Scottish parliamentary committee calls for universal credit overhaul

13 Jun 19

The introduction of universal credit, and in particular the five-week delay before receipt of the first payment, has led to an “unacceptable” rise in rent arrears north of the border.

In a new report, members of the Scottish Parliament’s social security committee called for an overhaul of the benefit, which would see a review of the initial delay as well as the direct payment of the housing element to landlords in order to reduce arrears.

The MSPs also called for abolition of the “frankly discriminatory” shared accommodation rate, which limited the amount of housing benefit or universal credit that can be claimed by tenants under the age of 35, who rent a room in a shared house from a private landlord.

According to evidence heard by the committee, the shared accommodation rate created “significant financial difficulty, debt and hardship” among younger people, with separated parents particularly badly affected.

The report also draws attention to the widening gap between local housing allowances and the cost of renting in the private sector, especially in Edinburgh and other urban areas.

Originally uprated in line with market rent, local housing allowances have been frozen since 2016, meaning that in many parts of Scotland they do not serve their intended purpose and should be reviewed, the MSPs said.

The committee was also “extremely concerned” by the high cost of temporary accommodation and “troubled” by the poor quality of the accommodation some tenants had been offered. Although temporary accommodation is intended to be a short-term measure, people find themselves trapped there due to the shortage of affordable alternatives, they heard.   

Bob Doris, convener of the social security committee, said the rapid increase in rent arrears since the introduction of universal credit was “unacceptable”, and that steps must be taken to address this issue, which was increasing the budgetary strain on both local authorities and social landlords.

“We want to see the housing element of universal credit paid directly to landlords and the Department for Work and Pensions must review the minimum five-week wait for new…claimants, both of which contribute to rising arrears,” he said.

“Our inquiry highlighted a number of issues, including the frankly discriminatory shared accommodation rate which should be abolished immediately.

“It is also clear that local housing allowance rates are not fit for purpose and are failing to help claimants meet the rising cost of the private rented sector.”

A UK government spokeswoman said that while rent arrears could not be linked to any one cause, many people joined universal credit with pre-existing arrears, and research showed that number fell by a third after four months.

“In Scotland we already pay rent directly to landlords where requested and can pay universal credit more frequently to help with budgeting,” she said.

“Meanwhile, Scotland has significant welfare powers, including flexibilities within universal credit and the power to top-up existing benefits, pay discretionary payments and create entirely new benefits altogether.”

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