In the Times and the FT a question: is universal credit – to date – a disaster?
Will universal credit be ranked with the poll tax, the invasion of Iraq, Gordon Brown’s removal of the 10p income tax band and George Osborne’s cuts to disability payments?
“Mr Gauke, Secretary of State for Work and Pensions talks of the value of employment — in principle, this must be right — but in practice, again, at the food bank in which I work many of the customers I see each week are in work, but the costs of rents, transport, energy, children, wipe out earnings before food and the only place to go for food is us . . .
“To read David Gauke, on the subject of UC, you would think that the introduction of universal credit had been a smooth, well thought through project. In fact, it must rank as one of the worst executed policies any government has attempted . . . “ Jenni Russell of the Times writes in more detail (edited extracts):
The system aims to simplify the complex welfare system by combining six different benefits, from housing to tax credits to childcare to jobseekers’ allowance into a single payment, ending the benefits trap and ensuring that work would always pay more than welfare.
After seven years of development, a pilot project of the universal credit is under way. It has gradually expanded so that now almost 600,000 people are receiving it. In October about 50,000 people will be moved on to the scheme every month. But UC is not meeting its own six-week target. The DWP says that 20% of claims are paid late, and Croydon reports that 12 weeks delay is standard.
The length of time a new claimant must wait to be paid in full has tripled, from two weeks to six or more; it takes at least five weeks for the first payment to arrive forcing people into debt and creating ‘tremendous anxiety’. Most people have not saved enough to keep them going for six weeks. When their lump sum finally arrives, they are often forced to spend money intended for rent on living costs or loan repayments instead. Some families are using food banks and some have been evicted. In Croydon, one of the pilot area, the council told the select committee on work and pensions that under UC rent arrears had rocketed from under 10% to at least 40%. Ms Russell adds that even the emergency loans for which some people would qualify are little advertised and harsh to repay.
Reasons for the delay include:
- people are asked for the wrong information,
- documents get lost,
- dreadful computer breakdowns (RS),
- huge overruns in costs (RS)
- unexpected requirements, such as the demand that childminders are asked to provide statements of charges on headed notepaper as if they were City law firms.
Jenni Russell believes that a revised UC could work well and prove beneficial. To this end she advises government to:
- scrap the first week’s wait,
- enhance grants and loans for those in need,
- provide proper support
- and commit to paying everyone the benefits within five weeks.
This must be given priority for the sake of people whom Richard Smerdon sees living ‘at the sharp end, the claimants themselves’. He continues: “They suffer unbelievable privation and unfairness dealing with the cock-ups from central government through to jobcentres. In addition to that is the monstrous rule that no one can claim universal credit for seven weeks after they have ceased to draw existing benefits. So for seven weeks, many of the customers coming to the food bank in which I work would starve were it not for us . . .”