Rent debt triples in East Devon since Universal Credit

The authority is owed more than £50,000

East Devon District Council’s cabinet were told that the council had 191 tenants claiming Universal Credit, with a combined rent debt of £52,621.37, as of January 2019.

But council officers established that before Universal Credit was introduced in July 2018, the same tenancies only had outstanding debts of £16,819.65. Their debts, or the amount the tenants are in rent arrears to the council, have increased by £35,801.72.

Cllr Pauline Stott, chairman of the Housing Review Board, said that the results were alarming and that the council needed to look very carefully at what it meant and how they could help tenants.

Of the 191 council tenants currently claiming Universal Credit in East Devon, 58 were in credit with their rent or had a zero balance, 19 had rent arrears of less than two weeks, 34 had rent arrears of between two-four weeks, 45 had rent arrears of between four-eight weeks and 35 had rent arrears of more than eight weeks.

The standard process for Universal Credit is that it is paid directly to the tenants with an expectation that they would then pay the proportion that covered their rent directly to the council.

But the cabinet heard that while new system sees money for rent going to tenants, rather than straight to their landlords, and that the DWP says that the measure is designed to encourage claimants to manage their money, it is simply leading to rising rent arrears.

They also heard that another potential problem with Universal Credit is the six-week wait before claimants receive their first payment, with widespread reports of some claimants waiting even longer.

A report to the cabinet outlined the many concerns over Universal Credit, including:

• People not prioritising their bills or managing their budget effectively, getting into debt and then a greater reliance on food banks, charities, utility subsidies.
• Increases in arrears becoming harder to recover.
• The council being unable to commence actions it would usually have undertaken before service of possession proceedings while the tenant was in the process of transitioning to Universal Credit, meaning arrears would be at a higher rate before they could begin to be recouped through the Court process.
• The necessity to apply for and manage Universal Credit claims through an online account, and this not being done correctly often held up, or even stopped claims.
• Where a joint tenant had left the property but never removed their name from the tenancy, only half the claim could be paid and as these people had often moved on with their lives and did not wish to make contact, the council cannot remove them from the tenancy

The cabinet heard that officers were looking at setting up a workshop within each area of the district to help tenants with budgeting and dealing with non-priority debts, so that the transition was smoother and easier for tenants.

But they also heard that looking at the average debt of tenants currently receiving Universal Credit, it was forecast that another £316,642 could be owed by the time all working age tenants on housing benefit had transitioned.