Covid-19: Department for Work and Pensions Update

Statement

The Statement was made in a Virtual Proceeding via video call.

My Lords, with the leave of the House, I shall now repeat a Statement made yesterday by my right honourable friend Thérèse Coffey, the Secretary of State for Work and Pensions. The Statement is as follows:

“With permission, Mr Speaker, I will make a Statement updating the House on the work of my department. I want to pay tribute to the civil servants in my department as well as to contractors and partners who have been working tirelessly to provide help and support to those in need. They are the hidden heroes for many people in this country. They should take great pride in their hard work and dedication to supporting people through these difficult times.

Since 16 March to the end of April, we have received over 1.8 million claims for universal credit, over 250,000 claims for jobseeker’s allowance and over 20,000 claims for employment support allowance. Overall, this is six times the volume that we would typically experience, and in one week, we had a tenfold increase. The rate for UC claims appears to have been stabilised at about 20,000 to 25,000 per day, double that of a standard week pre Covid-19.

I am pleased that my department is standing up to the challenge. We have redeployed a significant number of DWP staff, about 8,000 so far, and staff from other government departments, about 500 so far, to process these claims. Our payment timeliness for universal credit is running at a record high. We have also issued almost 700,000 advances to claimants who felt that they could not wait for their first routine payment, and the vast majority of these claimants received their money within 72 hours.

Where possible, and mindful of risk, we have also streamlined our processes. We will consider carefully learnings from this time in the response phase on whether any of them can be made permanent. We have also sought to make it possible for people to work from home and have already deployed 10,000 computers. We are now at a level of deploying 750 new devices a day to enable working from home and have added to the IT capacity for remote users.

However, where staff need to continue to work at the office, we are applying social distancing. From 17 March, we suspended all face-to-face assessments for health and disability benefits. We automatically extended awards for existing claimants that were due to be reassessed by three months and will undertake reviews or reassessments only when claimants notify us of changes which could lead to a higher payment. Any claim made under the special rules for terminal illness continues to be fast-tracked, it taking an average of six days to process these claims. From 24 March, jobcentres have not been open for regular appointments, but we have continued to offer face-to-face appointments in exceptional circumstances, when claimants would otherwise not be able to receive support. Claimants can continue to receive support over the phone or through their online journals. All local jobcentres have been turned into virtual processing teams, prioritising advances and the registration and payment of new claims. We have also been pairing jobcentres across the country to support each other with processing, fully using the capacity of our network.

This focus on the processing of claims has also meant that we stopped checking the claimant commitment regarding looking for and being available for work for three months. However, we want claimants to continue to look for work wherever they are able to do so. Ministers are working hard to ensure that existing vacancies can be accessed by people who have been made unemployed, and we will continue to support those people while they are waiting for the opportunity for work. We have created a new website to guide people, jobhelp.dwp.gov.uk, and we have 58,200 vacancies advertised.

While our IT systems worked, thanks to extensive work by the universal credit team, including our contractors, I know that some claimants experienced significant delays in verifying their identity. Identity checks are crucial in reducing fraud risk, so we worked closely with the Cabinet Office substantially to increase the capacity of the online Verify system. Average wait times are now below five minutes. Call volumes have also been extremely high, with over 2.2 million calls in one day at our peak. Recognising again the delays people were experiencing—or indeed not being able to get through at all—we turned this around with our “Don’t Call Us, We’ll Call You” campaign. A bolstered front-line team now proactively calls claimants when we need to check any information provided as part of the claim. This has been very successful in freeing capacity and reducing the time customers need to spend on the phone.

Regarding other operations of the department, while we have redeployed staff we have kept critical work ongoing in child maintenance and bereavement. We are monitoring our performance and will return staff to these areas if the response rate becomes unacceptable. On pensions, we have cancelled the pension levy increase, supported defined contributions through the job retention scheme, and worked with regulators to assist DB pensions and combat scams.

I think it is worth reminding the House of our financial injection of over £6.5 billion into the welfare system so that it can act as a safety net for the poorest in our society. We focused on changes that could be made quickly and would have significant positive impact. We have increased the standard rates of universal credit and working tax credit for the next 12 months by about £1,000 per year. We have increased local housing allowance rates for universal credit and housing benefit claimants, so they can now cover the lowest 30% of local rents. We also increased the national maximum caps, so claimants in inner and central London should also see an increase in their housing support payments.

I have been made aware that some councils have not made the adjustment in housing benefit, and my department is communicating with them all this week. Furthermore, across England we had already increased the discretionary housing payments by an extra £40 million for this financial year.

The 1.7% benefit uplift was implemented in April, ending the benefits freeze, and the state pension rose by 3.9%, as per the triple lock, reflecting last year’s substantial rise in average earnings. We have also introduced regulations to ease access to benefits. We legislated to allow access to employment and support allowance from day one of a claim. We relaxed the minimum income floor so that the self-employed can access universal credit more easily. We have also made it easier to access ESA by launching our ESA portal for online applications. We legislated to ensure that employees had statutory sick pay available from day one of sickness or self-isolation due to Covid-19. I remind the House that statutory sick pay is the legal minimum.

We will continue to look at issues that arise—for example, we are ensuring that maternity pay is based on standard pay, not furloughed pay levels—and will see what we can do quickly and straightforwardly to fix either unintended consequences or unforeseen issues. But it is not my intention to change the fundamental principles or application of universal credit.

A significant project that we have undertaken is to support MHCLG and the national shielding service by establishing the outbound contact centre. Furthermore, we use this contact centre to proactively contact the most vulnerable customers, who receive their benefits or pensions solely through Post Office card accounts. I want to thank the Post Office for helping us to support this group of customers. We have been able to provide contact-free cash payments by Royal Mail special deliveries. We were also able to signpost people to extra support from their local council.

I can also inform the House today that the DWP will stop any new benefit and pension claimants from using the Post Office card account from 11 May, as we prepare for the end of this contract. The uptake of accounts in the past year has been exceptionally low but, in any event, given that the vast majority of people using POCA already have a bank account, the cost of the contract is poor value for taxpayers. Existing customers who currently receive payment through the Post Office card account will see no change and will continue to receive payment into their accounts for the remainder of the contract period. We can use the HMG payment exception service for people who cannot access any bank account.

I want also to thank the Health and Safety Executive for its work on Covid-19. It is an arm’s-length body for Great Britain that is sponsored by my department. It has been doing crucial work with the Department for Business, Energy and Industrial Strategy and Public Health England to provide guidelines for employers to adhere to once restrictions can be eased. The HSE is working hard, along with local authorities, to enable work to continue safely in the sectors for which it is responsible. It has developed practical guidance and is enforcing the law where workers are exposed to unnecessary risk.

My department is standing up to the challenge of unprecedented demand for our services and we are getting support to those who need it. We will continue to work across government to help the nation get through this health emergency. I commend the Statement to the House”.

My Lords, I thank the Minister for repeating that Statement. I want to record our thanks to each member of staff working on the DWP front line for all they are doing during this crisis to process the unprecedented volume of claims that have been made.

I want to say at the outset how much we welcome each of the steps that the Government have taken to improve the welfare state to deal with this crisis, but the social security system that we had going into the crisis was a safety net with holes in it. I am glad that the Government have recognised the need to start shoring some of those up.

Labour has five proposals to enable the social security system better to respond to the crisis. The first is to increase legacy benefits. The Government have increased universal credit by £20 a week for this year, but those on legacy benefits such as JSA or ESA do not get that increase. More than 100 charities point out that this discriminates against disabled people. Can the Minister explain that?

The second proposal is to suspend the benefit cap. The House of Commons Library estimates that at least 18,000 extra families in Great Britain could be hit by the cap as a result of the increase in UC and housing help. That would take the total number of families affected this year to over 100,000. The cap affects not just big families; half of those 18,000 families have only one or two dependent children. More often, it is the high cost of housing. Ministers normally say, “You can escape the benefit cap by getting a job, working more hours or moving to cheaper housing”, but all those are impossible during this crisis. No wonder so many bodies, from the IFS to CPAG, are calling for the cap to be suspended. Will the Government do that now?

Thirdly, suspend the savings limit in universal credit. Anyone with savings of over £16,000 is banned from claiming UC altogether. That does not happen in tax credits, where the means test simply takes account of any income from savings. Why should someone who has put money aside for a housing deposit or is saving for a substantial item be completely frozen out of universal credit? They paid into the system when they were able to work, so should it not be there for them now? Will Ministers review those savings limits?

I thank the Minister for repeating the Statement and I would also like to thank the staff of the DWP for their commitment to answering and addressing the huge additional workload which is the result of the current crisis. What is clear is that, despite their hard work, there are now many people in desperate straits who are struggling to survive. Many people whose income has dropped to zero have been trying desperately to access money through universal credit to meet their daily needs. They cannot wait the required five weeks when they have no money and a family to feed. Equally, people with no income cannot be expected to pay back any emergency advance.

The two-child limit hits families with children hard and is a major factor in causing child poverty, which is now at 4 million and thus one of the highest rates of childhood poverty in Europe. The benefit cap seriously hits families with children, in particular the poorest. As the noble Baroness, Lady Sherlock, has just said, it affects people on low pay with insecure jobs. It is a major problem in the current situation for people who are on such very low incomes.

I would ask the Government to consider taking the following crisis measures to help those who are most in need. First, the initial universal credit payment should be sent after five days rather than five weeks, and the clawing back of UC advance payments should be suspended. The Government should suspend the two-child limit and the benefit cap for at least three months, subject to a further review. They should suspend all benefit sanctions and introduce an additional dedicated hardship fund via local authorities for people in urgent need who cannot access funds through universal credit. I look forward to the Minister’s response.

I thank both noble Baronesses. I realise that I am quite new to this, but they have a large amount of knowledge and experience. I will start with the five questions put by the noble Baroness, Lady Sherlock. The first was about increasing legacy benefits. If we had those in place now, the whole system would have been far slower than universal credit. We have looked at the people who are in most need and who need their benefits much more quickly. Much of the change has been to put money into those things, but we will continue to look at all other benefits as we move forward.

Suspending the benefit cap will not happen; the Government are not looking to do that. The savings limit is there because universal credit is to support those people who cannot support themselves. For the self-employed, the savings limits can be used for pensions or tax purposes. That might help some self-employed people who have to go into universal credit. The two-child limit has been discussed continually. The Government have no plans to change it. The policy ensures fairness by asking families getting benefits to make the same financial choices as people who support themselves solely through work. However, exemptions and safeguards are in place and I urge the noble Baronesses to look at those.

The five-week wait has also come up many times in the Chamber. About half a million advances have gone through already on the basis of 13 payments in 12 months. I think people are beginning to understand how the advances can be paid back. They are now being paid quickly—within 72 hours—so there should be fewer problems with people requiring food banks and such things, as referred to by the noble Baronesses. Councils also have emergency funds for anybody who needs help in those 72 hours; this needs to be better communicated.

The noble Baroness, Lady Sherlock, asked about maternity allowances. This was brought up in the other place yesterday. I will certainly make sure that she gets a full answer on this, rather than me trying to answer it. Maternity allowances are now paid on full salaries, not on furloughed ones, which is a good move. I do not know about the DWP on the phone, but I have heard good case histories of people who have been phoned by the DWP who were not expecting it but who were pleased to have had the call. So we probably do ring them, but I will get the noble Baroness an answer to her question.

I thank the Minister and the staff of the DWP for this amazing effort. We should really be loving not only the NHS, but the DWP. I am reminded during this crisis of the old saying that politics is about giving other people’s money away. There has to be a limit to how much we can spend. I would like the Minister to tell us, first, what is being done to advertise these 58,000 vacancies, because everybody who takes one is someone who is not reliant on public funds. Secondly, at the risk of being unpopular, I remember the outpouring of sympathy after Grenfell Tower but none the less, a number of people were convicted of fraud. Is the DWP still vigorously pursuing people who are wrongly claiming? I am sure that there are some and we should not let the present situation blind us to the fact that some people might be trying to take advantage of it.

I thank my noble friend. Yes, there are still 58,000 jobs on the website. It is a new website and it is easy to access. For anybody who is still looking for a job—I know that there are jobs and schemes for fruit and vegetable picking this summer for those people who might be furloughed but still want to work—the website is there. We are still encouraging people to go for jobs that can be done safely. As far as fraud is concerned, the capacity in the system at the moment is creating difficulties, particularly for lawyers in the department, because of everything else that they are doing. I will get an answer to my noble friend on what we are doing about that.

My Lords, it took 16 years to get consensus and fully implement pensions auto-enrolment, so I certainly welcome the decision to maintain employers’ auto-enrolment duties, thus avoiding undesirable consequences and the negative impact on younger generations, and the fact that the job retention scheme allows grants to cover employers’ statutory contributions for furloughed workers. However, with 6.3 million furloughed workers, that scheme cannot suddenly cease without triggering widespread redundancies and loss of earnings. Are the Government committed to maintaining adherence to employers’ auto-enrolment duties in the rebuilding of the economy? What discussions is the DWP having with the Treasury on the manner and timing of the phasing down of the job retention scheme, the consequential increase in the number of benefit claimants, and the number of furloughed workers becoming redundant? Finally, I too thank DWP staff.

I thank all noble Lords who have spoken so far who have thanked the staff in the DWP, who have been amazing and are still under huge pressures. The noble Baroness asked a lot of very detailed questions that I will not try to answer at the moment, but I promise her a written response as soon as I get back through to the office tomorrow.

My Lords, I am concerned about online appeal tribunals for PIP appeals that do not allow tribunal members to question claimants directly by speaking to them, as they can in face-to-face tribunals. Could this not be done by phone, as well as online?

I thank the noble Baroness very much. I know that this issue is dear to her heart. However, in line with government guidance, face-to-face hearings obviously had to be stopped. First-tier Tribunals —ones for social security and child support issues—have been replaced with telephone hearings and the use of other remote hearing technologies. As many of those hearings as possible have to be held remotely. All parties in the hearings are being contacted directly to confirm how they can be part of that tribunal. We are also working very closely with our colleagues in HMCTS, who continue to undertake paper-based and telephone hearings. The DWP continues to join these when directed to do so. What is important is that we are working with HMCTS to test video hearings, because that would be a great way forward.

My Lords, I am grateful to the Minister for the Statement and for the short-term loosening of the sanctions regime.

Covid-19 is not a three-month problem. As the UK comes out of the pandemic over the next year—if it does—we will find ourselves with many broken sectors in the economy and millions of unemployed workers. One of the most serious consequences of the pandemic—there will be many—will be the re-emergence of high levels of long-term unemployment, last seen in the 1980s. In view of this grim reality, will the Minister ask her colleagues for a full-scale review of the sanctions regime upon which universal credit is based? Minor adjustments here and there will not make a significant difference: we need active labour market policies. In the 1980s, unemployed young people who were out of work for six months or more were offered work in the public or charity sectors and paid the rate for the job, probably something like the minimum wage. Importantly, they did not lose their capacity to work, their confidence or their mental health. Idleness destroys us all. Yes, it would cost money, but the benefits would outweigh the costs by a very big margin. I ask the Minister for her response to this proposal.

The department is keeping all welfare changes under continual review. Not only that, it is already working on forward planning for when the economy first starts to increase again. As the noble Baroness says, there may be more unemployment. We are therefore working on how we can deal with that and support people back into work, although it may not be the same work. All that work is being done in the department at the moment.

My Lords, I thank the Minister for repeating the Statement. I add my thanks to all those in DWP for the incredible amount of work that they are doing.

I want to return to the two-child limit. I am sorry but it simply will not do to keep parroting back the same answer every time we raise this issue. Today, the Church of England and the Child Poverty Action Group published our latest information and a report on the impact of the limit. It includes evidence from the early days of the Covid crisis. Sixty thousand more families will be impacted. The policy is utterly flawed. I have been assured by Minister after Minister that if we give them the evidence, they will re-examine the limit. It is time that it be re-examined. Please agree at least to look at our report and re-explore the arguments around this issue.

I thought that the right reverend Prelate would speak on this. There are no plans to change the two-child limit, as he knows, but if a new report is out, I will of course make sure that the DWP responds to it.