Universal Credit roll-out: Autumn/Winter 2017

Universal Credit (UC) is a new benefit which is replacing means-tested social security benefits and tax credits for people of working age. The aim is to simplify and streamline the benefits system, improve work incentives, tackle poverty among low income families, and reduce the scope for error and fraud. Around 7 million individuals and families are expected to receive UC when it is fully introduced.

The UC roll-out timetable has been pushed back several times. Following early problems, the entire programme was “reset” in early 2013. In 2016, DWP began rolling out the “Full Service” – the final digital version of UC, available for all claimant groups – using a “test and learn” approach. From October 2017, roll-out of the Full Service is accelerating and under the latest plans it is expected to be operational in all parts of the United Kingdom by September 2018. The remaining benefit and tax credit claimants would then transfer to UC between July 2019 and March 2022.

In February 2017, the former Work and Pensions Committee began an inquiry (relaunched by its successor Committee following the General Election) following receipt of “compelling evidence” of problems with the roll-out of the Universal Credit Full Service. Issues highlighted by local authorities, housing providers, charities and pressure groups include claimants experiencing hardship and falling into debt as a result of the minimum 6 week wait before the first payment of UC, and significant increases in rent arrears.

Concerns about the impact of the Full Service have led to calls on the Government to pause the further roll-out of UC to allow problems to be addressed. On 18 September, the Work and Pensions Committee Chair, Frank Field, called on the Government to heed the “unanimous call we are hearing from front line providers” to pause the Full Service roll-out, to prevent a “human and political catastrophe.”

Speaking on 2 October 2017, the Secretary of State for Work and Pensions insisted that UC was working and said that roll-out would proceed according to the planned timetable. Guidance for DWP staff has been “refreshed” to ensure that “anyone who needs an advance payment will be offered it up-front.” On 18 October the Secretary of State also announced that the UC helpline would change to a Freephone number over the next month, as will all other DWP phone lines by the end of the year.

Ministers also point to statistics showing that showing that 89% of people making new UC claims receive some payment, and 81% receive their full payment, “on time” (i.e. within 6 weeks, or 5 weeks if they do not have to serve “waiting days” at the beginning of their claim). However, these statistics only the cover the period once a claimant has registered their account, submitted details of their circumstances, accepted their responsibilities and made a formal declaration. Statistics are not available on how long claimants take to complete these preceding stages, and on how many accounts are deleted as a result of failures to complete the necessary steps in time.

Following an Opposition Day debate on 18 October, the House of Commons agreed by 299 votes to nil an Opposition motion calling on the Government to “pause” the roll-out of the UC Full Service. All Conservative Members – with the exception of Dr Sarah Wollaston – abstained. In a subsequent emergency debate on 24 October, the Shadow Secretary of State for Work and Pensions, Debbie Abrahams, criticised the Government for failing to issue a statement on what it intended to do in response to the concerns voiced in the Opposition Day debate. She called on the Government to end the 6 week wait for new UC claimants, make alternative payment arrangements available to all, reconsider Jobcentre closures and abolish the two-child limit. The Minister for Employment, Damian Hinds, said that while the Government would “continue an active dialogue” with MPs across the House to listen to concerns and identify where improvements might be made, it would not pause the roll-out of UC in light of the clear evidence of its benefits.

On 26 October the Work and Pensions Committee published a report on the “baked-in” 6 week wait for UC, which it described as a “major obstacle to the success of the policy.” It noted compelling evidence linking it to an increase in acute financial difficulty, adding that most low-income families do not have the savings to see them through the period. While welcoming the increased availability of advance payments, the Committee did not believe these were a solution to a fundamental flaw in the benefit’s design. The Committee recommends that the Government reduce the standard waiting time for a first UC payment to one month.

In further correspondence, the Committee’s Chair, Frank Field, has called on DWP to publish the revised business case for UC, and updated estimates of the employment impact of the benefit. He also describes the lack of data being collected and published on various aspects of UC as “troubling, to put it mildly.”

In advance of the Autumn Budget on 22 November, there have been other calls on the Government to “review and relaunch” the UC system. A report published by the Resolution Foundation on 31 October recommends that, among other things, the Government speed up initial payments of UC, including payment of housing support, allow recipients to opt for fortnightly payments, allow tenants to choose direct payment of the housing element to landlords, and accelerate implementation of the landlord portal. It also recommends boosting work allowances for single parents and introducing an initial work allowance for second earners, and trialling different forms of financial incentive to encourage progression in work such as lower tapers for second earners and single parents, time-limited conditional payments for achieving progression, and additional support with childcare costs for pre-school children.

In a report published on 6 November, the Child Poverty Action Group warns that cuts to Universal Credit could put an additional 1 million children in poverty. CPAG argues that if the Chancellor wants to restore Universal Credit’s promise of greater rewards from work and lower poverty, he should reverse cuts to the work allowances and announce a “triple lock” for Child Benefit an the child element of UC.

Key statistics

In August 2017:

• Around 590 thousand people were on UC
• This is around 8% of the final caseload forecast by DWP
• 101 jobcentres (14%) operated the Full Service
• Around 227 thousand people claimed UC via the Full Service

As roll-out continues this winter:

• 134 more jobcentres will launch the Full Service by the end of the year
• The UC caseload might rise by around 370 thousand by April 2018, a 63% increase
• At least 90 thousand more people might claim via the Full Service by Jan 2018
• On average 63 thousand people a month might start a new UC claim till Jan 2018
• Of these 63 thousand new starts, around 40 thousand (64%) might wait at least six weeks for their first payment