Councillors fear that homelessness in Hertfordshire will rise because of Universal Credit’s (UC) failings.
Dacorum Council during a scrutiny committee meeting two weeks ago (July 17), said that UC poses a “significant financial risk” to departments like housing.
They say because UC benefits go straight to the claimants not the housing service, rent arrears are expected to rise to £270,000 by next year.
“There will be increased pressure on the homelessness and advice teams due to the refusal of private landlords to accept UC claimants.”
Adding that there will be additional evictions from private landlords for existing tenants wanting to move to UC.
Universal Credit was brought in as a part of the Government’s Welfare Reform Programme in 2010.
The aim of UC was to simplify the benefits system for those of working age and incentivise employment.
Dacorum say that one of the biggest impacts to Dacorum is to the Housing Service.
They say that while the average rent balance of tenants in Housing Benefit (HB) is £41.18, tenants on UC had an average of £737.42 in arrears.
Dacorum said that the rise in rent arrears will also increase the amount of “irrecoverable” bad debt and evictions, which could lead homelessness.
After two UC tenants had their arrears written off, Dacorum have had to increase their bad debt provision from £300,000 to £700,000.
Because the UC claimants require more support, advice and time than tenants on HB there will be an increase in the workload and pressure for housing staff.
In conclusion the report says an internal working group has been set up to tackle the problem.
They are focusing their efforts on three key work streams.
These include finance, information and performance, communication strategy/partnership delivery, and operational/implementation delivery.
They say they will work with other housing providers and groups to “influence changes” to help reduce dependence on the welfare system.
The roll out of UC is projected to impact more than 1,000 residents in Dacorum by April 2019.
That figure is expected to rise to “multiple” thousands when the UC is fully implemented in 2023.