Welfare reform ‘pushes up rent arrears for Scottish tenants’

15 May 18

Welfare reform has had a substantial impact on the Scottish housing sector, with the introduction of universal credit pushing up rent arrears for social tenants, according to a report from the Scottish Government.

Evidence from local authorities with their own housing stock suggested that rent arrears were two and a half times greater for tenants on universal credit than for those on housing benefit.

In East Lothian, the first council in Scotland to introduce full service universal credit, 72% of council tenants claiming the new combined benefit were in rent arrears, compared to 30% of tenants as a whole, the report released over the weekend said.

In addition, the freeze on local housing allowance rates had significantly limited the availability of affordable accommodation in the private rented sector.

“The impacts of welfare reform ripple out, from tenants directly affected, through to support services, landlords and other tenants who ultimately subsidise UK cuts through the rent they pay,” the report said.

“On top of that, the good work being undertaken by councils and landlords to deal with the consequences of UK reforms inevitably adds to the wider financial and resource pressure they are operating under and therefore impacts detrimentally on the services they can provide.”

Around a fifth of Scotland’s 2.4 million households receive support for housing costs, at a total cost of about £1.7bn. Although housing policy has been devolved to Holyrood, social security is still largely reserved, with the exception of certain benefits which are in the process of being devolved.

Housing minister Kevin Stewart said welfare reform was having a “devastating” impact on the poorest in society.

“Money [is being] taken from the pockets of people across the country, pushing them into crisis and debt,” he said.

The Scottish Government was spending over £125m this year to protect those on the lowest incomes, including £62m to mitigate the bedroom tax, he said.

But a UK government spokesman said that under universal credit claimants could receive support through 100% advance payments, including housing costs, available from day one.

“We have also introduced two weeks additional rent payment for people joining universal credit from housing benefit, and landlords can apply to have rent paid directly to them if their tenants are in arrears,” he said.

“The best way to help a person pay their rent is to help them find work, and universal credit is succeeding at getting people into work faster, and helping them stay in work longer,” he added.

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