Friday, September 17, 2021

Universal Credit cut could lead to ‘mass homelessness’, Tories told

Eight organisations sign a joint statement urging ministers to rethink planned cuts to Universal Credit and Local Housing Allowance.

UK Government plans to cut Universal Credit by £20 a week in the autumn risks pushing more vulnerable households into financial crisis and could lead to mass homelessness, leading charities and organisations have warned.

In a joint statement from eight different organisations, including The Big Issue, the organisations argue that cutting Universal Credit and freezing Local Housing Allowance will have a devastating impact on low-income households, many of whom are already struggling to get by.

The statement also criticises the UK Government for failing to publish a full impact assessment into the planned cuts, and urges ministers to reconsider their decision.

Government ministers have so far refused calls to rethink the cuts, stating that the £20 a week increase was only introduced as a “temporary” measure to support families through the Covid-19 crisis.

The Covid-19 pandemic led to a significant rise in the number of new Universal Credit claims.

The full statement reads:

“The UK Government must complete and publish a full assessment of the impact on renters of their decisions to freeze Local Housing Allowance and cut Universal Credit, which risk pushing many households into poverty, problem debt, and homelessness.

“In the wake of the pandemic, we saw bold and swift action from the Government to prevent a housing debt crisis including restoring Local Housing Allowance rates to the 30th percentile of market rents and increasing the Universal Credit Personal Allowance.

“With the economic impact of the pandemic increasing the financial strain on families, across the country the number of private rented households in receipt of the housing element of Universal Credit increased by 107 per cent between February 2020 and February 2021.

“Over 55 per cent of these households have a shortfall between the housing support they receive and the rent they have to pay.

“The UK Government has confirmed that where such shortfalls exist, the median amount is £100 a month. This points to a need for continued support for families and individuals to cover the cost of rents.

“Yet since April this year, Local Housing Allowance has been frozen in cash terms, and later this year, Universal Credit will be cut by £20 a week.

“Whilst the Institute for Fiscal Studies has described changes to Local Housing Allowance as ‘arbitrary and unfair’ we have seen no assessment from the UK Government of the impact either of these policies will have on the capacity of recipients to cover rent payments.

“As organisations representing landlords, letting agents, tenants, people facing homelessness, and debt advice services, we are united in calling on the UK Government to complete and publish a full assessment of the impact of both of these policies on the ability of renters to meet their housing costs.

“We believe that the UK Government should reverse its decisions to cut Universal Credit and to freeze Local Housing Allowance.

“To apply policies like these without doing any meaningful impact assessment is, we argue, lacking the necessary foresight and consideration of the impact they will have on people’s security of tenure and well-being and for many will threaten their chance of recovery.”

The Big Issue has launched a new campaign in the hope of preventing ‘mass homelessness‘ that may be caused as a result of the cuts.

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