Monday, October 23, 2017

The flaws of the new poor laws

The universal credit system is pushing poor tenants deeper into rent arrears and sending food bank referrals soaring. Southwark and Croydon councils in south London warned that without rapid changes the new system could have a devastating effect across the country as it is rolled out over the next few months, warning that arrears could reach “many hundreds of millions of pounds” and that tenants could face severe hardship. One food bank reported an increase in referrals of 97%.

“Participants in this research almost universally have experienced financial hardship as a result of transitioning onto universal credit, notably as a result of the significant delays to payment,” the study says.

The study found that long delays for universal credit payments was a key cause of stress, anxiety and depression for claimants. 

Fiona Colley, Southwark’s cabinet member for finance, modernisation and performance, said: “Universal credit, in its current form, has the potential to be catastrophic, not just for residents at an individual level, but for councils’ budgets for housing. The arbitrary delay in receipt of money – particularly for those already in difficult situations such as temporary accommodation, could mean a spiral of debt, poverty and people not being able to afford to eat. I cannot think of a more compelling reason to push for change on this.”

Alison Butler, Croydon council’s deputy leader and cabinet member for homes, regeneration and planning, said“This report underlines the major flaws in universal credit, which is placing more and more Croydon and Southwark families in rent arrears and at risk of losing their home. The government needs to fix this policy now or risk devastating thousands more people not only in Croydon but nationwide.”

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