Mr Iain Duncan Smith the Work and Pensions Secretary, admitted to Parliament yesterday that the Universal credit system was not yet ready for couples who make a claim.
This was after a storm on Sky News using NLA figures showing that the number of landlords letting to people on benefits has crashed from 46% to just 22% in the last three years. 52% of landlords say they would not consider letting to someone on benefits and 70% of those who do have experienced rent arrears in the past 12 months averaging £3,000 each.
Universal credit has been widely criticised in all the pilot areas it has been rolled out in by landlords. In every area it lead to a significant increase in rent arrears largely because tenants are now responsible for their own household budgets with housing benefits not being paid directly to landlords.
Mr Duncan Smith told Parliament that reforms were on track despite delays and writing off more than £40m worth of software designed for the new Universal Credit with a further £90m of equipment that would be worthless in five years’ time.
MPs on the Commons work and pensions select committee were told that claims by couples had to be handled manually because the computer system could not cope as it was designed for single adults and had not been configured for couples or claimants with children.
Mr Howard Shiplee, the former London Olympics executive who was brought in this year to trouble shoot, told the MPs that problems arose if a single claimant met a new partner and moved in with him or her. He said “As the potential for claimants to change circumstances, for things to change … the more complicated it becomes.
“Therefore the next stage is to work on couples. That will be a complicated issue. Couples come together, they divide, they have children, things happen.”
“This sort of software is not something you get on the back of a cigarette packet. It’s complicated.”
Mr Duncan Smith claimed the scheme’s assets were worth £152m and Universal credit could ultimately boost the economy by up to £38bn over ten years by moving claimants off benefits.
It was confirmed last week that the 2017 target for the full introduction of Universal Credit will be missed with 700,000 claimants facing a longer wait.