Research published today by the National Federation of ALMOs (NFA) and the Association for Retained Council Housing (ARCH) charts the impact of Universal Credit on the rent arrears of households living in council owned homes. More than two years into the programme to transform the payment of six major benefits the new arrangements continue to have a devastating impact on families, and their ability to maintain rent payments.
Research revealed that 86% of universal credit claimants living in council owned homes are in rent arrears, compared to 79% at March 2016. For 59% of these claimants arrears equate to more than one months rent. The average value of arrears tenants owed across UC households has almost doubled to £615 since 31 March 2016 when average amount was £321.
John Bibby, Chief Executive ARCH says: ‘We are extremely concerned with the upward trajectory of rent arrears for universal credit households. Not only are numbers of households increasing as UC is rolled out, but the percentage of households falling into rent arrears and experiencing financial difficulty is critically high. If this trend is not reversed it will have significant impact on local authorities’ rental income streams and the long term ability for housing departments to provide essential services to their communities. Together with the NFA we continue to hold regular conversation with the DWP to find ways to resolve the problems currently being experienced by claimants.’
Hugh Broadbent, NFA Chair added: ‘We will continue to work with the DWP to help identify and resolve operational issues and improve service performance in processing universal credit claims. We believe the current unacceptable waiting times and errors in processing claims are causing significant financial hardship to our tenants and communities. The reported increase in the presence of loan sharks within our communities is alarming, but sadly not surprising. The delay in claimants receiving benefit inevitably forces households to turn to other ways to survive, including family and friends, pay day lenders and as a last resort loan sharks. The repayment of extortionate interest only further exacerbates a tenant’s ability to pay their rent’.
NFA and ARCH represent more than 1 million council homes in England.