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Universal credit unfairly passing on costs to councils

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The introduction of universal credit has effectively pushed administration costs on to local government and has not been met with sufficient central funding to match, according to a new report by an influential parliamentary committee.

The public accounts committee found councils are “facing additional costs” which the Department for Work & Pensions “does not cover, and [local authorities] have been forced to cover the costs of their local area moving to universal credit”.

Evidence from Newcastle City Council, one of the roll-out trial areas, showed a doubling of rent arrears from £1m to £2m in 2017-18 following the introduction of universal credit and reportedly paid an additional £0.75m to support the scheme’s roll-out.

Leicester City Council also raised concerns over the administrative requirements, as it witnessed an “increase of 3,000 person-hours required to manually check and process paperwork in just three weeks”.

The public accounts committee also reported that the DWP had been “unresponsive” to issues raised by local authorities, with many councils warning that the department is “not learning lessons”.

Committee chair Meg Hillier (Lab) said: “This report provides further damning evidence of a culture of indifference at DWP – a department disturbingly adrift from the real-world problems of the people it is there to support.”

The committee recommended the DWP attempt to “understand and measure the additional costs and burdens for local organisations” and establish future plans to improve local resilience, particularly as the number of claimants on universal credit is expected to increase.

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