Peterborough social housing tenants buried in debt by Universal Credit, investigation reveals

Social housing tenants in receipt of Universal Credit are being buried by thousands of pounds worth of debt, the Peterborough Telegraph can reveal.

Saturday, 1st June 2019, 1:00 pm
Universal Credit in Crisis: a JPIMedia investigation

Peterborough households on the controversial benefits system who live in accommodation provided by the city’s largest housing association, Cross Keys Homes, are a combined £801,000 in arrears.

This means 1,132 families owe on average more than £700 each.

The latest figures show 8,808 people in Peterborough are on Universal Credit, meaning the true scale of the debt across the city will be much higher.

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The figures form part of a wider investigation put together by JPIMedia, publishers of the PT.

The Universal Credit in Crisis investigation has revealed that half a million callers to the Government’s Universal Credit helpline gave up before getting through in the first three months of this year, a greater number than in the whole of 2017.

Moreover, on average, council tenants on Universal Credit who have fallen behind with their rent owe on average £681, more than twice the amount of those on the old housing benefit system.

And figures obtained from councils indicate the cost to local authorities of unpaid council tax from Universal Credit claimants could amount to more than £130 million a year.

Universal Credit (UC) was fully rolled out in Peterborough in November 2017.

It was meant to save money and simplify the welfare system by replacing six benefits for unemployed people, or those on low incomes, with one monthly payment.

But it has faced repeated criticism for leaving many claimants worse off than under legacy benefits, and for an error-prone system that can drive some to the brink of destitution.

So far only new benefit claimants, or those whose circumstances have changed, have been placed on UC - amounting to some 1.8 million people.

Now the second phase - moving over three million people on legacy benefits - is set to begin in July.

Peterborough City Council said the new benefits system has cost it an estimated £100,608 due to “implementing changes in welfare benefits”.

The authority has seen the number of households presenting themselves as homeless rise from 1,504 in 2017/18 to 2,355 in 2018/19, with the number of households in temporary accommodation rising from 335 in April 2018 to 349 in April 2019.

Council leader Cllr John Holdich said: “We know that some landlords feel they have been left with no option but to seek possession of their properties using Section 21 notices. The reasons for this are varied, but do include uncertainties around Universal Credit.

“We continue to work with our landlords where possible to assist in resolving issues with rent arrears, and have supported a number of cases in order to prevent eviction.

“Landlords who have a tenant who is experiencing issues with paying their rent and are thinking about using a Section 21 notice to seek possession should contact us in the first instance to see if we can provide an alternative option.”

A spokesperson from Cross Keys Homes said: “Universal Credit has been in place for just over 18 months and during this time it has been clear that some people have been more ready for the switch over than others.

“Recently we have seen average rent arrears per household reduce thanks to our great joint work with the local DWP to ensure tenants are advised they must use their housing cost element to prioritise rent payments.

“Our Income Management team have been intensively trained to recognise where additional advice and guidance may be required, and we’ve also recently launched our new ‘Money Advice Service’ to further support tenants who are struggling with the impact the change can have on their finances.

“Eviction is always a last resort for CKH. However, not paying rent is the biggest risk to anyone’s home. Not paying, or not making any effort to work with us to make payments, will certainly lead to legal action.”

Sandie Burns, CEO of Disability Peterborough, said people being moved onto UC are being re-assessed to see if they are fit for work.

She added: “Our senior welfare benefits worker Jane says that she has seen this reflected with disabled people in Peterborough and the case work for appeals has dramatically risen. If disabled people have incomes cut then they have less to spend on essentials such as rent, food and utilities.”

The DWP has insisted UC is a “force for good, providing support to more than 1.8 million people”.

It said it had made various changes to UC to prevent people going into rent arrears, such as paying rent directly to landlords where requested.

And it said it regularly reviews staffing levels on its helpline “to ensure we have the right number of people available to answer calls”.

A spokesman added: “Universal Credit gives people control over their finances and helps them into work.”