Fears Universal Credit problems could add to £2million rent arrears in South Tyneside

The new benefit system came into operation in South Tyneside in May - with 1,200 claimants currently registered with housing provider South Tyneside Homes (STH).

With STH taking on 250 new claimants a month, housing bosses have raised concerns about the impact of Universal Credit on arrears - which have been on the rise since the start the year.

Councillors have backed calls for a study into the long-term impact of welfare changes as it was revealed STH is has a rent arrears backlog of £2.055million.

Coun Jim Foreman told a meeting of South Tyneside Council’s Housing Committee: “£2million is a huge amount of money, especially for this borough.

“The Tories have denied that food banks have an impact on social inequality. That’s an out and out lie.

“If it wasn’t for the food banks, a lot of these people wouldn’t be in a home.

“There has already been a huge impact with Universal Credit.”

Universal Credit was introduced in 2013 and was intended to replace six “legacy benefits” - including unemployment benefit, tax credits and housing benefit.

It is expected to be rolled out to around seven million people by 2022-23 and has been criticised for putting poorer claimants at heightened risk of hunger, debt, rent arrears and homelessness.

Latest Government data shows that the new benefit system has been rolled out to more than 50,000 in the North East.

Currently, South Tyneside residents claiming the benefit include new claimants or those who have had a change in circumstances.

With ‘Trusted Partner’ status from the Department of Work and Pensions, housing costs are paid directly to South Tyneside Council.

To manage demand and arrears, housing bosses are looking to introduce software to monitor and prioritise arrears cases in the borough.

Following discussion, councillors agreed back a probe into the effects of Universal Credit which will link into the council’s new integrated housing policy, which is set to roll out next year.

The commission will also gather evidence on the impact of the welfare changes in anticipation of the “year on year” impact in the borough.

Chris Binding , Local Democracy Reporting Service