A CONSUMER watchdog has issued a stark warning over Universal Credit as it emerged UK ministers face a £1.5 billion benefits bill after underpaying tens of thousands of disabled claimants.

A new report by Citizens Advice Scotland blamed social security changes for a sharp rise in the number of Scots desperately seeking assistance after falling behind on rent payments.

It said demand for advice on rent arrears had boomed by almost 50 per cent between 2012 and 2017, the last year for which statistics are available.

Universal Credit was first mooted in 2010 and phased in from 2013 onwards.

It came as it emerged 180,000 disabled claimants entitled to Employment and Support Allowance (ESA) lost an average of £5,000 each in a £1.5billion benefits blunder.

The Department for Work and Pensions insisted anyone affected by the "historic error" would receive all the payments they are entitled to, but the SNP branded the mistake “frankly disgraceful”.

Rob Gowans from Citizens Advice Scotland said the increasing number of people falling into rent arrears was “one of the most worrying trends we see”.

He said: “While there are a number of factors driving this, we have no doubt that the flaws in Universal Credit are one of the main ones.

“For the past 18 months we have been calling for a halt and fix to Universal Credit. Some welcome changes have been made but many of the problems still remain and this report shows the impact these are having on peoples’ lives.

“We have set out again today the key flaws that need to be addressed, including reducing the waiting period before payment, cutting out processing delays and reducing deductions. These are relatively simple changes that could make a huge difference to millions of people.

“In our report we also set out other causes of rent arrears, such as rent increases, low wages and lack of support for those in need. All of these need to be addressed as well as Universal Credit, and we will continue to work to highlight these problems and help find solutions.”

Figures from 2012/13 show 5,340 people sought advice after getting into difficulty with rent payments. This compares to 7,856 in 2016/17 – a rise of 47%.

Earlier this week the further expansion of Universal Credit – which merges six benefits into one payment – was delayed yet again amid a growing backlash over the policy. Former prime ministers Gordon Brown and Sir John Major are among those who have criticised the changes.

It is now expected the full system will not be fully operational until late 2023 – more than six years late.

Social Security Secretary Shirley-Anne Somerville said there is “more and more evidence of the damage being caused by the roll-out of Universal Credit”.

She said: "Attempts to paper over the cracks, with a potential further delay to the introduction of managed migration are just tinkering in the margins of a flawed system and are not the answer. The system needs to be fundamentally changed to make it fit for purpose.

"We have done what we can with our limited powers, providing recipients with choices on the frequency of their payments and paying housing costs directly to their landlord. We are introducing split payments to give everyone an independent income.

"But Universal Credit is a reserved benefit and the UK Government should pay heed to the growing number of voices, from former prime ministers to the Joseph Rowntree Foundation and more importantly from families the length and breadth of Scotland.

“They must call a halt to the roll-out of Universal Credit and the use the Budget as the first step towards a fundamental review of this deeply flawed system."

A Department for Work and Pensions spokeswoman said: "Rent arrears are complicated and they cannot be attributed to a single cause.

"Our research shows that many people join Universal Credit with pre-existing arrears, but the proportion of people with arrears falls by a third after four months in Universal Credit.

"Managed payments to landlords are available as part of the alternative payment arrangements in Universal Credit, to minimise the risk of claimants failing to pay their rent.

"And we are rolling out the Universal Credit landlord portal to social landlords, which is helping us target support for vulnerable people."