Tower Hamlets charity claims Universal Credit is plunging poor families into further poverty
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The rollout of the government’s controversial new benefits scheme is plunging huge numbers of households in Tower Hamlets further into poverty, charities and politicians have claimed.
Tower Hamlets First Love Foundation said it has seen a “significant spike” in people using their services since the rollout of Universal Credit.
Its workers say condensing benefits in one payment is a good idea, but the system needs to be managed better and has been working with the DWP and JobCentrePlus to help resolves the issues people are facing in Tower Hamlets.
The charity, which runs a food bank and helps people in need with advice, said workers have seen families being forced to live in one bedroom after renting out other rooms in their home to make ends meet.
In another case a man with mental health issues has not received any benefits for nine months after repeatedly being sanctioned under the tough new scheme.
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Hundreds of households have also fallen into rent arrears, charities have said.
“We are heading towards a real crisis,” said First Love CEO Denise Bentley.
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“People are accessing our services just because they have been put on Universal Credit and can no longer afford to survive essentially.
“We have seen a family of four all sleeping in one bedroom and subletting their living room just so they can pay their rent. There has been a significant spike in people coming in since the rollout started.”
Universal Credit is designed to replace six means-tested benefits and tax credits – Jobseeker’s Allowance, Housing Benefit, Working Tax Credit, Child Tax Credit, Employment and Support Allowance and Income Support.
The Department for Work and Pensions (DWP) claims Universal Credit “simplifies an out-of-date, complex system “and has been rolling it out across the country since 2013.
It started running in the E1, E3 and E14 postcodes in July, and is due to start in E2 in October.
Universal credit applicants have to wait one month from the date they submit an application before receiving their first payment.
Payments are then made monthly in arrears and can be stopped if someone fails to abide by rules set out by the DWP.
Sanctions can be handed for things such as refusing a job offer or reducing work hours.
Payments can be stopped for up to three years for people who repeatedly break the rules.
A hardship fund is available to claimants who have been sanctioned, but this money must be paid back when benefits start up again.
The system has been plagued by hold-ups caused by the “complicated” application forms.
Debbie Pemberton, development programme manager at First Love, said: “When Universal Credit first came in we saw a lot of older men come through the door. Some had poor literacy skills, others had no idea how to use a computer.
“By the time they found somewhere they can get help and then got through the application process it is at least three weeks. And then they have to wait the month for the first payment. “These are people without saving, without any money at all. Something like that has a real impact on the way they live.”
Tower Hamlets Council has set aside £1million to help deal with fallout from the introduction Universal Credit.
The borough’s mayor John Biggs has admitted the benefits change has been “a nightmare” since it was introduced into most of the borough last month.
“We have already seen some pretty big problems with people getting into rent arrears,” Mayor John Biggs said.
“The system doesn’t take into account the chaotic lifestyles some of these people may lead. They need to be computer literate and have to fill in some quite complicated forms.
“There is now enormous pressure on the council advice teams who are having to deal with the problems people are having. It’s been a nightmare.”
There are more than 12,000 claimants so far in the borough and over a third of them are in employment, according to the latest government statistics.
The £1n set aside to plug the gap caused by Universal Credit is part of a £6.7m council fund to help tackle poverty between now and March 2021.
A Tower Hamlets Council spokesman added: “The fund is also designed to create projects to help people to improve their financial circumstances for the longer term through exploring work opportunities and other tailored support.”
A Department for Work and Pensions spokesman said: “Universal credit simplifies an out-of-date, complex system with evidence showing that under UC claimants are getting into work faster and staying in work longer.
“We are working closely with local authorities as we roll it out and have invested up to £200m in universal support which provides budgeting advice and digital support, delivered by local authorities in collaboration with Jobcentre staff to assist with this transition.”
“We are rolling Universal Credit out across the country and continue to listen to feedback and make any necessary improvements with our ‘test and learn’ approach.”
First Love Foundation can be contacted on 020 3069 9877 or online at firstlovefoundation.org.uk.