Universal Credit reformers are petitioning the government in the run up to the autumn budget
Philip Hammond has just announced the date of this year’s autumn budget.
The chancellor said he would reveal the government’s spending plans for next year on 29 October. Exactly five months before Britain is due to leave the EU.
In the run-up to the budget, a petition to fix the ‘design flaws’ of the Universal Credit system, will be delivered to No. 10. The petition, backed by two Church of England Bishops, has been signed by more than 6000 people. It is aimed at stopping those receiving Universal Credit from falling further into poverty.
Universal Credit was introduced in 2013 by the coalition government. It replaces 6 means tested benefits.
The petition is the latest to have been brought by the End Hunger UK coalition. The coalition includes the Trussell Trust, Church Action on Poverty, and Oxfam. It calls on the Government to respond to evidence that foodbank use has soared in areas where Universal Credit has been rolled out.
Also, this month the Resolution Foundation, a non-partisan and award-winning think-tank that works to improve the living standards of those in Britain on low to middle incomes, published its report.
The Resolution Foundation say they conduct authoritative analytical research on living standards in the UK, Also, they produce effective policy solutions that help shape the debate on economic and social policy.
Their latest report suggests that the 2 key advantages of introducing Universal Credit, which were meant to improve financial incentives and to increase take up, have been undermined by subsequent budget cuts, roll-out delays, payment problems, and financial hardships for applicants.
David Finch, a Senior Research Fellow at the foundation who wrote the report explained: –
“Resolution Foundation research has shown that more working families with children will lose entitlement, 1.8 million, than gain in Universal Credit, 1.4 million, and that it does very little to improve financial incentives — particularly for single parents and for second earners.”
He said: –
“The long implementation of Universal Credit (UC) has been far from smooth. We’ve become all too used to negative stories about roll-out delays and, more seriously, payment problems and financial hardship for those accessing the new system.”
“The government, however, is likely to have been cheered at least by the fact that the roll-out has picked up pace in recent months. With the full system set to be in place across all job centres in the UK by the end of the year. But implementation is shortly to enter its next and, arguably most difficult, phase: ‘managed migration’. This brings new risks, but opportunities too.”
Plans for this “managed migration” of all people in receipt of benefits to Universal Credit, about seven million people, are due to be given in the Autumn budget, in November. The transition, due to be completed in 2023, must be “smooth and fair”, Mr Finch says.
“Sharp budget cuts and significant processing issues have acted to erode many of the hoped-for gains associated with the introduction of Universal Credit, weakening what was once solid cross-party support. Going forward, the government must ensure it protects what now represents the main remaining argument for persisting with such a major programme of welfare reform. Namely, its potential to boost benefit take-up among recipients.”
“This could be very significant, with the OBR, Office for Budget Responsibility, estimating that 700,000 families could benefit by a total £2.9 billion a year under Universal Credit as a result of receiving all the support to which they are entitled.”
The report makes the following recommendations: –
Managed migration should only start at significant scale when the DWP is entirely satisfied that the system is ready.
To support its assessment, the DWP should ensure that the roll-out of this phase and the results of early testing of different approaches is opened up to monitoring by external experts including SSAC and the Work and Pensions Committee.
The design of the migration should follow the principle that individuals should not bear the burden of risk to their financial standing due to the migration to Universal Credit. Instead it should be borne by DWP, Department of Works and Pensions.
The claims process for Universal Credit should be reviewed to assess the burden of providing evidence. The managed migration should only begin when the DWP has shown service levels meet a standard agreed with external experts including SSAC, the Social Security Advisory Committee and the Work and Pensions Committee. We suggest this should be that 90 per cent of new claims are paid in full and on time.
The DWP should prioritise migration of simple cases. Basing its assessment on the number of different Universal Credit elements paid, the burden of evidence required to process a claim and the likely level of ongoing interaction that will be required with Jobcentre Plus advisers.
While the DWP should continue with its proposal to kick-start the transition of existing cases to Universal Credit by issuing migration notifications, it should tie hard deadlines to existing benefit milestones.
For tax credit cases, the annual renewals process should serve as a hard cut-off. In ESA, Employment and Support Allowance, cases, tailored individual support should be provided. Existing entitlements should be maintained under Universal Credit.
In cases for both tax credit and ESA, no existing benefit payments should be stopped outside of a standard renewals or re-assessment period unless the DWP has ascertained that the person has made a successful claim for Universal Credit or chosen not to do so.
The DWP should be clear that it intends to take account of entitled but unclaimed legacy benefits in its transitional protection calculation, by way of helping reinforce the take-up advantage associated with the switch to Universal Credit.
It should also introduce an earnings disregard to account for small and short-term variation in earnings in order to avoid penalising those with volatile incomes.
To reduce dependency on transitional protection the government should re-invest in work allowances. Reduce the greatest losses among working families and strengthen financial incentives. Increase earnings, this should take the form of boosting work allowances for single parents. Introduce a second earner work allowance.
At the TUC conference recently, Archbishop of Canterbury, Justin Welby said: –
“It has left too many people worse off than they were, and leaves people at a heightened risk of hunger. Can you believe that we say this in England in the 21st century? Debt, arrears, foodbanks.
“If they cannot get it right they need to stop rolling it out. We must have people with adequate incomes to live without poverty.”
Bishops have campaigned for a reform of the welfare system for some time. The Bishop of Durham, the Rt. Revd Paul Butler, and the Bishop of Dover, the Rt. Revd Trevor Willmott support the petition.
Bishop Butler said: –
“I support the principle and direction of Universal Credit. However, more and more families have had to turn to foodbanks following its introduction, and are reporting unintended delays. Lack of digital support, poor administration, and a lack of flexibility in the system. All these problems can and should be resolved.”