Universal Credit Roll-out Could Add To The Black Economy

Cllr Emma Daniel

Major reforms to benefit payments need to be put on hold and revised or risk creating a black economy for just about managing families pushed into destitution, a councillor has warned.

Cllr Emma Daniel is the latest voice calling for the roll-out of Universal Credit (UC) to be put on hold warning the changes could lead to increased malnutrition, crime, homelessness and the use of loan sharks.

She also warned it could be detrimental to domestic abuse victims and lead to social cleansing of more affluent areas of the city.

Introduced for some single people in Brighton and Hove in December 2015, Universal Credit (UC) is due to be extended to families in Hove in October and in Brighton a month later eventually impacting more than one in six households.

Calls for the roll-out to be delayed while issues from pilot areas are resolved have been widespread.

The Association of Retained Council Housing, which includes Brighton and Hove City Council, called on the Government to halt the roll out of UC and remove the seven day wait period for new claims.

Citizens Advice has also made the call, publishing a survey showing three in five recipients were borrowing money while waiting for their first payment.

More than a third of residents wait more than the six weeks for their first payment, one in ten applicants over ten weeks.

UC, which merges six benefits into one, has been rolling out across England and Wales since 2015 but the gradual roll-out is now being increased ten-fold.

Brighton and Hove City Council has set aside £208,000 from the recent budget underspend for third sector partners to offer support for those likely to be affected.

The authority’s welfare reform programme has already helped more than 600 families and residents with benefit changes with financial support of more than £2 million in two years.

Cllr Daniel, neighbourhoods committee chairwoman, said: “Because of the delays on top of the built-in delays to the scheme, there is the potential for a family with young children to be waiting eight weeks or more for any income at all.

“There’s an obvious risk of increased malnutrition and homelessness but also less obvious risks of people turning to loan sharks to fill that destitution gap and the creation of a black economy to get by.”

A DWP spokeswoman said: “Universal credit is designed to mirror the way many people in work are paid, we have budgeting advice and benefit advances available for anyone who needs extra help. The vast majority of claimants have told us they are satisfied with UC. We are rolling out universal credit in a gradual, safe and secure way.”