- Isolating the impact of Universal Credit on homelessness is challenging. The causes of homelessness are complex, and data which could link homelessness and Universal Credit is limited. However, a number of correlations between homelessness and Universal Credit can be observed in the data.
- For example, homelessness rates in Scotland have slightly increased since 2015, coinciding with the rollout of Universal Credit since 2013. Mental health in particular has grown as a reason for homelessness since 2013, after declining for five years. Furthermore, homeless households and households affected by the five-week wait tend to be similar in composition, and there is a statistically significant correlation between Universal Credit sanctions and homelessness across Local Authorities.
- We estimate that the five-week wait reduced expenditure on Universal Credit in Scotland by £144 million in 2019/20, increasing to a projected £205 million in 2020/21. We also estimate that the freeze in Local Housing Allowance rates, the Benefit Cap, and the Bedroom Tax will cumulatively reduce expenditure on housing-related reserved benefits by around £115 million each year in Scotland by 2024/25.
- A range of evidence from charities and other organisations demonstrates that certain features of Universal Credit have directly contributed to homelessness, particularly sanctions and the five-week wait. The channels through which Universal Credit leads to homelessness include forcing tenants into rent arrears and evictions, and contributing to relationship issues and mental health problems.
- The impact of Universal Credit on homelessness has become increasingly important during the Covid-19 pandemic. The Universal Credit caseload has nearly doubled since the beginning of 2020, meaning more people than ever are at risk of being affected. While emergency measures have been taken to house rough sleepers, protect tenants from eviction, and provide further financial assistance to help those struggling to pay their rent, there is evidence that arrears have mounted, as have mental health and relational problems.
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