storing up long-term financial problems for these families.”

Some 430,000 people are on UC and this figure will grow to seven million when rollout is complete.

However the Scottish Government has already said it will make changes to the system, promising fortnightly payments and allowing claimants to have their rent paid directly to landlords - changes campigners say should be introduced aross the UC system. 

Labour MP Frank Field, who chairs the work and pensions committee committee, said: “Clearly, there are some basic features of its design – the initial six-week wait for a first payment, or the monthly lump sums thereafter that are paid directly to tenants, for example – that give Universal Credit the unintended effect of pushing some poorer households towards the twin horrors of eviction and homelessness.”