Credit where it is due: Universal Credit during the coronavirus lockdown

Credit where it is due, and Universal Credit (UC) is due some. In the five weeks after the UK headed into lockdown, there have been more than 1.8 million new claims to UC, the benefit that merges the welfare state’s minimum safety net with the in-work benefits that top up wages. Almost one million of those claims came in the first fortnight.

The website slowed at times. Telephone contact was, initially, a nightmare – on one day alone the Department for Work and Pensions (DWP) received 2.2 million calls. But the website did not fall over. That tsunami of claims is being processed, and, five weeks on, the first pay outs are coming through – with some 93% of those processed in the first week of the lockdown being paid out in full and on time, according to DWP.

That is no mean achievement. It is a percentage far higher than most would have predicted of arguably the least loved of Britain’s benefits, and sits in stark contrast to what would have happened in the old days of the ‘legacy benefits’ UC is replacing: Jobseeker’s Allowance, Income Support and Housing Benefit.

The number of claims in process is impressive, but not all will lead to happy customers

The number of claims is known. But there are not yet figures for how many were successful, nor how many applicants got nil or very small awards. Earnings or redundancy pay received during the assessment period is counted as income, for example, and savings of £16,000 disqualifies people from UC altogether.

In other words, not everyone will have got what they expected, while large numbers of people who have never been near the benefit system before will have discovered just how generous (or ungenerous) it is. It’s also worth noting that, while the omens are good, the 93% figure relates only to the first week of the huge surge in claims, given UC’s standard five-week wait for first payments. The really big week is still to come.

DWP has benefitted from reacting swiftly to the crisis

All that said, credit where it is due. While other parts of the government’s response to the coronavirus pandemic have faltered, DWP rapidly switched 10,000 staff from other tasks to claims processing; annexed 1,000 passport, visa and HMRC staff; set up increasing amounts of home working; and resolved a goodly part of the telephone issue by calling people back if needed, rather than requiring claimants to call. Conditionality – the requirement to look and prepare for work – has been dropped for the time being, and the repayment of old benefit debt has been halted, something the Institute for Government has called for (although not the repayment of the advances that people can take to tide them through the five-week wait for the first payment remains).

Handling the huge surge in claims, however, is just the first part of the challenge. At some point, the passport staff will be needed to issue passports once again, the fraud staff will need to go back to anti-fraud activities, and so on. DWP is recruiting some 5,000 additional staff to ease that transition, and it will be quicker to train them on UC than on the legacy benefits. But the really big longer-term issue is how and when does DWP ever get back to anything like normal?

The government’s exit strategy will pose tough questions on the operation of Universal Credit

The virus is clearly going to have a huge impact on the economy and labour market – what types of jobs will be available and when, and which may be lost forever – and there are big lessons to be remembered from past recessions, most importantly from the 1980s. Back then, as jobs disappeared in coal and steel and manufacturing there were, the Youth Training Scheme aside, no welfare-to-work programmes worth the name. A whole generation of young people, and many hundreds of thousands who lost jobs, had their lives permanently scarred.

As far as possible, that should not happen again. UC should help ensure this. But there are many difficult decisions facing the government as it plots the UK’s ‘exit strategy’ out of lockdown, with some form of social distancing measures likely to be with us for a long time.

Just how, and when, and where, and at what scale can UC work coaches once again engage with claimants to help and cajole them back into work? How far will it be safe to open Jobcentres? What expectations of job search and other activities can reasonably be expected of claimants – indeed what types of jobs will they be expected to look for, given the hammer blow to certain parts of the economy, notably hospitality and retail, that the coronavirus is delivering? How far can the welfare-to-work element of DWP’s role be successfully done online?

Having made what looks like a fine start in its response to coronavirus, DWP’s biggest challenge may yet be to come.