East Lothian Council Universal Credit lessons

Monday October 22nd 2018

East Lothian Council

Written by Local Democracy Reporter, Marie Sharp

The UK Government is being urged to learn lessons from the first Scottish pilot of Universal Credit after it was branded an “experiment in cruelty”.

East Lothian became the first local authority area to introduce the digital roll-out of the new welfare payments in March 2016.

Two-and-a-half years on, East Lothian Council is still seeing the fallout, with rent arrears of nearly £1million attributed to the introduction of the new system.

And as Prime Minister Theresa May is facing a backlash from her own MPs over plans to push ahead with introducing the system in England, she has been warned to look at the impact it has had north of the Border.

Councillor Stuart Currie, SNP Group leader in East Lothian, said that lessons had to be learned from the experience in the county.

He said: “It seems clear to me that when you have a pilot and it doesn’t work you don’t just plough on as the Tories have and say it’s OK when everyone knows it is not.

“The lesson the UK Government needs to learn is that when you make cuts on the backs of people and families in greatest need then decent people will always stand up and say it’s time to stop and think again. That is what the Tories must now do.”

His warning comes as former Prime Minister Sir John Major warned Mrs May that she could face a revolt on the scale witnessed after then Prime Minister Margaret Thatcher introduced the poll tax in 1989 and 1990.

Universal Credit replaces six separate benefit payments with one combined amount.

However, delays in system have seen people left for up to two months with no benefits at all as they are switched from the old system to the new payment.

The new payment also sees housing benefit paid to recipients directly instead of to their landlords and many found themselves immediately in rent arrears as their first payments were delayed.

Earlier this year, East Lothian Council said that more than 70 per cent of tenants on the new Universal Credit were in rent arrears, with nearly £1million owed to the local authority.

There were further problems at the start of the financial year in April when tenants were required to inform the Department for Work and Pensions (DWP) individually of the council’s rent increase of five per cent, causing even more arrears.

A report to the council earlier this month revealed: “Rent collection was adversely affected in April and May due to Universal Credit claimants having to report their increased housing costs to DWP directly.

“DWP will not accept the new annual rent charge information from a landlord but insist on individual claimants updating their online journal.

“This cannot be done in advance, it must be carried out on the effective date of change.”

When Universal Credit was first introduced in East Lothian as a pilot, then Musselburgh councillor Fraser McAllister described it as an “experiment in cruelty”.

Fellow councillor Mr Currie said that, nearly three years on, that remained an accurate description.

He said: “There is no doubt that the introduction of Universal Credit in East Lothian has had a massive impact both on a human and financial scale.

“So many people not receiving money when they should has left families in poverty far too often. We have seen an increase in the use of foodbanks and massive rent arrears. The fact is that the real purpose of Universal Credit has not been about simplification of benefits but more about cutting of benefits. The UK Government only now are waking up to the reality of the mess they have created.”

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