Universal Credit

Universal Credit: the bad, the worse and the ugly

Universal Credit has been failing badly. Over the past few weeks, press and politicians have begun to notice that the next stages of Universal Credit (UC) could bring real disaster – and that something needs to be done and quickly.  By the end of the year the first stage of the roll out of Universal Credit will have reached every part of the UK.According to The Times, the Cabinet has been informed that families could lose £2,400 a year in the switch to UC. This figure has been known since 2015.                                           

Why has Universal Credit hit the news now?  What appears to have changed is that people are realising that UC will hurt many of the “hardworking families” that politicians claim to champion. While cutting benefits to the unemployed can be described as “incentivising work”, cutting benefits to working parents struggling to pay their rent starts to look cruel. It is beginning to dawn on politicians that these families have a political weight that it is foolish to ignore.

Who is Universal Credit affecting?

It is important to realise that only around 1 in 10 Universal Credit claimants are unemployed, and that they typically get a job after 12 weeks. Universal Credit is mainly a benefit for low income workers and people unable to work due to illness or caring responsibilities. Its scale is enormous, encompassing around 7 million families. Because families with children need most help, around half of the UK’s children will live in families exposed to Universal Credit.

The bad

When Universal Credit arrives in an area, Trussell Trust foodbank use goes up 52%. Rent arrears also increase.  We are confident, through both research data and contacts on the ground, that Universal Credit leads to huge increases in hardship for many families.

It is undeniable that UC causes hardship to many. The reasons are varied and are discussed in detail in our briefing. They include:

  • A 5-week initial wait for a payment and other delays designed into the system.
  • Delays and stoppages because the bureaucracy is failing and difficult to navigate.
  • Budgeting problems due to wildly varying payments and deductions.
  • When you get the benefit successfully the money is simply too little.

It is important to note that the bureaucratic problems and delays are not a matter of teething issues or only occur when you first claim. Improvements are possible, but many problems are fundamentally designed in and are ongoing throughout the claim.  They are not going away without big changes.

The worse

Only new claimants get Universal Credit at the moment. Most families, even in areas where Universal Credit is fully rolled out, remain on the old system. That means a 52% foodbank use increase happens even when most families still haven’t moved onto Universal Credit.

Worse still is that those who are yet to move onto Universal Credit are the longer term claimants. That includes lots of families with children and, really worryingly, families with the most debilitating long-term health conditions.

The ugly

In July next year “managed migration” will begin.

Under current plans, batches of families receiving the old style benefits will receive a letter and be told to apply for Universal Credit.

If they don’t respond their claim will be closed and they will be left with no support.

If they do apply they will be faced with the complex application system and the dreaded 5 week (and often more) wait for a first payment.

If everyone receives their letter, understands their letter, and knows what to do in response to their letter, we can expect problems of the scale we have seen in the early stages of the roll out.

If people don’t respond to the letter – for whatever reason – we can expect the problems to multiply and for them to affect families who are not in a position to cope with them.

The regulations are being drawn up now.  The Department for Work and Pensions (DWP) is offering some assistance and safeguards but fundamentally it is refusing to take responsibility for the process. It is in essence saying “we have sent the letter, now it is your problem”.

The Churches and the charitable sector collectively are absolutely clear that the DWP need to take responsibility for this process. The DWP needs to ensure that it has successfully contacted people, and that they don’t cut people off until they are sure the family understands what is happening and has made an informed choice (or has lost their claim under the old system anyway).

What you can do:

Contact your MP to say you are concerned about Universal Credit and managed migration. Say that it is really important that the DWP takes full responsibility for the transition. Families’ benefits should not be stopped until the Department has confirmed they do not want to apply for UC (or they would have lost them under the old rules).

Universal Credit leads to hunger – and we need to measure it and then reduce it. As partners in Endhunger UK we are encouraging people to sign this petition calling for the UK Government to Fix Universal Credit to stop even more people going hungry.

Meet your MP: This new campaign is not about lobbying on a particular issue but instead encourages churches to meet and build a relationship with their MP. UC may be part of your conversation but over the longer term knowing your MP will make it easier to talk about issues such as these and have a constructive dialogue.

Paul Morrison

I am the policy advisor with particular responsibility for issues around the economy including poverty and inequality. Prior to working for the Methodist Church I was a postdoctoral researcher at Imperial College studying viral disease and vaccine design.

    


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