Thousands of people on Universal Credit in Wigan are behind on their council tax bills – leaving millions unpaid.
Some 3,166 claimants are in arrears, with the authority missing out on £2.2m in tax in 2018/19, JPIMedia Investigations can reveal.
The town’s Labour MP Lisa Nandy said she was “deeply concerned” Universal Credit is “pushing thousands of people into debt”.
Wigan was one of the first places to get Universal Credit, which replaces six individual benefits.
Those who are moved onto Universal Credit face a five-week wait for their first payment, which Wigan’s housing and welfare boss, Labour councillor Terry Halliwell, said was a “major factor” in people falling behind on their council tax.
He also said there had been a rise in food and fuel poverty, with children throughout the town suffering as a result.
Coun Halliwell said: “When we were piloting Universal Credit we told ministers of the potential problems they would expect to be faced with, but in some cases they simply didn’t listen to all of our concerns and, as far as I’m aware, they did not act upon them.
“I would say that the roll-out has been lumpy at best and the continuous delays in implementing it is a testament to the problems associated with it, and I personally think it desperately, desperately needs reform.
“That five-week wait is crippling; the insistence of making and managing a claim online can be difficult for lots of people; some of the sanctions are counter-productive for minor infringements. I could go on in respect to all the other issues.
“The way it has been managed hasn’t been very good.”
The Department for Work and Pensions (DWP) insisted Universal Credit is a “force for good, providing support to more than 1.8 million people”.
It added: “Universal Credit gives people control over their finances and helps them into work. Council tax collection is an issue for the local council.”
The £2.2m unpaid council tax is a fraction of the £160m in funding cuts faced by Wigan Council since 2010, but Coun Halliwell said that “arrears due to Universal Credit are being felt by all councils”.
He said the authority tries to collect a minimum “very small payment” from those who owe.
When asked if the arrears have had any impact on local services, Coun Halliwell said: “I wouldn’t say as yet. We are trying to manage that situation carefully; absorb some of what is going on; work with those people affected by Universal Credit by trying to get back that money that is owed to us through the different arrangements, and all that is dependent on individual circumstances.”
Ms Nandy said the council has “rightly” chosen not to “force people into destitution or threaten them with court action while the Universal Credit system remains in chaos”.
“That decision is the right one, but it comes at a cost,” she said.
“Ministers should not be moving people into a system that isn’t working.”