The ObserverUniversal credit
Revealed: How universal credit is fuelling Britain's homelessness crisis
Observer investigation finds system in chaos, putting chancellor under pressure to change tack
A homeless man on the streets of Birmingham. Photograph: Christopher Furlong/Getty Images
Jamie Doward, Amy Walker and Michael Savage
Sat 27 Oct 2018 19.14 EDT
First published on Sat 27 Oct 2018 15.30 EDT
Government welfare reforms are fuelling a rise in homelessness in towns and cities across the country, an Observer investigation has found.
Interviews with homelessness charities across England reveal a support system in crisis as the rollout of universal credit and freezes to local housing allowance rates put even basic accommodation beyond the means of many. One shelter said universal credit was a factor in a third of its clients ending up in its care.
The findings put more pressure on the chancellor, Philip Hammond, as he prepares to unveil Monday's budget. On Saturday night, Tory and DUP rebels threatening to force the government into a rethink over universal credit claimed that they had secured a £1bn injection for the programme.
Last week, the Commons public accounts committee said universal credit was responsible for increased debt, rent arrears and food bank use.
But it has also emerged that it is a significant contributor to both "invisible" homelessness – such as people "sofa-surfing" or living in emergency accommodation – and rough sleeping.
"Universal credit is a major issue for us now," confirmed Malcolm Page, assistant director of homelessness services at the Salvation Army. "We are seeing an increasing number of people experiencing real problems with the way universal credit is working for them," said Bill Tidnam, chief executive of Thames Reach, which runs homeless hostels across London. "To make and manage your claim, it is necessary to have reasonable computer literacy and access to IT and this is a barrier for many of our service users."
Around 80% of people moved on to universal credit are in arrears before receiving the payment, which takes up to eight weeks to come through. "What this means in practice is that some people can't pay their rent and lose accommodation and they stay homeless for longer because they are seen as risky by landlords," Tidnam said.
We've got about 60 clients who are currently on universal credit and 20 of them have become homeless since being on it
Jonathan Billings, Wellspring charity, Stockport
A National Audit Office analysis of one area where universal credit was rolled out shows that rent arrears for claimants jumped significantly after its introduction. The NAO stated: "In the Hastings area, a property agent told us that only one in 10 private landlords using their agency in the town will rent to benefit claimants."
Annie Whelan, chief officer at the Sea View homeless charity in Hastings, said: "We've seen a sharp increase in street homelessness and in the first three months of this year we verified 120 different individuals. On any given day we're seeing 49 people rough sleeping now. Last year it was more like 40."
Jonathan Billings, chief executive officer at The Wellspring charity in Stockport, said universal credit was having an impact in the Greater Manchester town even before it was fully rolled out.
"We've got about 60 clients who are currently on universal credit and 20 of them have become homeless since being on it," Billings said. "It's been a contributing factor [to their homelessness], not always the direct cause. Of those 60, 20 have become homeless and the other 40 have all gone into debt – housing arrears, utility accounts, payday loans."
Denis Tully, chief executive of the Emmanuel House in Nottingham, one of 10 local and five national homelessness charities interviewed by the Observer, agreed: "There has been a rise in homelessness in Nottingham and the main driver of this increase is welfare reform."
Why are so many people sleeping rough on Britain's streets?
Rick Henderson, chief executive of Homeless Link, the umbrella body for homelessness charities, said hostels were struggling to move homeless people into more stable accommodation because their housing allowance was not matching spiralling rents in the private rented sector.
"Welfare reform, specifically the cap and freeze on local housing allowance rates, compounded by high housing costs, are restricting the options available," said Henderson.
As a cold snap brought snow and ice to some parts of the country, charities expressed concern about the coming winter. "The sad fact is that every night, thousands of people across the country are sleeping rough in doorways, bus shelters, or on public transport," said Matt Downie, director of policy and external affairs at Crisis. "We don't have enough affordable housing that homeless people can access and we don't have a strong enough welfare system to support people when they fall on hard times."
On Sunday, the cross-party Commons work and pensions committee called for the roll out of universal credit to be halted.
"Universal support is not universal, and it hasn't been offering much in the way of support," said committee chairman Frank Field. "The Department for Work and Pensions must not push one more claimant on to universal credit until it can show that it will not push them over the edge."
The Department for Work and Pensions said it had introduced changes to ensure people would not suffer as a result of the credit's introduction. The Ministry of Housing, Communities and Local Government said £1.2bn was being invested to tackle homelessness and that legislation introduced in April would get help to people sooner.
"Through universal credit, we want to see people who are homeless getting the support they're entitled to, moving into a home and eventually supporting themselves through work," said housing minister Heather Wheeler.
Tory and DUP rebels who have been demanding the full restoration of £2bn in universal credit cuts made by former chancellor George Osborne said they believed Hammond would heed their calls for more money.
"There is now talk of money, but we are fighting to make sure we get what is necessary to take universal credit back towards where it was," said one rebel. "We may not get there, but we should push it towards it."
It is understood that the budget will introduce new measures to protect those in debt from creditors. A "breathing space" will be increased from six weeks to 60 days, giving them more time to get their finances in order.