Social housing representative bodies are calling on the government to review Universal Credit as new research finds more than three quarters of tenants are in rent arrears. Written by Sophie Barnes for http://www.insidehousing.co.uk

‘Three in four Universal Credit tenants in arrears’

The National Federation of Arm’s Length Management Organisations (NFA) and the Association for Retained Council Housing (ARCH) published the findings of their latest survey of councils and ALMOs today which found one year on from the rollout of Universal Credit across England 79% of around 3,000 tenants that are on UC are in rent arrears compared to 31% of other tenants.

The NFA and ARCH are due to meet with Lord Freud, minister for welfare reform, today and will call for the government to abandon the seven day waiting period for Universal Credit, review the in-arrears policy to see if this is causing “unnecessary hardship and long term disadvantage” for UC entitlement and speed up the UC assessment process to three weeks.

The organisations surveyed the same 20 councils and ALMOs it got responses from in a similar survey at the end of last year.

The previous survey found 89% of tenants were in arrears compared to 79% in the latest survey. The report adds: “However households in receipt of UC remain much more likely to be in arrears and also have, on average, larger levels of arrears than tenants in general”.

All respondents said the six-week period before a tenant receives their first UC payment is “very frequently or frequently a factor in claimants falling into arrears”.

The report said: “It looks likely that many claimants simply do not have sufficient savings (including their last pay cheque) to get them through this period”.

On average tenants on UC owe £321.05, higher than the average for all tenants in arrears which is £294.57.

Respondents also said they are seeing an increase in demand for money and debt advice services,food banks and hardship funds.

Several respondents said they had noticed tenants increasingly using loan sharks and pay day loan companies.

Hugh Broadbent, chair of the NFA said: ‘‘We look forward to sharing our findings later today with Lord Freud…Our concerns are heightened in situations where the claimant was not in paid employment immediately prior to submitting a claim for UC, for example where previous benefits have been sanctioned or adjusted.”

John Bibby, chief executive of ARCH said: “A review of current policy is imperative if we are to reduce unnecessary hardship within our communities.”

Source: Inside Housing