Former housing minister Alok Sharma stood by “they were already in debt” when put on the spot over Universal Credit rent arrears during a Commons debate.
The Westminster Hall session was told that a single local authority area – that was a pilot for Universal Credit – tenants had racked up £1.9m of rent arrears or £534 per tenant on average.
While the DWP’s advertising campaign promoting Universal Credit was dismissed as something out of “Jackanory”.
Labour’s Ruth Gordon questioned whether Work and Pensions Sharma “understood the waffle” the DWP had given him to bat off issues raised by MPs at the session on Universal Credit and debt.
Gordon said she, for one, would be grateful for “proper explanation”.
Within Sharma’s “waffle” was a reference to last year’s report by the National Federation of ALMOs suggesting over three quarters of their tenants who had started claiming Universal Credit were already behind with their rent prior to commencing their claim.
Sharma subsequently cited “research that we have carried out” purportedly showing that the proportion of universal credit claimants in arrears at the start of their claim fell by a third after four months.
Then came the Universal Credit full service claimant survey, published by the DWP a year ago and stating 84% of claimants said that they felt confident about managing and paying their housing costs.
“I can confirm that we are carrying out further analysis with a number of housing providers to investigate and understand the true level of rent arrears among their tenants, and what is causing those arrears – of course, when we have that information, we will publish it,” said Sharma.
Defending crippling loans offered to struggling claimants, Sharma squeezed in a reference to “dire financial circumstances” inherited from the last Labour government and the need for “difficult decisions.”
And the loans, he said, were not loan-loans but “interest free advances”.
The SNP’s Chris Stephens said Sharma’s stance stood in stark contrast to the “Jackanory” advertisements for Universal Credit the DWP took out in a single publication with a cost estimate in the millions – without reference to them being from the DWP.
Stephens spoke of a constituent pointing out an advertisement mentioning the advance payment – without saying it was a loan.
“The advance payment is a loan, and the Government cannot keep denying that or saying that it is something else.
“That loan is adding to Universal Credit debt, as is the five-week wait – people are refusing the advance because it is a loan,” said Stephens.
“Those adverts would not look out of place in an episode of Jackanory,” he said.
Sharma said the DWP had consulted the Advertising Standards authority and the adverts “reflected their advice”.
Labour’s Jo Platt cited the “extensive experience” of Universal Credit in her Leigh constituency – a pilot area for the ‘reform’.
Platt referenced the recent report by the Association of Retained Council Housing found that in the north of England, 75% of universal credit households were in arrears, compared with 39% of non-universal credit households.
“In our local authority, universal credit tenants have £1.9 million of rent arrears, which is a shocking £534 per tenant on average.
“Those are not isolated cases; that is caused by the failing system.
“With a 97% likelihood of local universal credit claimants falling into arrears, only a total and fundamental overhaul of our welfare system will suffice,” said Platt.
Sharma could, said Platt take one of two paths: “Either he will listen to the facts, stories and experts, or he will follow the Chancellor’s example and claim there is no crisis.”
The SNPs Neil Gray said North Lanarkshire Council, in his constituency, was having serious problems with the inflexibility of the current system on when rent payments are made.
“That means that I have received loads of cases where council tenants are getting chased for rent arrears, when the delay is in fact caused by the DWP.
“The DWP has acknowledged that issue, but there is no date for when it will move from a four-weekly to a monthly payment system,” said Grey.
He urged the DWP to work with councils and other housing providers to establish a more flexible system that: “Enables them to know for certain when rent is to be paid.”
Labour’s Mike Amesbury referenced a case study from Riverside Housing Group – serving his constituency – that he said illustrates the systemic failure of Universal Credit on the frontline.
The account of the couple involved read: “Me and my partner have had so much Universal Credit taken off us, that we are struggling to get gas, electric and food, on a monthly basis, we have tried weekly and that was even worse, the money that we are on makes having a home difficult…so we are having to visit the food bank more regularly.”
Amesbury said changes and cuts to the local housing allowance have helped to drive rent arrears up to “alarming levels”.