Is universal credit working?

Issue 243 (December 2014)

Paul Treloar describes an official report on the impact of universal credit (UC).

The report – overall

UC is having a very positive impact with a successful delivery roll-out continuing apace. This is the somewhat startling headline finding from a new report from Department for Work and Pensions (DWP) called ‘Universal Credit at Work’.1 The report claims to assess progress to date and sets out plans for further developments. Across the five chapters, it contains an analysis of the ‘significant weaknesses’ in the current ‘legacy’ welfare system, before moving onto the design, delivery and strategy for rolling out UC, as well as perceived economic benefits and the impact of these changes.

The report also highlights the intention that UC deliberately fosters a new relationship between citizens and state, promoting ‘independence and personal responsibility’. Noting a commitment to increased support from work coaches and budgeting, it is also highlighted that this is matched with renewed expectations to find work, increase earnings, ‘binding rights with responsibilities’.

The report – some detail

A ‘test and learn’ approach is said to be behind the staggered roll-out of UC, which aims to continuously improve the service and ensure safe delivery. One example of how this is working in practice relates to sanctions. Originally, when a claimant failed to attend a work review interview, her/his UC claim would remain open but attract a sanction. However, this apparently led to some people receiving multiple sanctions as they had failed to report moving into work, so one open-ended sanction is now applied instead, which is then lifted if the person concerned complies with certain requirements. Similarly, the report notes that a Claimant Communications Unit is currently reviewing communications about sanctions to ensure they are understood by claimants and ‘drive the appropriate behaviours’.

On this latter point, we again come across evidence of the intended changes being more than simply regulatory – at one point, it is highlighted that it is estimated that an extra two million citizens will become part of the active labour market regime and, in particular, that for most UC claimants, looking for work will become a ‘full time job itself’. While changes to the amount of eligible childcare charges increasing from 70 to 85 per cent are to be welcomed, there is also an amendment requiring single parents with children aged three or four to be required to comply with work preparation requirements as well as attending work focussed interviews.

Payment accuracy is 97 per cent for system calculations, which appears very impressive. However, this has to be gauged against the profile of UC claimants, who have primarily been single jobseekers without children, impairment or ill-health, housing costs, or other complicating factors. Similarly, the real time information reporting between DWP and HMRC is stated to have identified claimants who have underreported their actual earnings. The report states that learning in this area has led to the proposals around attribution of earned income in one calendar month being allocated over a period of up to six months,2 to prevent the potential for employers and employees to collude to maximise UC entitlement.

In terms of further progress, the report states that by December 2014, UC will be rolled out across 96 areas, with all these areas taking claims from families with children from January 2015. Early 2015 will see nationwide expansion, which we understand will be implementation in 100 Jobcentre Plus areas per month from February onwards. The report predicts jobseeker’s allowance claims shutting for new applications from 2016, with other legacy benefits following suit in due course. Projections are made for 100,000 UC claims being in operation by May 2015, increasing to 500,000 by May 2016. Eventually, it is predicted there will be up to 7.7 million recipients, although there is no forecast date for when this might be.

Comment

The unrelentingly positive tone of this report skates over many of the well-publicised teething problems that have been raised by various bodies including the National Audit Office, the Major Projects Authority and the Work and Pensions Committee.3 However, it also reflects the determination of Secretary of State for Work and Pensions Iain Duncan Smith and his department, the DWP, to drive forward this major change to the provision of means-tested working age social security across the UK. Questions remain about how this will play out in practice, particularly with the issues of possible devolution of housing benefit in Scotland under consideration. In a book of proverbs, Thomas Fuller once noted that ‘All things are difficult, before they are easy’ – we are hoping this is the case with UC but we wait and see what happens in practice.


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