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Russell Webster

Russell Webster

Criminal Justice & substance misuse expert and author of this blog.

Universal credit system still failing

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Universal Credit has taken significantly longer to roll-out than intended, may cost more than the benefits system it replaces, and the DWP will never be able to measure whether it has achieved its stated goal of increasing employment.

Linked to surge in use of food banks

The new (15 June 2018) National Audit Office (NAO) report on Universal Credit contains a damning analysis of the programme to date.

Universal Credit was designed to replace six means-tested benefits for working-age households: Jobseeker’s Allowance, Income Support, Housing Benefit, Employment and Support Allowance, Working Tax Credit and Child Tax Credit and was supposed to:

  • encourage more people into work by introducing better financial incentives, simpler processes and increasing requirements on claimants to search for jobs;
  • reduce fraud and error; and
  • reduce the costs of administering benefits.

However, the NAO found that the programme is much delayed  — roll out was scheduled to be completed by October 2017 but only 10% of the final expected caseload were claiming Universal Credit by that date. Perhaps most damning was the finding that Universal Credit may also cost more to administer than the previous system of benefits it replaces, with current running costs at £699 per claim, against an ambition of £173 per claim by 2024-25.

113,000 new claims were paid late in 2017.

Denial

The NAO acknowledges that the DWP has made some progress in rolling out the programme and that there is little practical alternative to continuing the roll-out. However, it is particularly critical of the Department’s refusal to accept that the failure of the Universal Credit system have caused real hardship to tens of thousands of people:

The Department does not accept that Universal Credit has caused hardship among claimants but the NAO has seen evidence from local and national bodies that many people have suffered difficulties and hardship during the roll out of the full service. The NAO states the Department has not shown sufficient sensitivity towards some claimants and that it does not know how many claimants are having problems with the programme or have
suffered hardship. In 2017, around one quarter (113,000) of new claims were not paid in full on time. Late payments were delayed on average by four weeks, but from January to October 2017, 40% of those affected
by late payments waited in total around 11 weeks or more, and 20% waited almost five months.

Increases in rent arrears since the introduction of Universal Credit in an area, which claimants can often take up to a year to repay, have been reported by local authorities, housing associations and landlords. Some private landlords told the NAO they have become reluctant to rent to Universal Credit claimants. In three of the four areas the NAO visited and for which data was available, the use of foodbanks increased more rapidly after Universal Credit full service was rolled out to the area. This agrees with the Trussell Trust’s report showing upsurges of 30% in foodbank use in the six months after Universal Credit rolls out to an area, compared to 12% in non-Universal Credit areas.

Conclusion

The benefits system, along with the lack of suitable housing, are providing unnecessary and often unsurmountable barriers to all those individuals who are trying to move away from a life of addiction and/or crime. Without a reliable source of a (very) basic income and nowhere safe to lay your head, how many of us could reasonably be expected to turn our lives around?

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