Minister finds that Universal Credit is not really universally loved...
PROBE IS ON BY THE DWP INTO EFFECT OF THE NEW BENEFIT
Political Editor UNDER fire Housing Minister Caroline Dinenage has admitted an investigation is finally underway into whether Universal Credit is plunging claimants into rent arrears.
It follows reports the new benefit system led to arrears of £1.1m among Newcastle tenants.
Ms Dinenage revealed the Department of Work and Pensions had launched an inquiry “to investigate the reality of rent arrears in Universal Credit”, as she answered questions in the Commons from Gateshead MP Ian Mearns.
But she appeared to suggest reports about the impact of Universal Credit have been exaggerated, telling Mr Mearns: “We have to be careful not to scaremonger on this issue.”
Newcastle was the first city to have Universal Credit, and the body which manages the city’s council houses said in September Universal Credit claimants were more than £1m in arrears on their rent.
It’s said to be a result of claimants waiting weeks before they get their first payment. The Government said monthly payments reflect the way many people are paid.
Universal Credit combines existing benefits such as tax credits, housing benefit, income support, Jobseeker’s Allowance, and employment and support allowance.
Ms Dinenage told the Commons: “The Department for Work and Pensions is currently undertaking work to investigate the reality of rent arrears in Universal Credit.
“It aims to understand the true level of rent arrears for tenants, what is causing them, and any impacts Universal Credit may be having.”
But she rejected claims by Mr Mearns the new benefit had caused arrears in Yorkshire and the North West.
Mr Mearns asked: “I wonder whether it would be of any surprise to her that the chief executive of a large housing authority in the North East of England recently told me that the authority had arrears of more than £2m from universal credit alone.
“Claimants in one authority in Yorkshire and Humber have average arrears of more than £1,100 each. Why is that happening and what is she going to do about it?”
She told him: “We have to be careful not to scaremonger on this issue. A National Federation of Arm’s Length Management Organisations report says that three quarters of tenants who started to claim universal credit were already in arrears, and research shows that after four months the number of claimants in arrears has fallen by a third.”
Work and Pensions Secretary David Gauke said Universal Credit was help- ing people into work, partly because it is not immediately cut off when they find employment. He said: “Universal credit is helping people to get into work and to progress in work. “It is also clear that people on universal credit are spending more time looking for work than those on legacy benefits. “It is really important that we all work to ensure the success of Universal Credit. We believe it will result in 250,000 more jobs - something worth achieving.” Newcastle is not alone in reporting an increase in arrears. Southwark Council reported in September rent arrears have gone up by £1.3m since universal credit was introduced. Figures obtained under the Freedom of Information Act in September showed half of council tenants who receive Universal Credit instead of housing benefit, across 105 local authorities, are at least a month behind on their rent.
Claimants in one authority have arrears of £1,100, why is that and what’s she going to do about it Labour’s Ian Mearns
Minister Caroline Dinenage