Concern over 'hidden' Universal Credit council costs

Controversial changes to the benefits system are leaving Welsh councils with hidden costs, it has been claimed.

Universal credit aims to make claiming simpler by combining several benefits.

But 16 of Wales' 22 councils said the UK government is not covering the full cost of assisting claimants, including teaching IT skills needed to apply.

The Department for Work and Pensions (DWP) said councils can apply for reimbursement of additional costs, but councils denied that was the case.

The body representing councils, the Welsh Local Government Association (WLGA), and Welsh local government minister Julie James said the rollout of the benefit was not working.

Universal credit has to be applied for online, and will eventually replace housing benefit, income support and other payments.

At the moment councils can reclaim some money for each person they help who needs support with digital skills and budgeting to cope with the new system.

Wales' 22 councils estimated the total bill for providing that help was more than £1.2m last year - even after claiming payments from the DWP.

A DWP spokesman said universal credit is "a force for good" and is working for the vast majority, adding that local authorities can "apply for reimbursement of any extra costs associated with universal credit".

But Anthony Hunt, Torfaen council leader and a WLGA spokesman, claimed in his experience councils had not had much success in getting a "reasonable proportion" funded back.

"There's a massive hidden cost - because it's not just the direct cost of getting people onto universal credit, it's the impact on homelessness services, for example," he added.

He called for the UK government to recognise the "big cost implications" and "go back to the drawing board".

From April charity Citizen Advice will provide help to people who are applying for universal credit, instead of councils, as part of an agreement with the DWP.

The DWP said it would ensure the most vulnerable people "will get the best possible support" to make a claim.

But the charity said the £39m contract did not cover ongoing support costs.

Julie James, Minister for Housing and Local Government in Wales, believes councils and charities will continue to pick up additional costs associated with universal credit.

"In Wales local authorities - although they haven't been as hard hit as their counterparts in England, because to some extent we've protected them - nevertheless… they are making very difficult choices about services for their citizens.

"This is just another burden on top of it, for vulnerable citizens who need their help."