Sadiq Khan calls for immediate pause to universal credit rollout as ‘chaotic’ system pushes thousands into hardship

The Mayor of London has urged the government to immediately pause its rollout of universal credit, warning that the new benefit system risks pushing thousands of Londoners into destitution.

Now claimed by more than 135,000 Londoners, the new benefit has been hampered by cuts to funding, IT problems, late payments and a lack of support in navigating the complex claim process, Sadiq Khan said.

He said funding cuts to universal credit were forecast to result in a £250m decrease for claimants in London per year by 2020/21.

The would cause “considerable disruption” to many and pushing some to the brink of homelessness, he added.

Figures from Tower Hamlets Council show that 80 per cent of its tenants who were claiming universal credit were behind on their rent in April this year, compared to 35 per cent of those who are still claiming housing benefit. The average arrears of those on universal credit was more than seven times higher than those on housing benefit.

Croydon, Hounslow, Southwark and Tower Hamlets councils revealed that last year rent arrears across the boroughs had reached £8m since the scheme was rolled out, leaving more than 2,500 tenants at risk of eviction.

Next year the government is due to start moving more than two million people nationally from six benefits schemes to the new system. This will include more than 750,000 sick or disabled claimants.

Mr Khan warned that many of those with the most severe disabilities and long-term health conditions, including up to 122,000 in London, may need more intensive support.

“We all want a simpler, fairer benefits system that improves the incentive for people to work, but universal credit, in its current form, falls well short of that,” he said. “The benefits system has to be supportive and flexible enough to deal with complexity of people’s lives, but we have already seen the shortcomings of the new system causing significant hardship to Londoners most in need of support.”

Research by the Child Poverty Action Group (CPAG) earlier this month found that claimants were losing out on hundreds of pounds a year because of the system’s failure to understand when and how people were getting paid.

One in 20 cases analysed were hit by problems with the monthly assessment system, leading the charity to warn: “Universal credit isn't working for working people”.

Alison Garnham, chief executive of CPAG, echoed the mayor's comments.

“In time half the country’s children will be in a household claiming universal credit so we have to get this right," he said. “Now is the time to pause the roll out, re-visit its design and restore the funding that’s been taken out of universal credit. If that doesn’t happen, the policy will roll-out more misery to hard-pressed Londoners and its capacity to make work pay will be undermined.”

Mr Khan warned that if the government did not change its tack, the “chaotic implementation” of this system risked causing considerable disruption to the lives of thousands of Londoners.

“I urge the government to pause its rollout of universal credit until it is fit for purpose and encourage ministers to acknowledge the yawning gap between the way the scheme is supposed to work and the harsh realities experienced by those claiming it,” he said.

A DWP spokesperson said: “Universal Credit replaces an out-of-date, complex benefits system that often trapped people in unemployment. Universal Credit provides claimants with personal support and is helping to get them into work faster and they are staying in work longer.”