Peterborough Universal Credit claimants pushed into £5,000 debt arrears, new report claims

Peterborough residents receiving Universal Credit have been pushed into debt, with some claiming they are in arrears of more than £5,000.

Monday, 21st January 2019, 5:00 am
Updated Thursday, 7th February 2019, 6:07 pm

A report co-authored by staff at University Centre Peterborough shows that 72 of the 90 claimants surveyed have been pushed into debt, with more than 40 per cent claiming their arrears are at least £5,000.

The full report is due out soon, but preliminary findings have been released to the Peterborough Telegraph.

The findings reveal that:

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The job centre in Peterborough
The job centre in Peterborough

. 54 per cent of claimants reported waiting at least eight weeks for their first payment

. Claimants responded to the loss of income by borrowing from friends and family, running up bank overdrafts and credit card debts and borrowing from payday or doorstep lenders

. 18 per cent of people surveyed were turning to food banks

. 50 per cent of respondents with a health condition reported not being able to afford day-to-day essentials.

Dr Tim Hall, academic lead for arts, humanities and social science at University Centre Peterborough, said: “Our findings were very much in line with the findings of reports commissioned by other charities working at a national level - people struggling to apply for the benefit and then struggling to survive on it on a day-to-day basis.

“We found no evidence that the reform was encouraging people back into work, a claim questioned in reports by the Institute for Fiscal Studies and the Resolution Foundation.

“For all the problems reported with Universal Credit the Government seem determined to plough on with it. I hope, however, that we can start to realise - in the era of the gig economy and zero-hour contracts - that it is not wholly the fault of the individual if they are unemployed or under-employed.”

Universal Credit (UC) brings together six different benefits into a single monthly payment.

It began being fully rolled out in Peterborough in November 2017, and more than 8,000 people are currently on it.

One couple affected by moving onto UC were Amanda Plowman and her army veteran husband Bryan who said they were receiving nearly £500 less a month after being switched across to UC in October. This saw them quickly build up more than £900 in rent arrears.

The couple’s landlords are now seeking possession of their home in Hampton.

Disability Peterborough said its research showed that a severely disabled couple who begin receiving UC could be up to £8,000 worse off than under the previous system, although there would be some winners.

The research does not include existing benefit claimants who have already been switched over to UC.

North West Cambridgeshire MP Shailesh Vara said: “Clearly there have been some difficulties with the introduction of Universal Credit and the Government has listened.

“In the Autumn Budget the Chancellor announced a £4.5 billion package for Universal Credit, and more recently a number of changes to the system have been announced by Amber Rudd, the Work and Pensions Secretary.

“This should go some way to helping those who are experiencing difficulties, as changes are introduced.”

MP for Peterborough Fiona Onasanya said: “The reality is that in its current state it is less Universal Credit and more universal crisis. Disabled people are disproportionately impacted and families are being pushed into poverty, rent arrears and food banks.

“These initial findings of the report come as no surprise because constituents have explained to me that they are always on the back foot. Many of them are in arrears on electricity and gas bills; many feel that leading questions have been asked and wrong decisions have been made on claims; and many do not have working fridges or food to eat.”

Peterborough City Council said in a report it was expecting an increase in homeless presentations because of the roll-out of UC. A spokesman said: “We would encourage anyone who has got into housing difficulties as a result of Universal Credit to contact our housing team at the earliest opportunity on 01733 864064 or email [email protected]