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Universal credit impact prompts need to find extra hardship funds

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Councils are committing significant funding and resources to offset the impact of universal credit, research has revealed.

Freedom of Information requests by the Labour Party show some councils in areas where universal credit has already been introduced are spending heavily to support claimants that are suffering hardship, while others are allocating resources in preparation for a roll-out in their areas this year.

Newcastle City Council said it has spent nearly £400,000 on supporting claimants, a quarter of which was allocated due to rent arrears. The council said non-collection of rent due to universal credit had amounted to more than £1.2m from a tenancy base of 27,000.

The research also revealed Tower Hamlets LBC has allocated £5m over three years to support universal credit payments, while Barking & Dagenham LBC has set aside £500,000 for this year.

Cheshire West and Chester Council said it is planning to spend more than £500,000 this year and next year on additional staffing due to the introduction of universal credit and has allocated a budget of £60,000 for discretionary hardship payments.

Cornwall Council said it is expecting the number of claimants requiring personal support will rise from 37 last month to 191 in March this year, while Gateshead Housing Company, which manages Gateshead Council’s housing stock, is expecting to spend £90,000 in 2017-18 and £270,000 next year on additional staffing to support claimants.

Responding to the figures, shadow secretary of state for communities and local government Andrew Gwynne said councils are in an “impossible position” due to growing demand for support at a time of reducing budgets.

He added: “[The detail released by councils] is yet more evidence that the government should immediately pause the roll out of universal credit.”

In the November budget, chancellor Philip Hammond announced measures aimed at addressing concerns over the roll out of universal credit, including reducing the six-week waiting time for payments to five-weeks from February and changes to the system of advances aimed at preventing people falling into hardship.

The government also announced a plan to enable councils to be able to claim back 80% of the costs of supporting people in emergency and temporary accommodation directly from the Department of Work & Pensions. The DWP says this will save councils £70m in 2018-19.

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Readers' comments (1)

  • Council funds have been decimated since 2010. It is entirely predictable that these same councils are now expected to prop up the disastrous failure of Universal Credit at the expense of other services.

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