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Benefits Councils picking up the tab for universal credit

Local authorities are using their own cash to cover shortfalls in flagship Tory scheme

COUNCILS are having to use their own cash to fix the damage caused by the introduction of universal credit (UC), Labour’s shadow employment minister Margaret Greenwood charged yesterday.

She said that local authorities are diverting funds to plug gaps in the government’s flagship benefit reform scheme.

Measures taken by councils include providing funds for tenants in rent arrears, hiring extra staff, as well as working with foodbanks and Citizens Advice to “offset the impact” of UC, according to responses to Freedom of Information requests submitted by the party.

Ms Greenwood says in a statement published today: “UC has been causing misery and hardship for thousands of families this Christmas and councils are being expected to pick up the pieces.

“It’s clear councils are committing their own valuable resources from already stretched budgets to offset the impact of UC and to prepare for the damage its roll-out could cause.

“This is yet more evidence that the government should immediately pause the roll-out of UC so its fundamental flaws can be fixed.”

Some authorities are having to spend sums over and above the usual discretionary housing payments provided by the Department for Work and Pensions (DWP), according to Ms Greenwood.

The London borough of Tower Hamlets has set aside £5 million over three years to help those affected by UC.

Gateshead Housing Company, which manages Gateshead Council’s housing stock, is planning to spend an estimated £90,000 in 2017/18 and £270,000 in 2018/19 on extra staff to support UC claimants and help prevent rent arrears, Labour said.

And Newcastle City Council is spending nearly £400,000 of its own cash to support UC claimants, with non-collection of rent as a result of the new scheme, in which all benefit payments are rolled into one lump sum, is more than £1.2 million from among its 27,000 tenants.

Claimants who fall under the new scheme now receive housing benefit in their bank accounts rather than the amount being paid directly to landlords as previously.

A DWP spokesman said: “Councils have been providing welfare advice and housing payment top-ups as standard since long before the introduction of universal credit.

“Universal credit lies at the heart of our commitment to help people improve their lives and raise their incomes.

“It provides additional tailored support to help people move into work and stop claiming benefits altogether.

“The majority of claimants are comfortable managing their money, but advances are available for anyone who needs extra help and arrangements can be made to pay rent direct to landlords if needed.”

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