Universal Credit responsible for increasing rent arrears, says Holyrood Committee

12.06.2019

The introduction of Universal Credit has greatly increased rent arrears and a Scottish Parliament Committee has called for immediate action to tackle this issue.

The Social Security Committee has recommended that the DWP pay the housing element of Universal Credit (UC) directly to landlords as a default and says the minimum five-week delay for tenants receiving their first UC payment must change to help combat rent arrears.

Concerns are also raised over the cost and condition of temporary accommodation with the Committee report asking for housing benefit in this area to be devolved to help address issues of homelessness and rough sleeping.

A widening gap between private sector rents and the amount provided by the social security system is also highlighted in the report. The Committee wants an urgent review of the Local Housing Allowance (LHA) so that rates are increased as required to help tenants afford rents in the private rented sector.

Bob Doris MSP, Convener of the Social Security Committee said:

“The rapid increase in rent arrears since the introduction of Universal Credit is unacceptable. The UK government must take immediate steps to tackle this issue which is costing local authorities and social landlords critical money at a time when budgets are already stretched.

“We want to see the housing element of Universal Credit paid directly to landlords and the DWP must review the minimum five-week wait for new UC claimants, both of which contribute to rising arrears.”

The Convener continued:

“Our inquiry highlighted a number of issues, including the frankly discriminatory shared accommodation rate which should be abolished immediately. It is also clear that LHA rates are not fit for purpose and are failing to help claimants meet the rising cost of the private rented sector.

 “We hope the DWP will take heed of the recommendations in this report and act swiftly to change the system, to help reduce arrears and ensure that our most vulnerable in society can pay their rent.”

Other recommendations in the report include:

• For the DWP to act on the concerns of social landlords to improve the landlord portal.
• For the DWP to find ways to improve data sharing for both private and social landlords while being mindful of data protection concerns.
• That the Scottish Government keeps under review the level of funding for Discretionary Housing Payments (DHPs) and that local authorities do more to raise awareness of DHPs.

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