Number of Luton residents claiming Universal Credit 'increased nearly tenfold at start of coronavirus pandemic'

The number of people claiming Universal Credit in the town increased almost tenfold at the start of the pandemic, the borough council’s scrutiny health and social care review group was told.

It rose from 549 in March to 4,233 in April, based on Luton’s low income family tracker, according to a report to councillors.

“The largest group profile of someone worse off under Universal Credit would be a single person, not in work and living in any form of housing,” said the report.

The total caseload is 20,865 claimants, which is more than we expected, explained head of revenue and benefit Clive Jones.

“We thought the number would be around 19,000 and I can only assume that’s the massive impact of Covid-19, despite lots of support with the furlough scheme to keep people in employment.”

Of 3,537 claiming council tax reduction, 2,225 are low income families in poverty, he said.

“And 844 have a cash shortfall, so three per cent of our claimants on council tax reduction and on Universal Credit don’t have enough income to pay their rent every week, let alone buy anything for food.

“That’s quite an impoverished group of people. They will be a subset of the 2,225.

“Of that number, 1,210 on Universal Credit are in council tax arrears.”

There were 378 households moved off housing benefit on to Universal Credit which no longer appear as council tax reduction claimants.

“They just dropped off the map,” added Mr Jones. “They were impoverished before they moved on to Universal Credit and were getting council tax reduction automatically.

“So either they won the lottery or they’ve moved out of the area, which is a possibility.”

From December, a managed migration of housing benefit claimants to Universal Credit will begin nationally, explained the report to the review group.

“It’s estimated to start in Luton in the summer of 2023,” added the report, but the pandemic might delay that timetable.

“There’s been no news on that recently,” said Mr Jones. “The overall roll out started in October 2018.

“About 64 per cent of households when they migrate are worse off and 33 per cent are better off.

“I’m sure there will be another peak of claimants in the next six months,” he warned.

“Council rent arrears have increased from £1,117,000 at the end of March to £1,528,000 at the end of October.

“As social landlord, we used to pay ourselves rent out of benefit from claimants.

“Universal Credit has taken £3.2m away because it’s paid directly to the tenant and not the landlord.

“The housing team have to chase the claimants to make an alternative payment arrangement, or just have to go after the amounts due, because we’re not getting the money through housing benefit now.”

Free school meals claims had been expected to drop by ten per cent, but have increased by 15 per cent.