The roll-out of universal credit in Birmingham could be directly linked with homelessness and food poverty in the city, according to a local councillor.
And, without the interventions of the council, as many as 25 families could have lost their homes as a result of the alterations in benefits payments.
Speaking at this week's Housing and Neighbourhoods Overview and Scrutiny Committee, Councillor Tristan Chatfield (Lab) said that the implications of the recent roll-out of universal credit across the city 'have been quite serious and noticeable'.
He said that an estimated £5 million in arrears is owed to the council by residents who have transferred onto Universal Credit, a figure which the council expects to continue to rise as more people sign up to it.
What have been the effects of Universal Credit?
Universal Credit, which replaces a range of benefits including Jobseeker’s Allowance, Income Support, Housing Benefit and more, has been introduced gradually across the country, and was introduced in Birmingham last year.
But the system has been criticised by many as lacking, with thousands of people facing a six-week waiting period with no benefits before receiving their payments.
Several reports also claim that the new system leaves claimants worse off than the old system, with some suffering as much as a £200 monthly shortfall in their finances.
And Cllr Chatfield believes that the introduction of Universal Credit is having a serious impact on the people of Birmingham.
"I think it’s safe to say that in terms of the impact on households starting Universal Credit, I think we’re really starting to see the impact of that nationally," he said.
"And you can perhaps link things like homelessness and issues around things like food poverty directly to the introduction of Universal Credit.
"So I think it is a very serious issue for the city and this council, and we are trying to ensure that as many mitigations as we can put in place are put in place.
"As we stand at the moment we have gone into full service. Now that name is slightly misleading because it doesn’t cover everyone, but what it effectively means is that all our job centres are rolling out universal credit for new applicants.
"In terms of tenancies, we’re talking roughly £5 million of arrears now held by tenants with universal credit. Obviously some of those are historic, but it’s a substantial amount of arrears and its an average of £700 per case. Whereas the general caseload is around £200, so you can see that the numbers are quite stark in that sense.
"Those arrears represent 33 per cent of the arrears owed to the council, even though only 12 per cent of our tenants are on universal credit. And as those numbers go up every single day we can expect these figures to keep going up, til eventually it should plateau out once universal credit has been rolled out to everyone."
The council has been working with families and individuals throughout the process to help them get the assistance they need, often arranging emergency payments or providing food vouchers when a complication arose with universal credit.
And Cllr Chatfield believes that the interventions of the council have probably helped prevent at least 25 families from becoming homeless.
"In terms of individuals, the city council has worked hard to put a number of mitigations and interventions in place around individuals, to support individuals who find their household income changing as a result of universal credit," he said.
"Now I think what’s an important thing to note about universal credit is that it is not just a change of benefit system, or methodology, it also includes reductions in benefit payments for a large number of people. Broadly speaking, it includes a cut in benefits for most people who will go on to universal credit, so it’s quite a serious issue for a lot of families.
"I think so far we've prevented around 25 evictions. Which is around 25 families who otherwise, in all likelihood, present as homeless or require temporary accommodation at the council."
