19 September 2017

Universal Credit is in danger of going down in flames because of a decision that is not absolutely intrinsic to its design, argues Nicholas Timmins.

Universal Credit is essentially a good - if highly ambitious - idea that has proved vastly harder to implement than its proponents ever imagined.

It has been hit by problem after problem since its launch by Iain Duncan Smith in the very early days of the Coalition.

Universal Credit rolls six benefits into one in an attempt to simplify an over-complicated benefit system. The original aim was to ease the transition in and out of work and back again while ensuring, transparently, that it always paid to be in a job.

It is an honourable ambition.

On the original timetable, all eight million in and out of work households in the UK – most of them in work - that currently receive working tax credits, child tax credits, housing benefits, income support, means-tested versions of the jobseeker’s allowance and employment and support allowance were meant to be on the new ‘universal’ benefit by October 2017 i.e. next month.

As of June this year, just 540,000 claimants were receiving it and the implementation timetable now stretches to 2022.

The unintended and unfortunate consequences

Under the old system, the goal was to pay benefits within two weeks of a claim. Under Universal Credit, there is a formal waiting period of one week with no money, with the benefit then being paid monthly in arrears – the intention being that this more closely mirrors what it is like to be in a job. In practice, many of those earning less than £10,000 a year are in fact paid weekly.

The effect of this 'discipline' in practice has led to an in-built wait of six weeks before people get their cash - three times as long as the old system – and the Department for Work and Pensions admits that in around a fifth of cases it is failing to meet even that target, partly because of the information demands it places on the claimants.

Waits of ten or twelve weeks are not uncommon.

The overall effect has been to plunge people already on low incomes into rent arrears and debt and in some cases homelessness. In others cases, it has caused job losses - the very opposite of what Universal Credit is intended to achieve.

The Commons Work and Pensions Committee has been hearing in detail evidence about these effects and bodies as diverse as Citizens Advice and the councils in areas where Universal Credit has been rolled out so far have been telling the Government about this for many, many months.

Compounding the problems

Despite these problems, the next big roll out of Universal Credit is set to go ahead, and what are already major problems look set to be compounded, as The Times among others have recently highlighted.

Apart from the ideological step of making the benefits mirror a monthly salaried job – when growing numbers at the lower end of the labour market are on ‘zero hours’ contracts or other forms of the ‘gig economy' – the six week wait was incorporated, to put it crudely, to save money.

It is just one of the many cuts to the level of support offered by Universal Credit that have been introduced since its inception, to the point where even some of its proponents fear it has become too mean to work for those it sought to help.

Universal Credit would still be Universal Credit without the six week wait. Imposing it was a policy choice, not a necessity, and a choice that can be undone. The answer has to be a shorter wait and not just the loans that claimants can theoretically claim, but which many don’t know about which in any case just bring new problems.

If the Government does not act before the further roll out of Universal Credit to hundreds more offices, it will cause immense hardship and bring the Universal Credit approach into further disrepute.

Further information

Read Nick Timmins' full report - Universal Credit: From disaster to recovery? (Sept 2016)

Comments

On the monthly benefits vs weekly or fortnightly, there are further reasons to pause. In particularly, there is some evidence that monthly benefits payments can contribute to higher crime rates - in U.S. cities with monthly payments, there are slight upticks in property crime at the end of the month in contrast to states where payment is weekly or bi-weekly according to this study: http://www.nber.org/papers/w14074 While the relationship between crime and poverty isn't as close as people think it does seem that there might be something in the idea that those who are poor and struggle to plan financially do sometimes resort to crime (or more crime) as a result of temporary financial hardship.

I've always thought UC was one of those, 'it might work in theory, but does it work in practice' cases. If you looked at similar projects in terms of scale, complexity etc. the initial timelines and budgets were entirely unrealistic. Let's see if it still proves effective over the long term, but I struggle to see it at the moment...

The problems with Universal Credit are much more fundamental than this suggests. I wrote in 2012: "the design of Universal Credit has already compromised its main objectives. It will be compartmentalised rather than unified, segmented rather than individual. It is not going to deliver a simplified benefit system, it cannot respond directly and immediately to the circumstances of households, and it is not going to offer sensitive, responsive, personalised support. Ultimately, Universal Credit will fail because it is trying to deliver the impossible."

All the primary objectives – such as simplification, work incentives, reducing in-work poverty, smoothing transitions and cutting back on fraud and error – have been fatally compromised. None of the innovative methods envisaged - real-time processing, smooth tapers, digital by default - was achievable. There is no effective system for coordinating and pooling all the information required in one place – the new system has come to rely primarily on returns from claimants about changes. The system relies on accurate information from claimants, and people cannot answer questions they do not know the answer to. The marginal rate of deduction is much higher than intended. The cuts in work allowances have removed any incentive for most claimants to remain in contact with the system if they find work. The system makes complex demands of claimants (for example, those relating to security, agreements by couples or job search) which are almost impossible to police.

You may have been told that the DWP and the Treasury have finally got a grip and sorted out the basic mistakes. It's not true, and that's why charities are now lining up to ask for the rollout to be halted. None of this could be recovered, because of the system's central design flaws. I've written before that UC "brings together every major feature that has caused administrative meltdown in the course of the last forty years: personalisation, tapers, computerisation, conditionality and multiple moving parts. " This was never "essentially" a good idea.

I live in Southwark, since the time I was pushed in to Universal Credit 3 years ago, I have been in rent arrears, cannot look after my children like before. There was a time when they told me to go to food bank. I am still suffering with my three kids alone .

I'm on DLA and been told to claim Universal Credit so I sat in done my homework and by the time my bills etc are payed I will be worse off by £200 pound a month.

After being forced into UC and putting me £2000 in debt because of none rent and council tax payments lack of communication between the departments. I find it absolutely pathetic no one communicates with each other I am a single parent and have been under continuous battles with UC, a year gone bye and still not resolved. Thanks UC for the wonderful job. Idiots

I also have suffered nothing but hardship and constant struggles and fights due to UC incompetence. I also failed to get my housing element payed for over 6 month and now have substantial rent arrears, although UC admitted it was their mistake they still request I pay the arrears etc. I am now fighting a repossession order to keep mine and my 3 kids home! The whole thing is a ridiculous joke, this is people's lives they are destroying.

Well, I am a qualified professional - worked in the health-care sector a deputy manager, a single parent of one child. I lost my job in June 2017 - my DBS came out with my names swapped. The person who needed to verify the information on the paper-based application did not do so.
Being out of work I decided to apply for a JSA and housing benefits while the new DBS is being processed. I was forced to wait for a couple of days and apply for the UK instead. Did that.
I went to interviews with my advisor, went to interviews, got 3 job offers. Just waited for the DBS.
Had to pass an HRT test. Failed it as I was considered unemployed at the time of the application. Yes, I was unemployed as the names on my DBS were swapped.
Called the DBS over 4 times and the UC help-line - over 30 times.
My tax credits and work credits were stopped -as I applied for an UC.

A long summer with an active child, no incomes.
Facing eviction.... The Jobcentre plus consultant sends you to a food bank. Where would I cook food once evicted from our house.
My new DBS came out at the end of August 2017. I started job immediately and fell between 2 payment cycles, but I will be getting a salary.
I had to pick a job that is the closest to my own home and within a walkable distance.
I need to put my child in an after- school club - to be able to do the shifts and deserve the long-waited salary. I have not paid the after-school club yet.
I am in arrears with utilities, one rent and council tax.

I think that the UC - the way it works is a breach of children's rights.
It puts children at a risk of neglect by their own parents and in their own families.
It forces the parents to show the children that being in arrears, entering payment agreements, facing eviction is a way of living..... in a country like the UK when anybody why works in helping jobs needs a clear DBS to shake hand with a child.
The UC makes public servants in the job centre plus being illogical and giving the claimants mechanical and irrelevant answers that they themselves would have hated.

You speak of an enlightened attempt to simplify benefits. This is rot. It is the disguise you speak of. Universal Credit is about cutting the benefits bill by hook or by crook.

You fail to speak of the far more stringent conditions unnecessarily and arbitrarily attached which make it far easier for DWP staff to kick people off benefits and into penury, if they weren't there already. DWP staff clearly have arbitrary targets of c6% of claimants to be sanctioned, and clearly some staff resort to desperately pathetic reasons, set-ups and catch 22s to enable them to make their targets, otherwise they are in trouble.

Universal Credit forces the unemployed to make ridiculous efforts to look for work when few or even none-such jobs may exist at particular times (holiday times such as August and Christmas are generally times with far fewer jobs available) as Claimant Commitments have no regard for this. They also do not have any quality criteria, so claimants will often resort to applying for jobs they have no reasonable prospect of getting , wasting their own resources because of the fear of losing all their benefits, in order to say they job searched for 35 hours.

This has however had the knock-on effect of existing job vacancies becoming massively over-subscribed, and employers have responded by making job descriptions more exclusive and harder to apply for, unless you meet far more exacting criteria. The most common of such is previous experience in a similar role being not just preferred, but essential. This can exclude people who might apply due to having e.g. transferable skills, but who will now be weeded out during the initial sorting process, for not complying with the criteria given for the role.

This recent emphasis on the delay problems with Universal Credit, which is bad enough, is effectively covering up all the other issues with Universal Credit that can cause far greater hardship for those on the sharp end than delay.

It strikes me as a co-ordinated effort by the DWP and other Government supporters, to admit to one or two issues, which can be addressed (with a triumphant press release in due course), whilst other more serious issues are swept under the carpet, to be forgotten.

I look forward to reading full report. Just heard Tory MPs trying to justify the sheer misery they are causing.

Out of £284 of my personal element of UC which is to cover 'most very basic needs' as described by CAB, I pay £147 towards rent, rent arrears (accrued during a 12-week wait for UC to sort out my rent), water rates and I pay £30 for a data pack that allows me to do 37.5 hours job searching a week and has to last the month. If I fail to submit daily job applications online I am sanctioned £10.80 a day for 28 days. So approx £280. My personal element is £284 a month. So whilst data may seem a luxury, it's a necessity to comply to my commitment. After paying out £147 I'm left with what equates to £4.91 a day BEFORE i cover food, gas, electric and I've still not been told what I will have to pay towards council tax yet so that will have to be covered by the £4.91 as well. I'm a week away from my next payment, I have half a loaf of bread , gas and electric for maybe another two days.

I don't need a benefit with a new process to replicate what working for an employer is like. I have been monthly paid for years. I don't need a benefit to show me how to be responsible for paying my own rent, I've been doing that for years. I don't need a benefit that prides itself on making me pay my own way and then the money I do earn I have to pay to cover arrears caused by the system that's supposed to help me which leaves me with nothing again only this time I'm considered as employed and not eligible for help.

Universal Credit was based upon flawed, biased and sweeping generalisations and lack of evidence to justify it's current status.

It all began as an idea from the Centre for Social Justice, Ian Duncan Smith's think tank to tackle some of the deep rooted social issues in the UK.

Whilst out of office and floating around on the backbenches, with his new play thing up and running thanks to his friend Phillipa Stroud, an evangelical Chrsitian whose previous work with vulnerable women was alleged to have involved Exorcism to drive out alleged evil spirits. Steroid and her husband were part of the New Frontiers evangelical church movement which hd it's beginnings on the south coast of England.

I became a born again Christian in 2009, following getting married earlier in the year, New Frontiers had a local church in the Lake District,so went to try it out, it was friendly, lively and distinct.
Being naive about churches and their politics, I went to a conference in the North East near Middlesbrough later in 2009, the first evening, one Phillipa Stroud appeared on stage with her husband to announce she was standing for the Tories as PPC in Sutton and Cheam and she and IDS would be leading the fight against poverty in the UK as part of the CSJ and the Tory party.
2 days later, Surround held a seminar on poverty and social exclusion, it was a 1 hour party political broadcast, part of the seminar were of IDS sobbing his poor little iron heart out in Easterhouse near Glasgow.

The seminar was notorious for Stroud dressed up in Barbour jacket, neckerchief and very expensive wellies, looking like she'd been out 'shooting' wildlife on her estate, except the tone of the entire seminar was how Labour failed communities like Easterhouse and allowing a culture of benefit dependency to take hold.
Stroud's final rally was work and moving people off disability benefits would transform lives and reduce the deprivation through a new rigourous benefit system designed to incentivise work over benefits. All very well meaning, but a lot of what Stroud was saying was obvious to win votes for IDS and to portray the Tory party in a new light.
Universal Credit has basic flaws, namely there is a bountiful supply of reasonablely well paid employment available to claimants, who if only they showed an ounce of effort they would escape poverty for good. However most employment for the majority of claimants is low paid, zero hours,insecure and without any career path. Secondly with a stick from the state there would be an exodus off benefits and into employment, except most claimants want to work, get on in life and have no desire to sit in a JCP office being patronised by an over officous Civil servant or sent on some useless 'back to work training', many claimants report being stuck in empty rooms with nothing to do but talk amongst themselves or put on Pauline from the League of Gentleman style back to work courses which often agreed and demoralised skilled men and women who had raised families, had skilled jobs but had the misfortune to be made redundant, fall sick or have to give up work due to caring responsibilities or disability.

Another major design flaw with UC, was the distinct lack of input from claimants themselves or the ability or humility to admit mistakes and learn from them.
UC is a wonderful sounding concept on paper, in reality its been a catastrophe, one that could and should have easily avoidable except for political arrogance and ego.
The problem that seemingly most politicans suffer from is the inability to listen and to allow those affected by policy to be involved in it's design and implemenation.

Without that simple concept, no amount of money, housing, leisure centre, infrastructure poverty will not be erradicated. That has been the feedback from Easterhouse.

I'm afraid that Universal Credit unless paused, claimants involved in further growth or implementation and the scrapping of waiting times for first payment will be another expensive policy set to the scrap heap of useless policies and the egos of their creators.

It confuses the life out of me that my student loan is deducted , pound for pound, out of my UC payments, when it is in fact, a loan! In effect, does this not mean I'll be repaying my loan twice? Not to mention being sanctioned for two months for missing an appointment whilst on placement! I called the next day to apologise and rearrange yet the 'decision maker' considered this an invalid reason. As a student and single mum, I feel UC has failed me many times. Not to mention EVERY time I ring/attend an appointment, I have to spend 30 minutes while the person I'm dealing with gives me an attitude and tells me I shouldn't even be claiming UC and runs round every other member of staff around them looking for answers as to how to "deal" with me. I'm lucky, I have a family who can emotionally support me when I'm under the stress UC can trigger but for those with poor support systems and circumstances, the experience of dealing with UC must be horrible.

All these changes that are meant to be happening are for new claiments only, what about all the existing claims. We work part time and have universal credit paid every month. It is paid towards the end of the month and our rent is due on the 5th monthly. We try to put money aside out of our very low wages but it I never enough, We earn around £140 a week and put together. We will always be in arrears with rent, council tax won't reply to my emails and when they do I don't understand their lingo. Should we even be paying council tax?

.....and the self employed will be hit too. Minimum income floor will mean it is better to be unemployed.

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