We know about the many design problems with universal credit, but what about the impact it has had on families? CPAG and the London Borough of Tower Hamlets have published a new report revealing the experiences of families with children on universal credit in Tower Hamlets, as well as the impact universal credit has had on the local authority and others in the borough. Alice Woudhuysen, author of the report, highlights its key findings.
Tower Hamlets has the highest rate of child poverty in the UK: 57%, after you have taken housing costs into account. In 2017, Tower Hamlets became one of the first boroughs in London to become a universal credit ‘full service’ area, meaning that anyone living in the borough making a new claim for certain means-tested benefits and tax credits, has to make and manage their claim online.
The London Borough of Tower Hamlets commissioned CPAG to research the experiences of families with children in receipt of universal credit in a qualitative research study. At the same time, the council and the Greater London Authority commissioned AudienceNet to carry out a quantitative survey with universal credit claimants in the borough. Our report explores the findings of both pieces of research, as well as analysing the data of 20 clients with children who were in receipt of universal credit at First Love Foundation (a foodbank in Tower Hamlets) and who CPAG advised over the course of a year.
So, what did our research find? Firstly, it confirmed that there are still many design problems with universal credit – including the transition to universal credit; making and managing claims; problems with payments; the experience of JobCentrePlus and interactions with the DWP; work-related requirements; sanctions and work incentives.
More importantly, universal credit is having a negative impact on families. Many of the claimants in the study were struggling to get by with the amount of universal credit they received, and were in debt and arrears as a result of being on universal credit. This was exacerbated by the system of payment in arrears and the five-week wait at the start of claims. Some had to borrow money from friends or family, or take out credit cards or loans.
‘Sometimes I’ve gone into minuses in my bank. I’ve had to borrow money from my parents and my sister saying I’ll pay them back. How do I pay them back if I don’t get enough money?’
Some stakeholders thought that claimants needed more help with managing their budgets, but noted that if people do not have enough to live on, better budgeting would achieve nothing. One family was only able to heat one room at the time they were interviewed, despite having a young child.
‘We don’t put the heating on, obviously, because we’re worried the heating cost is going to be really high. The house is big, as well. So, we try to stay in one room with that heater here.’
In terms of financial security, most of the claimants we spoke to felt as though they were worse off under universal credit than under the legacy benefit system. Nearly all stakeholders agreed that their clients’ incomes were not enough under universal credit and that other reforms such as the benefit cap made things worse.
‘All the money, if I’m honest, it goes on my rent and bills… Then, nothing left for me. So, how am I going to survive?’
Many claimants reported that universal credit had caused them stress and parental conflict. Stakeholders observed that clients were anxious about losing their homes and/or not being able to provide for their children.
‘In that period of time I was so stressed with the house, my husband was lost… I have a daughter, when you have a child you have so much to provide her that you cannot think of anything else…’
And what about the impact on children? The claimants we interviewed were making significant sacrifices for their children – in one case, not eating for several days - and many noted that their children were missing out on the experiences that all children should be able to take for granted. One mother described how her children could not go anywhere in the summer holidays except the local park.
‘They even have homework, like what did you do in the half term and stuff and she says “What should I write because we didn’t do anything?” So she’s clever like that, so I say “Just write you went to Nan’s house” because we did go there, but what else is she supposed to write? Because there is nothing much we do. We can’t go on holiday, it’s too expensive. So what have I got left to do now? Nothing to be honest.”
The claimants we interviewed generally preferred the old legacy benefit system to the new universal credit system. Those in paid work found such regular contact with the DWP particularly uncomfortable. However, some of the stakeholders we interviewed were positive about some aspects of universal credit and thought it had the potential to achieve its aims.
That said, our research found that universal credit is placing a considerable burden on local authority departments, voluntary sector organisations and social landlords in the borough, yet they are not recognised as partners in universal credit, so often find it difficult to support claimants as they would like to. Following research findings like these, we hope that there will be many more improvements made to the system.