Highland Council chiefs attack 'flawed' Universial Credit

Debt racked up by people struggling to survive on the controversial new Universal Credit benefit system has rocketed to almost £1 million.

Highland Council chiefs have hit out at the UK Government for the "ludicrously flawed" welfare reform, which has left more than 1000 people struggling to survive, causing a backlog in income to the local authority as people are forced to choose between paying rent or eating.

Universal Credit replaces housing benefit, Jobseeker’s Allowance, employment and support allowance, income support, child tax credit and working tax credit and has come under fire for pushing people into poverty, caused by a range of problems including the complicated online application and a six-week benefits freeze, both for new applications and a reported change of circumstances.

"Live service" universal credit is currently applicable all over the Highlands and only applies to new claims but "full service", for all claimants, is currently being trialled in the Inverness Job Centre coverage area, which extends south to Kingussie and west to Drumnadrochit, Beauly and Wester Ross.

The full service is expected to be extended elsewhere in the Highlands later this year.

Since its introduction last year, when Highland was used as a guinea pig along with only a handful of other areas, Universal Credit has been blamed for the soaring debt owed to the council in unpaid rent.

Now 80 per cent of people on the new system have found themselves in arrears totalling £988,687 - a jump of almost £300,000 since December, when the figure was £704,000.

The average household claiming Universal Credit owes £953 but this almost doubles to £1700 for people living in temporary accommodation, 98 per cent of which are in debt.

The overall housing debt owed to the local authority has now reached £1.6 million and is expected to soar to £2 million by the end of the year.

Council leader Margaret Davidson has called for the roll out to be frozen until the problems can be resolved.

"The figures are truly shocking," she said.

"Welfare is getting squeezed all the time but we have some really good MPs who are fighting our corner at Westminster.

"We can’t have people coming out of temporary accommodation with thousands of pounds of debt that they can’t pay and forcing them to use food banks.

"I think the best we can ask for is a freeze and see how we can make this work better and stop penalising people. The welfare system does need reform but this is not the way to do it."

And council convener Bill Lobban pointed out many working people benefit from Universal Credit, particularly in the housing benefit and working tax credit aspects, and said the debt is the result of a "ludicrously flawed system" rather than the fault of claimants.

"It’s not about people abusing the money they get, although that is not to say there’s not a minority who do, it’s about a ludicrously flawed system," he said.

"You don’t need to be the brain of Britain to know this was going to happen. If your wee lassie needs a pair of shoes or a winter coat and it’s a choice between that and paying your rent, what do you do?

"Last week we had a meeting of the 20 richest countries in the world, one of them is us, yet we still have people living in abject poverty. There is something fundamentally wrong with that system."

And Councillor Lobban hopes the Conservatives losing their majority in last month’s election may make it easier to pressure the government to consider changing the system.

"We now have a UK Government that is precarious at best so we might be able to win one or two things," he said.

"If we can work with our MPs and get them to put pressure on the government we might be in with a chance."

Ian Blackford, SNP Westminster group leader and MP for Ross, Skye and Lochaber, agrees and said more MPs are speaking out against the issue as the new system is rolled out in their constituencies.

"I think it’s appalling that the Department for Work and Pensions (DWP) are pressing ahead with this," he said.

"It’s about time they seriously listen to the feedback they have been given and put this on hold until they can sort the problems.

"More and more MPs are becoming concerned about this and I think it will be raised in the coming weeks as people try to put pressure on the government."

But a spokeswoman from the DWP denied that universal credit is to blame for rent arrears.

"The reasons for rent arrears are complex and to link it to welfare reform is misleading," she said.

"Our research shows that the majority of universal credit claimants are comfortably managing their budgets and that after four months the proportion of claimants we surveyed, who were in arrears at the start of their claim, fell by a third."

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