New benefit leads to £1.3m debt owned to Wigan Council

Wigan Town Hall
Wigan Town Hall

The roll-out of Universal Credit in Wigan has had an impact on rising rent arrears, with more than £1.3m owed to the town hall, officers have said.

The figures have prompted council bosses to warn of ‘tough times’ ahead as knock-on effects of the controversial welfare reform are realised.

Figures revealed in a committee report show the number of social housing tenants claiming UC has risen to almost 2,800 since its full roll-out in April.

During the same period, the arrears value attached to UC cases increased by £841k to £1.36m.

A working group has been established – including representatives from the council and partner organisations – to provide support for UC claimants, councillors have been told.

But officers warned of further challenges, with the delay between claiming UC and then receiving payment highlighted in the town hall report.

Speaking at a housing advisory panel meeting last week, Jo Willmott, council assistant director for provider management , said: “There’s no easy solutions but we’re coming together to put the individual and the family first, that’s the only way we’re going to address some of those very challenging situations.

“It’s about engaging with the reality of people’s lives, people are having tough, tough times at the moment and that’s where as an organisation we’ve got to wrap that support around them.”

The half-year performance report on housing services said total arrears has increased to 8.1 percent, a 1.3pc increase compared with the same point the previous year.

“Although arrears are increasing, and this is clearly a concern, the value of written off debt remains well below the budget provision,” the report said.

However, the ‘continued rise in UC cases’ was highlighted as a ‘contributory factor’ in rising rent arrears.

The report added: “Wider welfare reforms across a range of benefits are impacting on tenants’ income as well as the increase in zero hours contracts and agency/part-time work which lead to unstable incomes.”

Lesley O’Halloran, assistant director for customer services, told panel members the working group – which meets twice a month – is creating measures to mitigate the impact of UC and develop practical interventions with the consequences of the welfare reforms about to ‘ramp up.’

“We’re trying a number of different avenues to address everything; it is across a lot of the council’s departments,” she said.

Wigan council was part of a pathfinder trial for the flagship Tory welfare reforms, starting in 2013.

Town hall bosses have previously said it meant they were ‘much more prepared’ for the full roll-out and had enabled them to flag up problems with the scheme to central government.

The new system combines several benefits into one payment but has received criticism that it causes hardship.

Coun Terry Halliwell, cabinet member for housing and welfare and chairman of the housing panel, said: “We do work with very vulnerable tenants to make sure we can help as much as we can but without doubt, UC is up there with how it’s going to impact on our tenants.

“About a third are on benefits, about a third are on partial benefits and about a third are working. It’s going to have a huge impact on them.”