Universal Credit has led to a surge in people using foodbanks as tenants struggle to pay their rent

Katherine Johnston (05 December, 2018) Housing

‘The evidence is very stark that people are suffering from a system that doesn’t work’ - Cllr Victoria Mills

26907A volunteer at Pecan foodbank

Universal Credit has sent the number of people reliant on foodbanks skyrocketing as tenants fall into debt, says a new report revealing the scale of the welfare changes in Southwark.

Southwark was one of the first places in the UK to trial Universal Credit three years ago. The single payment replaces housing benefit, child tax credit, working tax credit, income support, employment and support allowance and jobseeker’s allowance, with the aim of helping people move back into work.

The council’s new report Safe as Houses 2, the second analysing how Universal Credit affects rent payments, followed 1,028 social tenancies in Southwark, including 377 households who moved onto Universal Credit in between August and October 2016, and 651 who moved into Universal Credit between August to October 2017.

Data shows people who moved onto Universal Credit in 2016 saw their arrears increase by an average of £586.

The group who moved onto the new system in 2017 had £309 more of arrears each – though they were followed for a shorter time.

This means the average person who moved into Universal Credit over two years ago has found themselves accruing £1.05 in unpaid rent every single day.

Compared to those still claiming housing benefit, rent arrears for tenants on Universal Credit are more than three times higher.

The scale of arrears has led to fears a nationwide roll-out of the scheme, expected next year, could severely constrain already tight budgets and the over-stretched charity and voluntary sector left picking up the pieces.

According to Peckham-based foodbank, Pecan’, around 80 per cent of new people coming through its doors do so because of Universal Credit. This year demand has grown by another third after a huge rise in users since 2017.

Chief executive, Chris Price, told the News: “We have seen a change in the people using us, and a lot more single people as they were the first to move onto universal credit.

“Lots of people who come to us are from a low income back ground and are struggling to find employment. A number have mental health issues.”

The report’s authors say these are not just temporary glitches as people move from the old system to the new, as data shows after fifteen months those affected were still consistently underpaying by around seven per cent.

People whose circumstances change or who struggle to make claims are the most vulnerable to falling into deep debt.

The report was launched at the House of Lords last Thursday, where Southwark Council’s cabinet member for finance, performance and Brexit, Councillor Victoria Mills, said: “The evidence is very stark that people are suffering from a system that does not work.”

The council, backed by Southwark’s MPs, are calling on the government to stop the planned roll out and fix a catalogue of problems including transferring people over who lack IT access, setting up split payments so domestic abuse victims are not left trapped, and improving payment delays.

“A failed system should be fixed before it is expanded,” Cllr Mills said, “not the other way around.”

In the meantime, Chris’ volunteers are spending the next few weeks hoping they can help people on the breadline have a proper Christmas – and celebrate it with the food they would chose to make if they could buy it themselves.

He told the News he was constantly overwhelmed by the volunteers and public who donate to help those who have fallen on hard times – including people who once needed help themselves.

“Last Christmas a lady drove up in a car filled with donations and said: ‘When I needed food you gave me food’.

“This is likely to be repeated this Christmas, because the people we help are people who want to give back when they can.”

A DWP spokesperson said: “Many claimants come onto Universal Credit with pre-existing rent arrears, and our research shows this falls by a third after four months.

“The vast majority of people are happy managing their money, and we recently announced a partnership with Citizens Advice to help vulnerable people make and manage their Universal Credit claims.”

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