Universal credit ‘unfit for purpose’, says former council leader

Hove Town Hall
Hove Town Hall

The impact of universal credit on Brighton and Hove had councillors reacting in anger at a meeting last night (July 2).

Officers told the Brighton and Hove City Council’s neighbourhoods, inclusion, communities and equalities committee how introducing the new combined benefit was putting financial strain on the council.

The committee heard how some problems, such as people waiting a week between their last housing benefit payment and their first universal credit payment, were ending.

To ensure different teams work together, Jobcentre Plus and housing officers are working in each other’s offices.

The committee heard how the biggest impact is on the vulnerable.

Cllr Warren Morgan described the report as valiant.

The former Labour council leader said: “Demand for food banks has increased by 52 per cent. That is an astonishing figure.”

To underline his point he quoted National Audit Office: “The cost of running universal credit compared to the benefits it replaces cause us to conclude that the project is not value for money now, and that its future value for money is unproven.”

He said: “It is demonstrably unfit for purpose.”

Green councillor Dick Page asked how many people would be evicted due to rent arrears.

In January to March, 68 per cent of the 498 households on universal credit had average rent arrears of £473, with a combined total topping £150,000.

The council was able to collect 93 per cent of this money.

People in temporary accommodation on universal credit were in a total of £434,000 arrears in April.

Larissa Reed, executive director for neighbourhoods, communities and housing, said that the housing department would not evict anyone with problems with universal credit.

Cllr Page was also concerned about the limited budget to offer a council tax reduction.

The discretionary council tax reduction budget is £150,000, the same as last year when £139,000 was spent.

He said: “If we really care about the most vulnerable there we have to find a way to have a council take reduction in the budget that will meet the needs of the large number of people on low income.”

Labour councillor Julie Cattell described the report as “heartbreaking” and the case studies “Kafkaesque”, disproportionally affecting woman.

She said: “One of the cruellest things is if a woman is raped or in an abusive relationship and has a third child she has to prove she was raped to claim for the third child. This is social engineering.”

Green councillor Pete West said: “There is a cavalier attitude from the government.

“We are always going to see a level of antipathy towards people facing financial hardship.”

Conservative councillor Garry Peltzer-Dunn accepted the National Audit Office’s critical line.

He pointed out the office also stated there was ‘no practical alternative’ to the new benefit.

As of May 10, 5,564 households on universal credit.

Concerns were also raised about the 1,900 households in the city where a self-employed person is claiming housing benefit.

When this changes to universal credit then this will put pressure on the city, according to the report, as they were assumed to have a minimum income.

However, councillors were told it is still early days.

The 2018-19 budget takes note of the impact of universal credit and national welfare reform changes and payments are:

- Discretionary housing payments £837k (funded by a Department of Work and Pensions grant)

- Social fund £180k (funded by £400k one-off allocation from reserves)

- Recurrent discretionary council tax reduction support of £10k in addition to £140k one off funding (part of £400k one-off allocation from reserves)

- £80k towards the cost of the welfare reform programme and advice and support to families most affected by these changes (part of £400k one-off allocation from reserves)

- £100k allocated in the budget to address further potential issues with universal credit.

The council is currently working with East Sussex Credit Union to provide 35 products that support this approach (funded by a separate one-off allocation of £100k from reserves).

Sarah Booker-Lewis is the Local Democracy Reporter for Brighton & Hove.

For more of her stories, click here.