Citizens Advice: Universal Credit expansion ‘disaster waiting to happen’

The expansion of Universal Credit is a ‘disaster waiting to happen’, according to government’s flagship welfare reform.

New findings have shown that Universal Credit is pushing people further into debt.

The Citizens Advice charity says the government’s plans to accelerate roll-out of the benefit from five to 50 areas a month from October could have catastrophic consequences, as there are still many problems with the system.

These challenges, and the pressure of these challenges on public services, also undermine the good intentions behind Universal Credit and risk preventing it from living up to promise.

A new report by Citizens Advice analyses over 50,000 cases where it has helped people with their debt problems and found that for those on Universal Credit: 79 per cent have priority debts such as rent or council tax, putting them at greater risk of eviction, compared to 69 per cent on legacy benefits such as Jobseekers Allowance; 41 per cent have no money available to pay creditors as their monthly spend on vital living costs is more than their income; and typically people on Universal Credit only have around £3 a month left to pay creditors.

Citizens Advice is urging the government to make sure no one applying for Universal Credit waits longer than six weeks for an income, and that anyone who needs it gets a payment within two weeks that they do not need to repay.

It is also renewing its call for the rollout of Universal Credit to be paused until problems with the benefit are fixed and for the government to make sure support is in place to help people adapt as they move onto the new benefit.

The report comes after research the charity released in July which revealed 39 per cent of people turning to it for help with Universal Credit are waiting more than the six weeks it should take to receive their first payment, with 11 per cent waiting over 10 weeks.

Gillian Guy, Citizens Advice chief executive, said: “The roll-out of Universal Credit is a disaster waiting to happen.

“While the principles behind Universal Credit are sound, our evidence shows that if the government continues to take this stubborn approach to the expansion of Universal Credit, it risks pushing thousands of families into a spiral of debt, and placing an even greater strain on public services.

“People face severe consequences - like visits from bailiffs and eviction - when they can't pay their bills. But government can help protect these households by taking the simple step of pausing Universal Credit and fixing the underlying problems, so families are less likely to fall into arrears. The government should also ensure that everyone has access to the support they need to adapt to Universal Credit.”