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Councils put aside millions for universal credit debt

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Figures are just "tip of the iceberg" MSP warns

Scottish councils have put aside £8 million to mitigate against universal credit debt, a freedom of information request has revealed.

Aberdeen City Council has set aside £2.85million, Midlothian Council believe it’ll cost over £3 million due to increased rent arrears and having to take on additional staff at a cost of £86,000.

Highland Council has set aside £775,000 to protect against bad debts it expects to be caused by the UC roll-out, Inverclyde has set aside £1.26million, while South Ayrshire Council has reserved £900,000 to cover “mitigating the impact of welfare reform”.

Meanwhile, Perth & Kinross Council estimate bad debts could cost around £442,000.

Universal Credit brings together six social security benefits and tax credits into one single monthly payment.

However claimants are made to wait at least six weeks before receiving their first payment.

SNP MSP Maree Todd warned the amounts could be just the tip of the iceberg, as most Scottish Councils did not respond to the FOI.

“The relentless roll-out of universal credit makes no sense. It’s driving people into poverty and severe hardship – leaving councils to foot the bill.

“Universal credit is the worst example of unthinking Tory austerity – a policy designed to save money but actually proving very costly indeed.

“Almost £9million has been set aside by local authorities to sort out the Tories’ mess. That means funding diverted from schools, roads and vital local services.

“And the figures only represent a fraction of what price councils may have to pay once the full, devastating impact of the rollout is ­realised across Scotland.”

The government is under mounting pressure to reduce this mandatory waiting period, as MPs from across the political spectrum urge PM Theresa May to reduce the “cruel” wait.

An urgent report from the Commons Work and Pensions Select Committee calls on the Government to cut the minimum six-week wait to a month, warning that claimants are being pushed into debt and left reliant on food banks to feed their families.

Frank Field MP, chair of the committee, said: “The baked in six-week wait is cruel. No one can give us any real justification for it.

“Such a long wait bears no relation to anyone’s working life and the terrible hardship it has been proven to cause actually makes it more difficult for people to find work.”