BY LAURIE CHURCHMAN
Five South London boroughs are among the worst hit by the roll-out of a new benefit system, a new study has shown.
The number of debt-stricken families is soaring in Southwark, Lewisham, Greenwich, Croydon and Bexley — and they are on average five times more likely to be in debt than people in Kensington and Chelsea.
The research, conducted by debt management company PayPlan using data from more than 600 of its own clients, also found in a 6,000-strong survey that universal credit fails to cover basic living costs for 80 per cent of people already in debt.
But debt-stricken South Londoners receiving the new benefit are having to borrow even more money to make ends meet.
The use of foodbanks across the area south of the Thames has rocketed as UC was introduced.
The foodbank in Lewisham has seen a 20 per cent rise in use over the past year — and the roll-out of universal credit is partly responsible, says its management.
The all-in-one UC scheme was heralded as a way to group and streamline benefits when it was rolled-out last year.
But the report’s authors heard how debtors have had to cancel household payments, miss medical appointments due to travel costs, and even go without food because the money they get on universal credit is not enough to support them.
Reverend Carol Bostridge, who runs the foodbank in Lewisham, said that after signing on for universal credit, many of those she helps are having to wait five weeks for their first payment.
“With the delay, the only way you can live is to borrow money,” she said.
“People are struggling here — even just to get food for the next few days. That’s wrong. You ought to have enough money to pay your rent and feed your kids.”
But a spokeswoman from the Department for Work and Pensions said: “Universal Credit is a force for good, providing tailored support for over 1.6 million people as they find jobs faster and stay working longer.
“We have introduced 100 per cent advance payments, direct rent payments to landlords and an extra two weeks’ housing support for people moving over. And we’re spending an additional £1.7bn per year helping people keep more of what they earn.”
He added that up to 100 per cent advance payments are available from day one of a UC claim and budgeting support is available for anyone who needs extra help.
The DWP has also removed the seven-day waiting period, pays Housing Benefit for two weeks when people move onto UC and has recently announced it will be introducing the same two-week ‘run on’ for other legacy benefits.
The government is spending an additional £1.7bn per year on UC, he added, increasing by £1,000 the amount that 2.4 million households can earn each year before their UC begins to be withdrawn.