Council chiefs say 'bad debt' due to Universal Credit yet to be an issue in South Tyneside

Housing bosses have saved almost £1million so far this year as tenants moved on to Universal Credit made better-than-expected progress with rent payments.

Wednesday, 4th December 2019, 12:35 pm
Updated Wednesday, 4th December 2019, 6:41 pm

South Tyneside Council has spent £899,000 less than it planned to in the first quarter of 2019/20 on housing, according to its latest figures.

A report for councillors said this was due to a ‘reduction in the bad debt position’ and the phasing out of the council’s ‘furnished tenancy scheme’, as well as extra rental income.

Stuart Reid, the council’s director of business and resources, said: “Housing revenue is projecting an underspend, quite a significant underspend.

“The main reason for that is we’ve set aside quite a significant provision around bad debt as a result of Universal Credit being rolled out. While we’re seeing increasing arrears that hasn’t yet materialised into increasing bad debt.”

Elsewhere, the controversial Universal Credit system has been blamed for pushing tenants into arrears.

Universal credit replaces six benefits, including housing benefit, and merges them into one payment.

It has been gradually introduced across the UK, but there are concerns that some claimants have seen their overall support cut.

Universal Credit was introduced in what the Government said was a bid to simplify the benefits system, but it has proved controversial almost from the beginning with stories of negative impacts on vulnerable people seldom far from the headlines.

The National Audit Office, which oversees government spending, found the universal credit programme was "driven by an ambitious timescale" and that it had suffered from "weak management, ineffective control and poor governance".