Cash-strapped local authorities across Scotland are owed more than £20 million in rent arrears as Universal Credit claimants struggle to adapt to the UK Government’s controversial new welfare system.
With just weeks until the benefit is rolled-out to even more people across the UK, The Scotsman can reveal it is pushing an ever-growing number of Scots into deep rent arrears.
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 Universal Credit.
The figures, obtained through Freedom of Information, cover 24 of 32 local authorities which still directly manage social housing in their area.
Rob Gowans, from Citizens Advice Scotland, said: “If arrears keep increasing it will put a lot of pressure on the finances of local authorities. We don’t know how long term they will be able to manage this.”
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 Universal Credit, which sees claimants given a lump sum payment instead of several individual benefits.
Now councils must complete a lengthy process with the Department for Work and Pensions (DWP), which could eventually lead to an individual’s benefits cut to pay some of the arrears back.
Across the UK, Universal Credit claimants owe £681 on average in rent arrears – more than twice the amount of people on housing benefit.
Universal Credit was meant to save money, but has faced repeated criticism for leaving many claimants worse off than under legacy benefits and for an error-prone system that can drive some to the brink of destitution.
Cosla, the national association of local authorities in Scotland, said it had tracked the sharp increase in arrears.
“We are concerned about the impact of Universal Credit on rent arrears, debt and hardship for claimants,” a spokeswoman said.
“Councils are experiencing sharp increases in administrative and support costs as a result of this policy.”
Shirley-Anne Somerville, the Scottish Government’s Cabinet secretary for social security, said: “While Universal Credit is reserved to the UK Government, Scottish ministers have used their limited powers in this area to enable people to pay their housing costs directly to landlords, which should help prevent or reduce rent arrears and eviction proceedings.
“We have also provided people who receive Universal Credit with choices on the frequency of their payments and have committed to introducing split payments of the Universal Credit award in Scotland to ensure everyone has access to an independent income.”
The DWP said it was wrong to blame Universal Credit for rent arrears.
“We completely disagree with this analysis, which compares fundamentally different claimant groups,” a spokeswoman said.
“Many people claim Universal Credit after a significant life event and will join with pre-existing arrears, while those on legacy benefits are likely to have been claiming for a longer period, with arrears having reduced over time.”
She said the department had made various changes to Universal Credit to prevent people going into arrears.