MSPs call for Universal Credit reform as claimants rack up rent arrears

A Scottish Parliament committee has called for the urgent reform of Universal Credit (UC) after an “alarming” number of tenants who rely on the controversial benefit fell into significant rent arrears.

Work and Pensions secretary Amber Rudd giving a speech in Janaury when she announced that controversial plans to retrospectively extend the two-child benefit cap to new Universal Credit claimants would be scrapped

MSPs on Holyrood’s social security committee have recommended the Department for Work and Pensions (DWP) pay the housing element of UC directly to landlords as a default and claim the minimum five-week delay for tenants receiving their first UC payment must change to help combat rent arrears.

The committee’s report reaches similar conclusions to a major investigation undertaken by The Scotsman and its sister titles across JPI Media last month, which revealed that cash-strapped local authorities across Scotland are owed more than £20 million in rent arrears as UC claimants struggle to adapt to the new welfare system.

Councils north of the Border are owed a combined total of £21,900,988 in rent arrears, from more than 34,000 tenants who rely on UC.

As rent arrears are debt, they are, in theory, recoverable. But in reality many councils are already struggling to recoup them.

Local authorities, who administered housing benefit before UK government welfare reforms, previously had the power to negotiate directly with tenants who had fallen behind with their rent.

But that ability was removed by the introduction of UC, which sees claimants given a lump sum payment instead of several individual benefits.

The Holyrood report published today also raises concerns over the cost and condition of temporary accommodation, with MSPs calling for housing benefit in this area to be devolved to help address issues of homelessness and rough sleeping.

SNP MSP Bob Doris, the social security committee convener, said: “The rapid increase in rent arrears since the introduction of Universal Credit is unacceptable. The UK government must take immediate steps to tackle this issue, which is costing local authorities and social landlords critical money at a time when budgets are already stretched.

“We want to see the housing element of Universal Credit paid directly to landlords and the DWP must review the minimum five-week wait for new UC claimants, both of which contribute to rising arrears.”

The DWP has previously claimed that it was wrong to blame Universal Credit for rising rent arrears, as many people begin to claim UC after “a significant life event” and join the scheme with pre-existing arrears.