EVERY tenant of homeless accommodation in the Highlands has been plunged into debt by the roll out of a controversial new benefits system.
The “terrifying” situation, which has been blamed on universal credit, means Highland Council is now owed £704,347 from claimants of the new benefit alone. This has increased by 82 per cent from £317,000 since September last year.
More than half of this comes from Inverness, where £473,227 is owed.
The local authority is owed around £1.3 million for all unpaid rent.
Universal credit is a single benefit to replace job seeker’s allowance, employment and support allowance, income support, child tax credit, working tax credit and housing benefit.
It has been widely criticised for leaving people worse off, as well as implementing a benefits freeze of a minimum six weeks while applications are processed.
Any new application or change of circumstances, including a new job, change of address or birth of a baby will result in the freeze, leaving people unable to pay rent.
“Live service” universal credit is applicable all over the Highlands and only applies to new claims but “full service” is currently being trialled in Inverness, where claimants have reported benefits freezes of four months, leaving them penniless and unable to pay rent or buy food.
Council leader Margaret Davidson said the missed payments have a knock on impact on the council’s ability to provide housing and predicts the situation getting worse.
“In Highland all of the people in homeless accommodation are in rent arrears, that is just awful,” she said.
“They don’t get any money for at least six weeks so they are always starting on a negative and a lot of them never get enough to be able to pay it back.
“It is already a major problem and it is going to get worse.
“We have to deal with not getting that rent income and bear that financial burden which then impacts on the rest of our housing stock because we don’t have enough money for repairs and new builds.”
The full service system is due to be rolled out to the rest of the Highlands in the summer but Inverness MP Drew Hendry has called for an immediate halt until the system can be managed more efficiently.
“These benefit cuts are lining the pockets of the UK Treasury while people living in temporary accommodation, along with working families, lone parents, those in receipt of disability benefits and job seekers are left without enough to make ends meet,” he said.
“The Scottish Government is also paying to mitigate bedroom tax in addition to other measures and now, thanks to this shambolic roll out, local authorities have to foot the bill for arrears. It is not on.
“The situation is now at crisis point and I have asked ministers to undertake an immediate consultation of the situation, with a pause on any further roll out in the meantime.”
Mr Hendry also described a constituent, who has been named only as Gavin, who receives just £60 per week for housing benefit on universal credit, despite his homeless accommodation costing £175 per week.
“Even if he gave up food, heat, light and everything else, if he spent every single penny on rent, he would still be short,” said Mr Hendry.
“It is Highland Council left carrying the debt of the money Gavin and others simply don’t have.”
Mr Hendry’s staff have been working with the Citizens Advice Bureau (CAB) and the council’s welfare support team to help people who have been left without money.
He urged anyone who has been affected to contact one of these organisations for help.
But Inverness Ness-side councillor Alasdair Christie, who also manages the Inverness, Badenoch and Strathspey CAB, pointed out CAB grants are being slashed at a time when more people than ever before need help.
“More than half of the people who approach CAB do so because they need benefits advice,” he said.
“More and more people are coming to us with issues with universal credit. It is a complex system which is difficult to use and even once they get the money a lot of people are getting far less than before.
“It has been a really rapid increase for us because it is such a challenging system.
“We are seeing more vulnerable people through the door than ever before but at a time when we are facing funding cuts ourselves.”
Cllr Christie added that people often miss appointments or have to hitch hike because they can’t afford the travel cost.
“We have seen people come to us when they have lost money because they haven’t been able to keep job centre appointments because they haven’t even got the bus fare to get there,” he said.
“Others have had to hitch hike from Aviemore, it is a very unsympathetic system.
“It is putting a strain on everything - the council, CAB, local MPs.
“In terms of housing arrears, people get into arrears quickly because they have no income and it fast becomes unmanageable.
“The council then bears that burden and that is not sustainable.”
But a spokesman for the UK Department for Work and Pensions said universal credit claimants are “comfortably managing”.
“The reasons for rent arrears are complex and to link it to welfare reform is misleading,” he said.
“In many cases tenants are already behind with their rent before they move onto universal credit.
“Our research shows that the majority of Universal Credit claimants are comfortable managing their budgets, and that after four months, the proportion of claimants we surveyed, who were in arrears at the start of their claim, fell by a third.”
Are you struggling to survive on universal credit? Get in touch at firstname.lastname@example.org.