Universal Credit’s impact is likely to vary throughout Wales. Factors like demographics, population density, access to support services and how long Universal Credit has been in place will all play a part.

For this reason, and also to ensure future policy works for all families in Wales, our research used household and survey data from each local authority in Wales. The results will be useful for every local authority.

For both research strands, Council Tax Reduction and Household arrears, we carried out research in two ways. We collected and analysed existing household-level datasets held by Welsh local authorities. Plus, we conducted surveys and interviews with a sample of local authorities and residents.

Local authorities played a critical role in building the data store for the research. By collaboratively sharing existing household level data sets and taking part in surveys with residents, they helped to create a powerful evidence base for policymaking.

As well as contributing to the country-wide analysis for Wales, local authorities received individual analysis highlighting local impacts.

Housing associations played a critical role in building the data store for the research.

Their anonymised data on the rent arrears of tenants was securely collected and combined with the household-level data gathered from local authorities. This crucial information added to the powerful evidence base we built.

In addition to rent arrears data we invited landlords and tenants to complete a short online survey which we followed up with short telephone interviews to explore the impacts of Universal Credit in more detail.

All Welsh authorities were invited to join.

1. Blaenau Gwent County Borough Council
2. Bridgend County Borough Council
3. Caerphilly County Borough Council
4. Carmarthenshire County Council
5. Ceredigion County Council
6. City and County of Swansea
7. City of Cardiff Council
8. Conwy County Borough Council
9. Denbighshire County Council
10. Flintshire County Council
11. Gwynedd Council
12. Isle of Anglesey County Council
13. Merthyr Tydfil County Borough Council
14. Monmouthshire County Council
15. Neath Port Talbot Council
16. Newport City Council
17. Pembrokeshire County Council
18. Powys County Council
19. Rhondda Cynon Taf County Borough Council
20. Torfaen County Borough Council
21. Vale of Glamorgan Council
22. Wrexham County Borough Council

Datasets used

Household datasets

Most of the datasets used to build the Welsh data store for this research are already held by local authorities. These are:

• The Single Household Benefit Extract (SHBE)
• The Council Tax Reduction (CTR) Extract
• Household-level data on council tax arrears
• Household-level data on council rent arrears

Surveys and interviews

We designed an online feedback survey on Universal Credit, CTR and arrears levels. Local authorities helped by sending recruitment emails to people who receive Universal Credit (or current benefits, where this is permitted by their Privacy Notice). We used the results to give an aggregate analysis of all council’s survey data, which was anonymised, creating a national picture of Universal Credit’s impacts across Wales.

Published in January 2020, the interim report focuses on the impact of Universal Credit on the Council Tax Reduction Scheme (CTRS) and possible amendments to the scheme.

Our report, Understanding the Impact of Universal Credit on the Council Tax Reduction Scheme and Rent Arrears in Wales, has been published by the Welsh Government. The report is the culmination of eighteen months of working closely with all 22 Welsh local authorities, alongside the Welsh Government.

The report focuses on the impact of Universal Credit on the Council Tax Reduction Scheme, council tax reduction awards, council tax arrears and rent arrears in Wales. The report also considers the experience of Universal Credit claimants and stakeholders.

Conclusions show Universal Credit is a significant change in welfare support for low-income households. The report provides evidence that the move to Universal Credit is having an impact on household resilience and debt levels of low-income residents in Wales.

There is evidence of lower council tax reduction awards, higher council tax arrears, and higher rent arrears, as households move to Universal Credit. There is also evidence that all forms of arrears could accumulate once households have moved to Universal Credit.

Aspects of Universal Credit, such as the five-week wait, monthly payments and levels of support, risk causing financial difficulty and debt for some claimants. However, it is worth noting that a minority of participating households preferred the control of their claim offered by Universal Credit.

In January 2019, I commissioned research by Policy in Practice to shed light on the impact of Universal Credit on our national Council Tax Reduction Scheme, council tax debt and rent arrears in Wales. This in-depth and longitudinal research sought to track the circumstances of households in Wales over time using data from all areas of Wales. It is supplemented by new qualitative research into the experiences of Universal Credit claimants, advice services, local authorities, housing associations and private landlords.

The Final Report confirms the emerging patterns seen in the interim report, showing that Universal Credit can have a detrimental impact on household circumstances, whether this be in relation to council tax reductions, council tax debt or rent arrears. The report provides more detail about some of the options for future changes to the Council Tax Reduction Scheme. In addition, the experiences of Universal Credit claimants captured by survey data highlight how some households are struggling to cope with and understand some of the elements of the Universal Credit system.

Rebecca Evans MS, Minister for Finance and Trefnydd

Read full written statement

Understanding the impact of COVID-19 on the Council Tax Reduction Scheme in Wales

The report focuses on the impact of COVID-19 on the Council Tax Reduction Scheme (CTRS), council tax reduction awards and council tax arrears in Wales. It provides updated results based on April 2021 datasets and takes into consideration the latest developments in welfare policy.

Conclusions show COVID-19 has increased CTRS caseload and the total value of CTRS reductions. It has also had an impact on council tax arrears in certain local authorities in Wales.

The report also projects the impact of the pandemic as at April 2022.