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Council highlights shocking errors in Universal Credit payments


The latest figures from Tower Hamlets Council reveal that 539 Universal Credit (UC) cases were referred back to the Department for Work and Pensions (DWP) over concerns with accuracy.

In one particular case council staff alerted the DWP to one error which saw a resident being underpaid by £8,000, the equivalent of £154 per week.

The total value of underpayments identified by Tower Hamlets Council and referred to the DWP stands at £150,000.

The error-ridden UC system has also seen staggering overpayments, where residents have been paid more than their entitlement. In one particular case, council staff notified the DWP on behalf of a resident that Universal Credit was being overpaid. It took 7 notifications and escalation requests before the matter was resolved, but by then the resident had been overpaid by over £18,000.

A further case saw the council notifying the DWP that a resident was incorrectly being paid UC as the family had three or more children. This error should have been identified by the DWP’s own systems, yet the resident was overpaid by over £25,000.

The figures also show that 1 in 6 Tower Hamlets Homes (the council’s arm’s length management organisation) residents who claim Universal Credit are not paid on time.

Tower Hamlets Council’s Benefits Service, which refers cases back to the DWP, have stressed that the errors are being picked up routinely through their own checks rather than through the DWP’s own systems. Despite the council’s efforts, the DWP will not act on errors raised by the council and advises the council that they will only correct errors when notified by the claimant. The claimant has to give permission for the council to act on the claimants UC claim before the DWP will act on any errors raised by the council.

The report is highly critical that ‘the DWP appear to have developed a UC delivery model where councils are spectators in the Universal Credit process’.

Tower Hamlets has one of the highest levels of poverty in the country. As a result in 2016 Mayor John Biggs introduced a multi-million pound Tackling Poverty Fund to support our poorest residents and mitigate the impact of Universal Credit and benefit cuts.

Mayor of Tower Hamlets John Biggs said: “The very foundations of Universal Credit are riddled with errors and systemic faults. It may seem like a technical issue within a hugely complex system, but the reality of these errors can be life-changing for those who rely on benefits, whether through underpayments meaning people struggle just to get by, or enormous overpayments which the DWP has to reclaim from the person affected.

“Universal Credit is clearly not fit-for-purpose and it’s falling on our own Benefits Service to highlight and pursue errors which the DWP shouldn’t be making in the first place.

“The Government has to take a long hard look at the problems we’ve highlighted which show the impact of their failed system on the ground.”

Councillor Rachel Blake, Deputy Mayor for Regeneration and Air Quality, with responsibility for tackling poverty and welfare reform, said: “The roll-out of Universal Credit has been nothing short of chaotic. We’ve had delays, money stripped out and then put back in, U-turns and now we see exactly what impact that has on the people who really need support.

“As a council we have set up a multi-million pound Tackling Poverty Fund to help support people in our borough, and we’re using £1m of that to advise and support residents who have been hit by Universal Credit. We’re also working with the Child Poverty Action Group to examine exactly what impact it’s having.”