Croydon Council seeks extra funding to manage “unsustainable” costs of universal credit. Pic: BagoGames

Extra funding is needed to stop hundreds of local families on universal credit from being made homeless, Croydon Council has warned the Government.

Croydon has over 20,000 residents in receipt of universal credit, more than any other council in the country.

Last year the council paid a total of £2 million in emergency rent money to families who would otherwise have risked losing their homes because of the delays of up to six weeks in paying the benefit. By next March that figure is set to rise to £3.1m. Some families are also said to be losing out because of the consolidation of benefits which can result in a net loss under universal credit.

Councillor Alison Butler has now written to the Secretary of State for Work and Pensions, David Gauke, to ask for extra funding to manage the “unsustainable” costs of universal credit.

In the letter, Councillor Butler highlighted that clearing each Croydon resident’s rent arrears costs £800 more this year because universal credit has caused higher rent debts through its six-week payment delay. Croydon has also helped 494 more residents than last year, an 84 per cent rise.

For 2017-18, the Department for Work and Pensions put £1.7m towards helping struggling Croydon families and the council topped that up with £1.4m from its own reserves. Now the council is asking for even more extra funding to prevent residents from being pushed deeper into rent arrears and facing possible homelessness.

Councillor Butler told East London Lines: “I feel strongly that – given Croydon is the borough with the highest amount of universal credit claimants in the country – the Government should look closely at our evidence and experience and take action accordingly.”

“We can only hope that our concerns, added to those from housing associations, charities, MPs, claimants and other councils, will make a difference.”

Universal credit was designed to simplify the benefits system by merging six existing benefits into one. The programme has been criticised for the six-week wait claimants face before their first payment and for causing rising levels of rent arrears.

The Peabody Trust estimates that nationally more than 60,000 households who are due to enrol on universal credit this month will not receive any money before Christmas.

At the Croydon council meeting last month, Councillor Butler condemned the “cruelty and hardship” of universal credit. She said: “You can see the system is wrong. The system is broken.”

Councillor Hamid Ali agreed with this sentiment. “The poorest people in our community are paying for the design flaws of universal credit with their debts, their dignity and their own anxiety”, she said.