THE full impact of the new Universal Credit (UC) benefit system on East Lothian has been laid bare in a shocking new report that shows that nearly three-quarters of all tenants on UC in the county are living with rent arrears.

More than 2,500 council tenants (30 per cent) were shown as having rent arrears at the end of December last year.

But a staggering 72 per cent (1,015) of local authority tenants on UC were in arrears, owing close to a million pounds (£981,745.63) to the local authority.

The period since the new combined benefit system was introduced was described by a council official as “extremely challenging”, adding that the system had created an “unprecedented” amount of work that had “really tested the resolve of those working to address the impact”.

The sobering figures were highlighted in a report to the council’s policy and performance review committee on Wednesday by Kenny Christie, the council’s service manager – revenues and welfare support.

UC was created by the UK Government as a replacement for six separate benefits: child tax credit, housing benefit, income support, jobseeker’s allowance, employment and support allowance, and working tax credit.

East Lothian was the first area in Scotland to be introduced to Universal Credit Full ‘Digital’ Service (UCFS) by the Government’s Department for Work and Pensions (DWP) in March 2016.

But since the introduction of UCFS in East Lothian, there has been “a significant rise” in rent arrears, the report says.

In 2016/17, one year after the introduction of UCFS, tenant rent arrears increased by nearly 30 per cent, from £1,295,782.60. The figure has continued to rise and up to the end of the third quarter in this financial year sat at £1,721,245.80.

In the report, Mr Christie said: “Rent collection has been affected severely by UCFS and it has been difficult for rent income staff to provide the level of support needed for UC claimants whilst at the same time ensuring all tenants in need of financial assistance are given the attention required.

“The last two years on UCFS have been extremely challenging.”

This was, the report said, in stark contrast to the picture which had existed before the introduction of UCFS, with significant decreases in tenant rent arrears in both previous financial years.

Mr Christie added: “The additional work generated by UCFS has been unprecedented and has really tested the resolve of those working to address the impact.”

However, the picture is beginning to improve, the report states, with East Lothian Council doing what it can to try to help those struggling.

Mr Christie said: “By deploying additional resource to bolster the team’s early intervention approach, council tenants are receiving much-needed help and support throughout the early stages of their UC claim and during any subsequent periods of change where UC payments may fluctuate or tenants’ financial circumstances change.”

But he added: “Rent income staff are continuing to discover the vulnerability of some tenants and residents, as many previously received maximum housing benefit and there was not always a full awareness of their circumstances e.g. mental health issues, addictions, literacy, numeracy and financial difficulties. . . there are still significant problems which remain unresolved.”

East Lothian MSP Iain Gray said: “These statistics appear to reinforce the widespread view that UC is not working as intended.

“Following the introduction of Scottish payment choices, claimants in Scotland are now able to choose to receive their support fortnightly rather than monthly, and can also ask for their rent to be paid direct to their landlord.

“However, many of the core problems with the implementation of UC still remain and these must be addressed by the UK Government.”

A DWP spokesperson said: “The best way to help people pay their rent and to improve their lives is to support them into work and under UC people are moving into work faster and staying in work longer than the old system.

“The majority of claimants are comfortable managing their money but we are increasing support to help people who need it to stay on top of their payments. Up to 100 per cent benefit advances and direct rent payments to landlords can be provided. We also recently removed the seven-day waiting period from new claims and will be paying people’s housing benefit for two weeks while they wait for their first full UC payment.”

It is not just rent arrears that have been impacted by UC.

East Lothian Foodbank reported that problems with UC had “contributed significantly” to the rise in referrals since April 2016, with the average number of monthly food parcels up more than 25 per cent.

Peter Dicker, manager of the charity, said two of the three most common reasons for referral were benefit changes and benefit delays.

Universal Credit stats from December 2017