Universal Credit rollout will increase poverty

Government must rethink the roll out of Universal Credit (UC) to Liverpool, before more people are plunged into debt.UC front cover

I’m backing the call from Liverpool Council Mayor Joe Anderson and community leaders for Work and Pensions Secretary Esther McVey to act.

Last year Liverpool City Council made more than 13,000 crisis payments to assist people with the cost of food, fuel and clothing.

The continued rollout of Universal Credit in the city in its current form will lead to more people going into crisis, experiencing extreme hardship and the risk of homelessness.

The council reports an increase in council tax arrears from those who have already transitioned to UC and lengthening queues at our foodbanks.

Around 55,000 Liverpool households will eventually move on to Universal Credit. People with disabilities, the long-term sick, single parents and working families on low incomes are amongst those disproportionately affected.

Simply put, if UC continues in its current form, people in Liverpool already facing enduring hardship will be left with even less. Levels of debt will rise, rent arrears will increase, families will be forced into food and fuel poverty and ultimately hardworking people will face the spectre of homelessness and destitution.

The council-backed report Universal Credit: Unintended Consequences highlights warnings from the Bishop of Liverpool, Rt Rev Paul Bayes, the chief executive of The Women’s Organisation, Maggie O’Carroll and the chief executive of the city’s Chamber of Commerce Paul Cherpeau.

The report is being presented to ministers with a demand to cut the wait between applying for UC and receiving payment. Currently applicants have to wait up to 35 days without any money.

It also calls for councils to be given more ring-fenced funds to provide a ‘local welfare scheme’ based on local needs and an end to the 30-40 minute waiting times for connection to the Department for Work and Pensions advice and information phonelines.

Liverpool City Council spends £23 million on a range of crisis issues surrounding poverty and homelessness and offers a range of crisis payments and housing support above and beyond the statutory threshold. In stark contrast, the council will have experienced a £444 million reduction in its funding from central government by 2020 since 2010.

The National Audit Office recently urged ministers to ‘pause’ the roll-out of UC, with figures showing 40 per cent of claimants experienced financial difficulties transitioning to the new benefit, with a fifth of claimants not paid on time.

Esther Mcvey must urgently listen to these voices of concern and act today. I will be seeking to raise this in Parliament when the session resumes in two weeks.