Universal Credit: worry, arrears and ‘desperate stories’ emerge from London roll out

by Dave Hill

Not enough attention has been paid to the Smith Institute‘s recent study of the effects of the government’s Universal Credit policy on social housing tenants in parts of London. It underlines how the early roll out of the system has been, in the words of Southwark Council cabinet member Fiona Colley, “affecting the poorest and most vulnerable people in our borough” and has “the potential to be catastrophic” for individuals and for the finances of councils everywhere.

The report, which Southwark commissioned in partnership with Croydon Council and the Peabody and Family Mosaic housing associations (now merged), examined the rent accounts of 775 tenants moving into Universal Credit and compared them with those of 249 still receiving housing benefit in the conventional way.

Among those who switched to Universal Credit it found a rapid accumulation of rent arrears – an average of £115 per claimant, £89,000 in all – over the period from October 2016 to the end of March 2017. These built up most quickly in the first few weeks before eventually starting to be cleared, which was often a struggle for those concerned. Also, initial overpayments to catch up with the arrears tended to tail off. It helped if tenants and landlords found alternative arrangements for clearing rent backlogs, though this was among the issues that could make administering the system more expensive for landlords.

The second part of the research was conducted for the Smith Institute by Britain Thinks, experts in researching public opinion. It involved in-depth phone interviews and focus group sessions primarily with Southwark tenants who were claiming Universal Credit or in the process of doing so. From these were gleaned insights into people’s feelings about the system and how it had changed their behaviour.

This research wasn’t done on a big scale and so, as Britain Thinks itself stresses, the people spoken to cannot be taken as representative of all Southwark tenants affected. Even so, its outcomes are striking.

There was a lot of negativity associated with the transition to the new system, especially the delay in payments. Being behind with the rent caused lots of worry, and a strong aversion to debt led many people to rely on family and friends for money (which wasn’t an option for everyone). Many found Universal Credit inflexible and difficult and struggled to manage on a single payment, in some cases because it just wasn’t enough. Many “desperate personal stories” were told.

Tentative conclusions included that the principle of moving onto Universal Credit wasn’t as big an issue as the transition to it and that housing officers can do a lot to ease the situation, but this has increased their workloads and put greater strain on council resources.

Read the whole of the report, entitled Safe As Houses, via here

 

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