Universal Credit delay: A reaction to bad figures?

kamsandhu —  July 23, 2013 — Leave a comment

In a fresh blow to the government’s welfare ‘shake up’, the planned “national roll-out” of Universal Credit has been hit by delays, with the changes only being pushed out to six new areas in October this year.

Image: gov.uk

Image: gov.uk

The new system was initially meant to have been launched nationwide in October. However, the government have decided to delay a national launch and carry out further localised implementation in another 6 areas.

After the announcement was made last Wednesday, Shadow Work and Pensions Secretary Mr Byrne delivered a scathing account of the coalitions attempts to create a better welfare system:

“Today, we have final confirmation the welfare revolution we were promised has collapsed.”

“Two weeks ago, we learned the Work Programme was a total failure, now we learn Universal Credit has become the biggest white elephant in Whitehall…Iain Duncan Smith must now ask himself if he is fit for purpose.”

Shadow Work and Pensions Secretary Liam Byrne Image: The Guardian

Shadow Work and Pensions Secretary Liam Byrne Image: The Guardian

However, Work and pensions Secretary Iain Duncan Smith has defended the government’s decision to delay the roll out. According to the BBC, when asked about the cautious launch, Iain Duncan Smith said he was “determined” to get the Universal Credit scheme right, and didn’t want to follow the old ways of governing – “launching with a bang and then having to clear up the mess afterwards”.

Although the Labour party have quickly jumped on the offence, using the delays to criticise the current government’s ability to change the welfare system, it seems the coalition’s caution is well based. Last week the latest changes to the welfare system, including the introduction of the bedroom tax, were highly criticised by the National Housing Federation.

The National Housing Federation, accused the new implementation of the bedroom tax of causing “real chaos” and “damaging people’s lives.”

The comments come as recent research carried out by the federation has found that more than 10 per cent of housing association tenants in one area of England fell into rent areas within just one month of the bedroom tax being introduced.

National Housing Federation have criticised the welfare reforms and the bedroom tax

National Housing Federation have criticised the welfare reforms and the bedroom tax

In Teeside, one of the areas worst affected by the bedroom tax, there have also been reports of three bedroom houses laying empty. The Local Authority have said they can’t rent the properties out as they are too big and people simply “can’t afford to move into them“.

The extra cost of bedroom tax (£14 per week for each room), coupled with the rising costs of living and the benefit cap means that for many, the only option is to move into smaller properties or risk missing rent payments.

Similar trends are being seen in the initial test areas up and down the country, as people start to feel the full effect of the bedroom tax. Rent arrears have risen an astonishing 340 per cent in East Ayrshire and 146 per cent across the whole of South Wales.

Speaking to the BBC, Chief Executive of the NHF, David Orr, warned that the changes to the benefits system were stopping the federation using the housing in the way in which they needed to use it and was “saving no money for anyone, anywhere.”

Although the government have said that the changes should save around £500m a year in benefit payments, councils across the country are already reporting millions of pounds of rent not being paid.

A report by LSL, an estate agency group, shows that in the last quarter alone severe rent arrears have increased by 3.3 per cent in the private rented housing sector. This equates to around 98,000 households being more than two months behind on rent.

Chief Executive of the NHF, David Orr has said that the government was warned by housing associations of the problems that the bedroom tax would create: “Housing associations warned the Government from the start that the bedroom tax would not work and that families would face financial hardship and struggle to make ends meet.

Continuing, he stated that he believes the government should not only delay the policy, but scrap it all together:

“The reality is that many people will stay in their homes and will be forced to live on less money in a country where living costs and utility bills are rising.

“It is time to face the facts and repeal this unfair policy now.”

CGA

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