Councillor Ian Brookfield said the roll-out of Universal Credit had impacted hugely on hundreds of families in the city who were struggling financially.
Universal Credit differs from other benefits such as Income Support, Jobseekers Allowance (JSA) and Employment and Support Allowance (ESA) in that it is paid monthly in arrears and is based on real-time information about a claimant’s circumstances, such as hours worked, meaning that the amount paid can vary from month to month.
As a result, many tenants had been forced into serious rent arrears – with some even being forced out of their homes, said Councillor Brookfield.
He told members of the council’s cabinet performance management panel this week: "This is largely down to the scandal that is Universal Credit because it hasn’t been properly rolled out and has caused so much misery for so many people.
"You only have to look at the kinds of despair it is putting people through. We need to look at introducing some kind of benchmark here in order to help safeguard our tenants and do all we can to support them in this matter."
Councillor Steve Evans, cabinet member for environment, added: "In terms of actual data, I would be interested in seeing exactly how many families are being affected by Universal Credit. We need to humanise it.
"In a lot of cases payments have taken months to come through. And sadly this has meant some families have had to leave their homes. The whole thing is grossly unfair.
"It hasn’t been rolled out properly and we need to look at what the net cost of it is to us because we’ve had to fund it in order to put a lot of families who have lost their homes into a B&B. I would be interested to see what this amounts to in terms of hard cash.
"Whilst I think this Government has a made a proper mess of it, Wolverhampton Homes should be commended for all the work they are doing, including the new fire safety measures.
"We will take action against any landlords that aren’t meeting the necessary requirements, so we know people are safe in their own homes," he added.
Councillor Peter Bilson, the council’s deputy leader and cabinet member for housing, said most areas in the city were performing well in terms of tackling housing repairs and maintaining the upkeep of properties.
"The real problem facing us is the one presented by Universal Credit," he said. "We need to work with all families in order to avoid them getting into debt wherever we can.
"Our engagement with landlords has been moderately successful but not anywhere near as good as it should be. We need to have some sort of preventative measures in place to stop people becoming homeless."