Just over three quarters of council tenants who have been transferred to Universal Credit (UC) are now in debt by an average of £1,200.
The Town Hall is now trying to pin down if the arrears are being caused by delays in switching to the government’s new benefits system, or if claimants are simply receiving less than they were before.
Officers and councillors continued to review evidence relating to the impact of Universal Credit at a 14 February meeting of the policy and performance scrutiny committee.
Islington was one of the first local authorities to call for the new system to be scrapped altogether in December.
Hannah Bowman, Islington’s head of housing partnerships and communities, said: “In terms of the arrears that are starting to build up, they have become already significant.
“Nearly 2,000 council tenants have moved over to UC since June, and 76 per cent of those tenants are now currently in debt.
“That compares unfavourably with those on the housing benefit system already. As they move over there is a five-week waiting period, and we would expect to see arrears building in that period.
“For the council, if the debt becomes unassailable and it could get to a position where we don’t feel that we can get that debt back, it has an impact on our ability to fund services.”
Councillors met with claimants in January. Some said that they were “anxious” of being hit by sanctions if they failed to turn up to appointments which often had no way of being rescheduled ahead of time.
One claimant, a carer for her disabled child, had arrears deducted from her first payment and received a number of letters on her debt, which she found “distressing”.
Cllr Sheila Chapman (Lab, Junction), said: “I’d be interested to know whether officers are finding that it reaches the average £1,200 amount and remains static, or it goes up.
“If it remains static, I think that supports the contention that it is a five-week delay that is causing the arrears.
“If, however, that amount is going up and up, that points to people simply receiving less from Universal Credit than they did from housing benefit, and that people are struggling with budgeting.
“Budgeting we can help with, but if people are receiving less, that’s just the catastrophe built into Universal Credit.”
Bowman responded that officers will now be seeking to unpick from the emerging data what the average arrears are for a claimant related to how long they have been on the scheme.