THE introduction of Universal Credit has seen rent arrears in Sandwell rocket to almost £6 million with 14,000 homes now owing money to the council.

And housing bosses have warned the debt could increase by an extra £3.8 million if changes in how payments are collected aren’t implemented.  

The staggering amount owed was revealed in a report to the borough’s cabinet recommending Sandwell spends £408,442 on new IT software to help identify people at risk of getting into arrears. 

Nigel Collumbell, a service manager for housing, told cabinet members the council is now owed £5,718,446 while changes in welfare payments had seen staff workloads increase by 60 per cent.

He said: “With the backdrop of welfare reform this is producing a really challenging environment to collect and prevent rent arrears.

“With have had a trend of increasing rent arrears over the last three years and there has been a real steep increase in the amount of rent owed to us by local authority tenants since the roll-out of Universal Credit in Sandwell since November 2018.

“In terms of some of those specific challenges, Universal Credit is far much at the  top of the tree.

“As a consequence of the full roll out, we have an additional £34 million rent debit we have to collect that would have paid directly onto (our) accounts by housing benefit.”

He added that unless the council invests in a new technology, arrears could increase by an extra £3.8 million by the time Universal Credit replaces all existing welfare payments in 2024.  

Under the new welfare system, new claimants no longer have money directly paid to landlords and often have to wait weeks before the Department of Works and Pensions authorises payments. 

Housing officers say the computer programme is needed to help protect tenants, reduce the risk of evictions while ensuring the council can continue to repair and maintain homes.

Approving a two-year £408,442 contract councillors were told it is expected to increase income by £698,498 in the first 12 months.