Universal Credit Must be Paused

This month, Universal Credit (UC) is being rolled out in full across Rutherglen and Hamilton West.  The Government’s stated aim is to make work pay and to simplify the benefits system by bringing 6 benefits under one umbrella with one monthly payment.

It is a reasonable ambition – the UK’s social security system is notoriously complicated and difficult to navigate – unfortunately, experience in areas that already have UC shows that the new simplified system is not fit for purpose.

Part of the problem is that UC is paid in arrears which means, if everything goes to plan, people can expect to wait 6 weeks before receiving payment with 1 in 5 claimants who run into issues with the application process waiting even longer.

Meanwhile, claimants have household bills to pay and, unlike Housing Benefit which is paid directly to the council, the housing element of Universal Credit is paid to the claimant meaning many council tenants will immediately find themselves in rent arrears.  Over half of new claimants helped by Citizens Advice have had to borrow money while waiting on Universal Credit Payments.

The Convention of Scottish Local Authorities (COSLA) recently suggested the level of rent arrears among those receiving Universal Credit may be at least 2.5 times higher than for those who receive Housing Benefit. The Government has known about these issues for years.

Housing associations, charities, and councils like South Lanarkshire have been voicing concerns about people being forced into rent arrears and debt since the first pilot schemes were launched.

On the 5th of October 2015, Universal Credit was first launched in South Lanarkshire with newly unemployed single people required to make claims for benefits under the new system.  By the end of that year, almost 48% of council tenants in receipt of Universal Credit were in arrears with a total of £65,000 outstanding.

The Government recently tried to address this issue with the introduction of Advance Payments but this is a loan that must be paid back and it does not cover a full Universal Credit payment.  The high take-up rate of Advance Payments illustrates the fact that the system is fundamentally flawed and people cannot cope with the long delay.

To make matters worse, the government expects new claimants to apply online, those who need to contact the helpline may find themselves paying up to 55p per minute and, those who wish to visit their local Job Centre in person, may find it is one of the 68 nationwide that have been earmarked for closure.

It is a system stacked against those who need a bit of extra support to get by.  For them, living in Tory Britain is like being on a treadmill while the government increases the speed, constantly having to run faster just to stand still.   Every delay or diversion will force more people in Rutherglen and Hamilton West into debt and poverty.

That is why, in this week’s Opposition Day Debate, I will back Labour’s calls for an immediate halt to the roll out of Universal Credit.