Croydon council has had to spend £3 million so far to stop people from being evicted because of late rent payments, Mr Reed told the House.
According to my council’s figures, a tenant on housing benefit—the legacy system—had an average rent account that was £42 in credit.
Under universal credit, a tenant has an average balance of £722 in arrears. This is supposed to be a system that helps low-income families, but it is instead forcing them into debt and out of their homes.
More than 1,000 tenants in Croydon have over three months’ rent arrears and are at risk of losing their home because of the failures of universal credit.
Local food banks are running out of food because of the vast increase in demand from people who are going hungry because of what the Government’s scheme has done to them.
Mr Reed agreed with Stephen Timms (Lab East Ham) who said one of the problems, although it was being denied by ministers, was the fact that the IT system for universal credit was not yet working properly.
“I cannot for the life of me understand why the Government insist on ploughing ahead when it is quite clear that the IT system is not fit for purpose.
“They should pause the process and fix that before they inflict this damage on any more people.”
Parliament agreed a motion from Frank Field MP which called on the Government to reduce the standard initial wait for a first Universal Credit payment to one month.
Mark Fowler , Croydon’s director of gateway and welfare, gave evidence at a Commons select committee hearing on 23 January 2017. In a follow-up letter to Frank Field dated February 3rd, Mr Fowler told Mr Field:
“During the committee we discussed particular problems with regard to the vulnerability of customers that require emergency nightly paid accommodation (ETA).
“Whilst we are experiencing considerable arrears among those of the council’s own tenants claiming UC, it is customers in this type of accommodation where we are experiencing the biggest impact.
“Those impacts call into question the future financial sustainability of fulfilment of the council’s statutory duties under current homelessness legislation.”
Mr Fowler’s letter of February 3rd, which runs to seven A4 pages, also said:
Council tenant arrears: “At Croydon we have over 14,000 council tenants, of which 1,250 are now in receipt of UC. “Prior to roll out of UC our collection levels stood at 98 per cent. “But post implementation of full service we have seen levels drop to 72pc for UC customers, which in total now contributes to 38pc of our overall arrears although it is only 9pc of our tenants.”
Further reading: Universal credit behind rising rent arrears and food bank use, ‘guinea pig’ councils say. Research by Southwark and Croydon councils reveals devastating effect of new benefits system. https://www.theguardian.com 23 Oct 2017
[PDF]Response from London Borough of Croydon re Universal-Credit http://www.parliament.uk/. 3 Feb 2017