Universal Credit has caused a 20 per cent rise in rent arrears from East Lothian Council tenants in just three months since it was introduced, a report has found.

A report going before the local authority tomorrow shows that the change to Universal Credit has seen rent arrears rise by £242,000.

The net year on year increase, calculated at 12 per cent, or £157,000, has almost entirely wiped out the council’s success in reducing rent arrears in since 2014, it added.

Additional time spent by staff in dealing with the impact of the new benefit is costed at nearly £8,000 and average rent arrears stands at £898.89, compared with £589.49 for those not yet on the benefit.

The report also found that the welfare fund is forcing claimants into debt, to foodbanks and is damaging the council’s finances.

The concerns were highlighted at Holyrood’s Social Security Committee last week by Alison Johnstone, social security spokeswoman for the Scottish Greens and MSP for Lothian region. She said problems included delays, errors and missing documentation.

Alison raised what she called “very serious concerns” with Neil Couling, Universal Credit director general at the Department for Work and Pensions (DWP) who admitted there had been problems and spoke of deploying extra staff to “fight our way out of a vicious circle”.

Ms Johnstone said: “The DWP roll out of Universal Credit in East Lothian is clearly causing serious problems. The DWP might call it a test and learn environment but this is affecting vulnerable people and putting a huge strain on council staff.

“We need to see some compassion from the UK government who are driving these ill-considered changes. The DWP say they are listening to East Lothian Council, where staff are clearly stretched. The DWP must improve their systems as there is very little confidence left in Universal Credit.”

A DWP spokeswoman said: “The reasons for rent arrears are complex and to link it to welfare reform is misleading. Universal Credit is transforming lives, with people moving into work faster and staying in work longer than under the previous system.”