Hackney Council is preparing to support a “new wave” of people who need to access Universal Credit, as claims saw a spike of 60 per cent between mid-May and mid-June of people not covered by government business support.
A council report on the issue highlights a medium-term risk of increased unemployment and unsecured debt, as well as the “blight” to neighbourhoods if large numbers of businesses have to close.
Hoxton Job Centre Plus (JCP) saw over 3,600 new claims between 13 March and 12 April, with the Hackney branch seeking over 4,400 new claims in the same period. Previously the Hackney JCP had seen around 200 new claims a week, which has risen to 1000, though it is understood that the 90 per cent target for timely payments continues to be observed in the borough.
Cllr Sharon Patrick, chair of the Living in Hackney scrutiny commission, said: “Unfortunately, we may be experiencing a new wave of people losing their jobs due to furlough finishing. Many of them perhaps have never experienced having to ask for benefits before, or for help from the council.
“They may have different needs, perhaps, to people who have traditionally relied on benefits. They may be IT savvy, but may not know their way round the benefits system, or think work may turn up when it doesn’t turn up, and so run into debt, or have things like credit card debts.”
The council has a fortnightly meeting on Universal Credit including with advice services and the Department for Work and Pensions, which has been looking at the demography of new claimants, with the Town Hall now working on communications support for people unfamiliar with the system.
The Council is providing support to businesses and residents who are out of work, with finance chief Cllr Rebecca Rennison stressing that debt to the council is being seen by the Town Hall as a “potential support need,” with an emphasis on engagement and support rather than enforcement.
Around 2,500 households in the borough have been unable to pay rent in the past month, with a rise from 70-90 such households per week to 600.
The Town Hall has made clear the challenges faced by new entrants to the system in how to seek help and the “complicated routes” to do so, with an underlining that support is needed for existing claimants who have moved from face-to-face to a virtual system due to social distancing.
A five-week delay before the first payment of UC remains in place, with claimants who need money immediately having to pay back an advance payment in the longer term, with repayments able to be deferred for three months.
Sonia Khan, Hackney’s head of policy and partnerships said: “The point is to be able to look at how we can flex the employment support. In many ways we’re going back to some years ago, when there was more of a focus on welfare to work and on the skills side of things.
“The priority reset in our corporate plan has more of a focus on skills, and we are revisiting our poverty reduction priorities, to look at the immediate material impacts but in the long-term to look at how we can pick up and support.”