Universal Credit in Crisis: Hundreds of struggling Sussex residents leave councils with £1million deficit

Struggling Sussex Universal Credit claimants are in financial crisis with unpaid bills leaving them hundreds of pounds in debt.

JPIMedia Investigations has looked at Universal Credit nationwide
JPIMedia Investigations has looked at Universal Credit nationwide

Residents relying on foodbanks and forced to choose which bills to leave unpaid shared their stories with this newspaper as part of a nationwide JPIMedia investigation into the controversial benefit.

They were among hundreds of people whose combined debts have left Sussex councils more than £1million out of pocket through unpaid rent and council tax, the investigation found.

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Peter Lamb, leader of Labour-controlled Crawley Borough Council, said: “Universal Credit has been a total failure on every level, one which was entirely avoidable, and which taxpayers and families will be paying the price for years to come.”

Universal Credit in Crisis infographic SUS-190524-131320001

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Nationwide investigation

Nationally, JPIMedia sent Freedom of Information requests to councils across the UK.

Crawley Borough Council leader Peter Lamb

In Sussex, figures were supplied by six councils with their own housing stock – Arun, Crawley, Lewes, Eastbourne, Wealden and Brighton & Hove. Adur District Council did not hold the information.

The authorities confirmed they knew of 1,356 tenants on Universal Credit in rent arrears, with average debts of just over £700.

This amounted to a total of £965,042 in unpaid rent.

But despite the financial black hole many faced, just one Universal Credit claimant – in Crawley – was evicted across the six councils since 2013.

Additionally, Horsham, Mid Sussex and Wealden were able to establish that a combined £112,616 of council tax was owed by those on the benefit in the last financial year alone.

The Sussex picture echoed the national findings, with data from 145 councils with housing stock and the Northern Ireland Housing Executive showing more than 120,000 Universal Credit claimants were in rent arrears, owing a combined £84.5million.

‘Government warned about impact on rent arrears’

Mr Lamb said stopping rent from being paid straight to landlords and preventing councils knowing which tenants were receiving benefits towards their housing had led to predictable consequences.

Crawley Homes housing officers said arrears were on the up, amid a backdrop of a ‘very stable’ position over several years.

But aside from the financial cost, complex cases were taking up hours of officer time, including staff sometimes needing to accompany new claimants to the Job Centre to assist with their claims.

Mr Lamb said: “The Government was warned if they pressed ahead with Universal Credit, stopping rent from being paid straight to landlords and preventing councils from knowing which tenants were receiving benefits towards their housing costs, the result would be an increase in rent arrears and eventually homelessness.

“They ignored all the experts’ advice and now vulnerable families across the country face eviction, millions of pounds which should have gone towards affordable housing has been lost, millions more will have to be spent tackling the resulting homelessness, and even funding for the support workers councils need to help these families has been cut.”

Reported issues

Between January and March, Citizens Advice in West Sussex recorded 2,065 client issues with Universal Credit.

From this, ten per cent reported housing issues such as rent arrears, while nearly half had problems with their initial claims.

The statistic covers the majority of West Sussex, including Adur and Worthing, Crawley, Horsham, Mid Sussex and surrounding areas.

From January - March 2019, Citizens Advice in West Sussex (North, South, East) – which includes the Citizens Advice centres in Worthing and Shoreham – recorded 2,065 client issues with Universal Credit.

Calls to stop Universal Credit roll-out

Universal Credit is now active for new benefit claimants in every part of the UK.

But with the second half of the roll-out – to three-million old-style benefit claimants – due to start with a trial in July, charities have called for an urgent halt to the programme to avoid an impending catastrophe.

In-built problems with Universal Credit are leading people towards ‘destitution and homelessness’, according to Shelter’s policy lead Stephanie Kleynhans.

Margaret Greenwood, Labour’s Shadow Work and Pensions Secretary, said: “This important investigation is a shocking reminder that Universal Credit is clearly failing.”

She said the Government ‘must stop the roll-out of Universal Credit’.

But the Department for Work and Pensions said it was wrong to blame Universal Credit for rent arrears.

Government responds

“We completely disagree with this analysis which compares fundamentally different claimant groups,” a spokesman 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.”

The spokesman said the department had made various changes to Universal Credit to prevent people going into arrears.

This included paying two weeks of extra Housing Benefit for those moving onto Universal Credit and paying rent directly to landlords where requested.

Universal Credit was meant to save money and simplify the welfare system by replacing six benefits for unemployed people or those on low incomes with one monthly payment.

But it has faced repeated criticism for leaving many claimants worse off than under legacy benefits and for an error-prone system.

So far, only new benefit claimants or those whose circumstances have changed have been placed on Universal Credit, amounting to some 1.8million people.

To find out more about the advice on offer to claimants from Citizens Advice, including details of local drop-in sessions, call its Universal Credit helpline on 0800 144 8444, or use the Universal Credit webchat service at www.advicewestsussex.org.uk/i-need-help/universal-credit-help-to-claim/