Labour warns Universal Credit is costing councils millions

Local authorities are spending millions of pounds from their own resources to tackle the effects of Universal Credit, according to new research from the Labour Party.

According to Freedom of Information requests, councils up and down the country are committed large sums of money towards offsetting and preparing for the impact of the controversial scheme.

The research shows councils are having to provide additional rent arrears support and working with Citizens Advice and local food banks to offset the impact of Universal Credit.

The examples include Tower Hamlets council, which according to the data, has set aside £5 million over three years to help those affected by Universal Credit, while Newcastle city council is spending nearly £400,000 from its own resources supporting claimants.

Other examples include Cheshire West and Chester Council, which is spending more than £500,000 this year and next on additional staffing. It also has a budget of £60,000 for discretionary hardship payments.

And Sunderland city council is using resources from a £250,000 local welfare provision scheme to help residents claiming Universal Credit.

While Telford and Wrekin council is using resources from its welfare crisis assistance scheme to prevent tenants from being evicted due to rent arrears caused by Universal Credit.

In October, the work and pensions secretary, David Gauke insisted Universal Credit ‘is working’ despite calls from council leaders and some of his own MPs to halt the rollout of the controversial scheme.

Speaking at the Conservative party conference in Manchester yesterday, Mr Gauke said the rollout will continue to the ‘planned timetable’.

And in November, the chancellor Philip Hammond announced the government was removing the seven-day waiting period applied at the beginning of a benefit claim, so that entitlement to Universal Credit will start on the day of the claim.

Labour’s shadow minister for employment, Margaret Greenwood, said Universal Credit is causing misery and hardship for thousands of families this Christmas, and local authorities are being expected to pick up the pieces.

‘It’s clear councils are committing their own valuable resources from already-stretched budgets to offset the impact of Universal Credit and to prepare for the damage its roll out could cause,’ added Ms Greenwood.

‘This is yet more evidence that the Government should immediately pause the roll out of Universal Credit so its fundamental flaws can be fixed.’

In response, a spokesman for the Department of Work and Pensions said councils have been providing welfare advice and housing payment top-ups as standard, since long before the introduction of Universal Credit.

‘Universal Credit lies at the heart of our commitment to help people improve their lives and raise their incomes,’ added the spokesman.

‘It provides additional, tailored support to help people move into work and stop claiming benefits altogether.

‘The majority of claimants are comfortable managing their money but advances are available for anyone who needs extra help, and arrangements can be made to pay rent direct to landlords if needed.’